Full year results for the year ended 31 December 2010

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15 Mar 2011

Gem Diamonds (LSE: GEMD) a leading diamond mining company reports its full year results for the year ended 31 December 2010:

FINANCIAL HIGHLIGHTS

  • Revenue US$266.4 million.
  • EBITDA US$82.0 million, up 47% from 2009.
  • Profit before tax from continuing operations US$54.5million, up 39% from 2009.
  • Profit for the year of US$36.2 million, up 43% from 2009.
  • Attributable profit US$20.2 million (15 US cents per share).
  • Year end cash on hand of US$129.8 million.

OPERATIONAL HIGHLIGHTS:

  • Strong recovery in prices for rough diamonds in last quarter 2010.
  • More than 500 rough diamonds greater than 10.8 carats in size recovered in 2010 at Letšeng.
  • Three remarkable diamonds (196ct, 184ct and 116ct) recovered at Letšeng in the year.
  • 25% price increase for Ellendale's fancy yellow diamonds sold to Tiffany & Co.

CORPORATE HIGHLIGHTS:

  • Mining licence awarded for the Gope deposit in Botswana, and plans are underway for construction of a mine at Gope.
  • Growth plan underway for overall value increase at Letšeng.
  • Letšeng gained control of own sales and marketing, with strategies in place to develop its downstream activities and capabilities.

HSSE HIGHLIGHTS:

  • Lost time injury free over 14 months, in excess of 5 million man hours worked at year end.
  • Fatality-free for 2 years and 9 months at year end.
  • Both Letšeng and Ellendale mines retained their 4 star ratings in external HSSE audits, with both recording zero major and/or significant environmental incidents in the year.
CLIFFORD ELPHICK, CEO, COMMENTED:

"2011 has begun on an extremely positive note. Not only have rough diamond prices continued to increase as a result of perceived supply shortages, but polished prices have too, and volumes of trading are pleasing. Management has been concentrating on delivery of growth and control of costs. Much effort has been expended on these aspects of the Company's activities and it is pleasing to report to shareholders the fruits of these labours. The Company is very well placed with a pipeline of opportunities and a balance sheet to fund them."

The Company will be hosting an analyst presentation on its Full Year Results today, which will take place at 9.30am. A live webcast of the presentation will be available on the Company's website: www.gemdiamonds.com.

For further information:
Gem Diamonds Limited

Clifford Elphick, Chief Executive Officer
Glenn Turner, Chief Commercial and Legal Officer
Tel: +44 (0) 203 043 0280

Richard Chetwode, Investor Relations
Tel: +44 (0) 203 043 0280
Mob: +44 (0) 759 0064 883

Gem Diamond Technical Services (Pty) Ltd

Sherryn Tedder, Media
Tel: +27 (0) 11 560 9618
Mob: +27 (0) 83 943 4505

Pelham Bell Pottinger

James MacFarlane
Tel: +44 (0) 207 861 3864

Charles Vivian
Tel: +44 (0) 207 861 3864

About Gem Diamonds:

Gem Diamonds is a global diamond mining company that is pursuing a long term growth strategy through the development of its existing assets and targeted acquisitions. Under the depressed market conditions of late 2008 and early 2009, the Company focused its strategy on developing its cash generating assets and curtailing all non-essential capital and development expenditure. Following the steady improvement in the diamond market during 2010, the Company has now developed a growth strategy designed to take advantage of these improving conditions.

The Company's portfolio comprises producing kimberlite and lamproite mines in Lesotho and Australia, as well as operations, development projects and exploration assets in Angola, Botswana and Indonesia.

With Letšeng's production of the world's most remarkable white diamonds and Ellendale's production of rare fancy yellow diamonds, Gem Diamonds remains focused on higher value diamonds. This segment of the market is expected to deliver attractive long term returns.

15 Mar 2011 Full year results for the year ended 31 December 2010 (234KB PDF)