HALF YEAR 2015 RESULTS

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19 Aug 2015

Strong operational performance and project delivery drives solid Half Year 2015 results

Gem Diamonds Limited (LSE: GEMD) (“Gem Diamonds”, the “Company” or the “Group”) today announces its half year results for the six months ending 30 June 2015 (“H1 2015” or “the Period”).

FINANCIAL RESULTS:

Solid financial performance despite challenging market conditions
  • Revenue of US$ 118.0 million (US$ 148.9 million in H1 2014)
  • Underlying EBITDA of US$ 46.1 million (US$ 63.5 million in H1 2014)
  • Attributable profit of US$ 15.4 million (US$ 19.7 million in H1 2014)
  • Basic EPS of 10.69 US cents (15.30 US cents in H1 2014)
  • Cash on hand of US$ 83.8 million as at 30 June 2015 (US$ 70.5 million attributable to Gem Diamonds)
  • A maiden dividend of 5 US cents per share (US$ 6.9 million) paid on 9 June 2015

OPERATIONAL RESULTS:

Letšeng:
Strong operational performance with projects delivered on time and budget; robust prices achieved in a difficult market
  • Carats recovered of 50 019 (54 678 in H1 2014)
  • Average value of US$ 2 264* per carat achieved (US$2 747* in H1 2014)
  • Five diamonds greater than 100 carats recovered
  • 13 diamonds achieved a total sales value of greater than US$ 1 million each
  • Ore treated of 3.1 million tonnes (3.2 million in H1 2014)
  • Waste tonnes mined of 11.4 million tonnes (10.0 million tonnes in H1 2014)
  • Zero lost time injuries

*Includes carats extracted for polishing at rough valuation.

Ghaghoo:
Recovered grade trending upward; recovery of some larger diamonds
  • Carats recovered of 35 283
  • Ore treated of 132 125 tonnes
  • Average grade achieved between 28 and 30 cpht for May and June
  • Five development tunnels completed
  • Slot tunnel completed between Tunnels 1 and 5 allowing retreat stoping to commence
  • Sale of 10 096 carats in January 2015, achieved US$210 per carat
  • 13 diamonds of greater than 10 carats each recovered, with the largest being 48 carats
  • Zero lost time injuries
Commenting on the results today, Clifford Elphick, Chief Executive of Gem Diamonds, said:

“Letšeng continues to consistently produce the large, exceptional quality diamonds. Prices for these goods have remained firm, despite the current challenging conditions in the diamond market.

The Company continues to demonstrate capital discipline and, at Letšeng, we have successfully completed the low capex incremental growth projects on time and on budget. The previously announced optimised Life of Mine plan for Letšeng has significantly increased the NPV of the mine by allowing optimal access to the high value Satellite pipe material and smoothing out the waste mining profile. Letšeng remains on track to meet its targets for the year.

At Ghaghoo, the mine development and ramp up to full planned production rates continues to progress, despite challenges in localised ground conditions. The first parcel of Ghaghoo commissioning diamonds was sold in February 2015 for US$ 2.1 million, achieving US$ 210 per carat. In July, a second parcel was sold for US$ 4.9 million (US$ 165 per carat), a lower price given the current market conditions. Encouragingly, as production begins to ramp up, a number of larger white diamonds and small coloured diamonds were recovered during the Period.

In June, the Company paid its maiden dividend of 5 US cents per share (US$ 6.9 million)”.

The Company will be hosting an audio presentation on its half year results today, 19 August 2015, at 9:30 am BST. 

A live audio webcast of this presentation will be available on the Company’s website: www.gemdiamonds.com

FOR FURTHER INFORMATION:
Gem Diamonds Limited

Sherryn Tedder, Investor Relations
Tel: +44 203 043 0280
Mob: +44 7778 246 321

Bell Pottinger

Daniel Thole/ Joanna Boon
Tel: +44 (0) 203 772 2500

ABOUT GEM DIAMONDS:

Gem Diamonds is a leading global diamond producer of high value diamonds. The company owns 70% of the Letšeng mine in Lesotho and 100% of the Ghaghoo mine in Botswana. The Letšeng mine is famous for the production of large, top colour, exceptional white diamonds, making it the highest dollar per carat kimberlite diamond mine in the world. Since Gem Diamonds’ acquisition of Letšeng in 2006, the mine has produced four of the twenty largest white gem quality diamonds ever recorded.

Gem Diamonds has a growth strategy based on the expansion of the Letšeng mine and bringing the Ghaghoo mine into production, while maintaining its strong balance sheet. The Company seeks to maximise revenue and margin from its rough diamond production by pursuing cutting, polishing and sales and marketing initiatives further along the diamond value chain. With favourable supply/demand dynamics expected to benefit the industry over the medium to long term, particularly at the high end of the market supplied by Gem Diamonds, this strategy positions the Company well to generate attractive returns for shareholders in the coming years.

www.gemdiamonds.com

19 Aug 2015 Half Year 2015 Results (664KB PDF)