Strategic focus

Our strategy is based on three broad pillars:

Growth, value creation and sustainability

Gem Diamonds’ strategy is based on three broad pillars, namely growth, value creation and sustainability. We believe this offers us the flexibility to generate maximum returns for our shareholders in a sustainable manner. Our business model is focused primarily on extracting diamonds through mining. We have also expanded this further along the diamond value chain through our strategic sales, marketing and manufacturing activities.

Our overarching objective is to deliver sustainable returns for our investors while optimising the benefit for our communities and minimising our impact on the environment.

Strategic focus

Gem Diamonds is primarily focused on extracting diamonds through mining.

To complement this, we continue our attention further along the diamond value chain through our sales, marketing and manufacturing activities.

Our strategy is based on three key priorities – growth, value creation and sustainability. Our overarching objective is to deliver sustainable returns for our investors while optimising the benefit for our communities and minimising our impact on the environment.


Growth

Organic growth

Optimising the Letšeng mine and recommencing production at the Ghaghoo mine when market conditions allow, using available capital to deliver increased returns to shareholders.

External growth

Assessing external opportunities against strict investment criteria.

Value accretive opportunities

Generating additional value through sales and marketing capabilities, incorporating manufacturing and downstream initiatives.

Value creation

Operational excellence

Focusing on cost reductions and enhancing current production efficiency.

Optimising returns

Improving the quality of our assets through life of mine extensions.

Strengthening the capital structure.

Optimising revenue achieved for diamond production through reductions in diamond damage and theft.

Sustainability

Stakeholders and communities

Building long term, transparent and mutually beneficial relationships with all stakeholder groups.

Health, safety and environment

Promoting a culture of zero harm and responsible care as our workforce is our most valued asset.

Delivering sustainable returns for our investors while optimising the benefit for our communities and minimising our impact on the environment.

Identifying Resource

Identifying, evaluating and developing diamond deposits that are potentially valuable

Planning and developing Reserves

Identifying the valuable, economical and technically feasible part of the resource to be mined

Mining

Mining in both open-pit and underground mines efficiently as possible and minimising the impact on our employees, environment and project affected communities.

Processing

Increasing recoveries and improve finished product quality through initiatives of reducing diamond damage and theft and increasing liberation of diamonds

Sales, marketing and manufacturing

Analysing and mapping exceptional diamonds to understand and achieve highest rough value through multiple selling channels.

Manufacturing of select high-value rough diamonds, unlocking additional value through polished sales

Market risks

Operational risks

Financial risks

  1. Enhancing customer satisfaction
  2. Maximising shareholder returns
  3. Increasing local economy contribution
  4. Enhancing employee development and engagement
  5. Minimising environmental impact
  6. Developing innovative mining solutions

Investment proposition

Gem Diamonds, through its unique Letšeng mine, produces the highest average US$ per carat diamonds in the world, sought after by high-end diamantaires. This competitive advantage, combined with growth, value creation and sustainability makes the Group an attractive investment proposition. Read more on Gem Diamonds Strategy.

What we offer

In 2011, Gem Diamonds mapped out a clear strategy built on three pillars, namely value creation, growth and sustainability. This broad-based approach has allowed the Group to adapt to short-term opportunities and challenges while moving towards its long-term goal of sustainable shareholder returns. The Group continues to make great strides in achieving its stated objectives:

The Letšeng mine in Lesotho is synonymous with exceptional diamonds. It is, therefore, imperative that the Group continually invests in innovative ways of identifying, recovering and preserving these high-value diamonds, specifically projects representing relatively low capital investments in order to improve diamond recovery, diamond liberation, diamond security and reduction in diamond damage are the key focus areas at Letšeng

We are committed to sustaining shareholder value through the implementation of appropriate dividend policies. The Board has adopted a policy that will determine the appropriate dividend each year based on consideration of the Company’s cash resources, the level of free cash flow and earnings generated during the year as well as the expected funding commitments for capital projects relating to our growth strategy. Dividends are expected to be declared by the Board annually with the full-year results. This policy demonstrates our commitment to returning value to shareholders.

We are focused on maximising revenue from our core Letšeng asset, through enhancing operational efficiencies and investing in low capital, short payback projects. Cash generation and capital discipline have positioned us well for sustainable growth into the long term.

The Ghaghoo mine was placed on care and maintenance in February 2017 in line with current market conditions for these types of diamonds and demonstrates our commitment to cash preservation. The 20.5 million carats contained within the Ghaghoo resource offers to enhance the Gem Diamonds investment proposition as and when the market improves.

Safeguarding the well-being of employees is both a moral and business imperative. The Group is committed to eliminating fatalities at work and reducing incidences of injury in line with our all-encompassing goal of achieving zero harm.

Gem Diamonds is deeply aware of its responsibility towards the areas in which it operates, both in terms of environmental stewardship and socio-economic development. The Group recognises that its long-term viability is closely linked to the success and well-being of the communities in which it operates and strives to contribute positively to these communities. A comprehensive sustainable development programme is in place at each operation, supported in terms of strategic guidance by the HSSE Committee, at Board level.


Outlook

The medium to long-term outlook for the diamond demand/supply fundamentals are expected to remain favourable given the expected rising consumer demand in developed and developing markets contrasted with declining supply forecast in the medium to long term.

The strategic focus will remain on creating value by focusing on mining and selling diamonds efficiently and responsibly. Nevertheless, through disciplined execution of its core strategy, the Group is well positioned to maximise shareholder returns. We remain confident in our ability to continue delivering returns to our shareholders through this focused execution of strategy