GEM DIAMOND MINING COMPANY OF AFRICA LTD COMPLETES THE PURCHASE OF 76% OF LETŠENG DIAMONDS (PTY) LTD, THE OPERATOR OF THE LETŠENG DIAMOND MINE IN LESOTHOBack
29 Sep 2006
Gem Diamond Mining Company of Africa Ltd (Gem Diamonds) is pleased to announce that it has today received final shareholder approval from JCI Ltd and Matodzi Resources Ltd for the acquisition of a 76% stake in Letšeng Diamonds (Pty) Ltd the operator of the Letšeng Diamond Mine in Lesotho (Letšeng). Gem Diamonds now owns 76% of Letšeng and the Government of the Kingdom of Lesotho owns the remaining 24%.
In terms of an agreement reached on the future operating regime for Letšeng, the government will receive an additional 6% equity, which will result in Gem Diamonds holding a total of 70% equity in Letšeng and the Government of Lesotho the remaining 30%.
Letšeng is a well known mine in the Maluti Mountains of Lesotho, famous for the quality of its diamonds. Since commencing operations in April 2004, it has achieved an excellent production track record, with 90% of diamonds recovered being of gem quality and a significant number graded as D, the top colour for a white diamond. Its revenue per carat is currently unsurpassed in kimberlite diamond mining.
Commenting, Clifford Elphick, CEO of Gem Diamonds, said:
"We are delighted to have completed this transaction. Gem Diamonds is delighted to be the Government of Lesotho's partner in this venture. We believe that Letšeng has a great future and are now planning to more than double the mine's capacity to 5.2 million tonnes per annum. Letšeng is an impressive producing asset and forms a strong platform from which we will continue to build Gem into a leading diamond mining company."
For further information:
Gem Diamond Mining Company of Africa Ltd.
Clifford Elphick, CEO
Kevin Burford, CFO
Tel: +27 11 325 7652
Biographies and photographs are available on request.