Interim Management Statement

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24 Apr 2013

Gem Diamonds Limited (LSE: GEMD) reports an Interim Management Statement (“IMS”) for the Period 1 January to 23 April 2012 (“the Period”).

During the Period:

Letšeng:
  • Preparatory work to install four secondary crushers in both Plants 1 and 2 to reduce diamond breakage is complete. Installation will occur by the end of Q2 2013.
  • An average value of US$1 599 per carat was achieved for the first 3 tenders of 2013
  • 6 rough diamonds achieved a value in excess of US$1 million each.
  • 24 rough diamonds achieved prices greater than US$20 000 per carat
  • A total of 158 rough diamonds greater than 10.8 carats in size were recovered.
Ghaghoo:
  • Development of the access decline entered weathered basalt country rock during the Period.
  • Construction of the Plant is 90% complete. No further work will be undertaken until commissioning commences in Q2 2014 to coincide with the ore becoming available.
Group:
  • 1 Lost Time Injury (LTI) occurred in the Group for the year to date.
  • Zero major stakeholder and environmental incidents have occurred year to date.
Cash:
  • The Group has US$56.0 million cash as at 31 March 2013, of which US$52.8 million is attributable to Gem Diamonds.
  • To date no draw-downs have been made on either of the US$20 million or Maloti 250 million (US$27 million) facilities.
Gem Diamonds’ CEO, Clifford Elphick commented:

“As anticipated, this quarter was in line with our reduced expectations for grade and quality. Throughput was relatively low, albeit planned. Rough diamond prices have improved over the quarter, but this is not reflected in our results because of the lower quality diamonds mined so far this year. As communicated previously, mining at Letšeng this year has been restricted to the lower grade and lower value section of the Main pipe. Mining will return to the higher value satellite pipe at the end of Q2 this year. It is anticipated that this will result in improved revenues for the remainder of 2013.

Work at the Ghaghoo project has progressed to the point where the country rock has been reached which will allow for better rates of progress using conventional drill and blast methods.”

24 Apr 2013 Interim Management Statement (299KB PDF)