FULL YEAR RESULTSFOR THE PERIOD ENDING 31 DECEMBER 2014

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Gem Diamonds Limited (the Company) is pleased to announce its Full Year results for the period ending 31 December 2014.

During 2014, Gem Diamonds demonstrated a strong operational performance, delivering on a number of strategic objectives, resulting in a robust financial position and maiden dividend. The Company continued to focus on enhancing operational efficiencies and investing in innovative technologies at both Letšeng and Ghaghoo, delivering improved earnings and positioning Gem Diamonds for long term sustainable growth.

FINANCIAL RESULTS

  • Revenue US$271 million, up 27 %
  • TUnderlying EBITDA US$104 million, up 35 %
  • Attributable net profit US$33 million, up 57 %
  • Basic EPS 24 US cents, up 57 %
  • Cash on hand US$111 million as at 31 December 2014 (net after debt); (US$99.4 million attributable to Gem Diamonds)

OPERATIONAL RESULTS:

LETŠENG:

  • Carats recovered of 108 569
  • Average of US$2 540 per carat
  • Tonnes treated of 6.4 million
  • Waste tonnes moved of 19.8 million

GHAGHOO:

  • The Phase 1 capital project has been completed on time and on budget
  • Final commissioning and optimisation of the plant is in progress
  • A total of 10 167 carats recovered during commissioning, (including a 20 carat white diamond, a 17 carat white diamond and a three carat orange diamond)

DIVIDEND

  • 5 US cents per share
  • Total dividend of US$6.9 million
  • Record date: 8 May 2015
  • Payment date: 9 June 2015

Commenting on the results today, Clifford Elphick, Chief Executive Officer of Gem Diamonds, said:

“2014 was a solid year both financially and operationally for Gem Diamonds. We successfully delivered on a number of key growth objectives including bringing Ghaghoo into production, significantly enhancing operational efficiencies at Letšeng and delivering a maiden dividend. With a continued focus on cost control, the Company is in a very strong position financially with cash balance of US$111 million, supported by the high average price per carat of US$2 540 achieved for the year. As we expand from a single producing mine to two producing mines, with the ramp up of production at Ghaghoo, we willstart to see a significant shift in production figures.

Whilst there have been a number of challenges in the diamond market recently, the medium to long term fundamentals look positive. This, combined with the resilience of Letšeng diamonds to pricing constraints, leaves Gem Diamonds well placed to take advantage of the favourable supply/demand dynamics in the market in order to continue its growth in 2015 and beyond”.

The Company will be hosting a webcast presentation on its full year results at 9.30am today. A copy of the full Annual Report 2014 and a live audio webcast of the presentation will be available on the Company's website: www.gemdiamonds.com

FOR FURTHER INFORMATION:

Gem Diamonds Limited

Sherryn Tedder, Investor Relations
Tel: +44 (0) 20 3043 0280

Bell Pottinger

Daniel Thole / Joanna Boon
Tel: +44 (0) 20 3772 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.