Gem Diamonds Revenue Totals $180.2 Million in H1 2012

Ghaghoo, Botswana

(IDEX Online News) – Gem Diamonds Limited today (Tuesday) announced that for the first half of 2012, ended June, 30, its revenue totaled $180.2 million. In the same period in 2011, revenue reached $196.5 million.

The company also announced an attributable net profit of $14.3 million ($28.9 million in H1 2011).

Gem Diamonds reported continued solid performance at its Letšeng mine in Lesotho. The mine saw production of 57,116 carats, up 8 percent from the first half of 2011.

The recovered grade of 1.68 carats per hundred tons was also up 8 percent over 2011.

According to the report, good progress has been made on the Letšeng production expansion project (Project Kholo), which began in January.

The Ellendale mine in Australia produced 78,881 carats, up 51 percent from the first half of 2011.

Gem announced that although it remains committed to doubling production at Project Kholo and the development of Ghaghoo in Botswana, in light of the current economic climate and to maintain the its strong balance sheet, the board has extended the completion dates of the two projects. If market conditions improve materially, it says the project execution will be accelerated.

“Against a challenging price backdrop for the diamond industry, the first half of 2012 was marked by strong operating performance by both Gem Diamonds’ producing mines, the Letšeng mine in Lesotho and the Ellendale mine in Australia,” said Clifford Elphick, chief executive of Gem Diamonds.

“Letšeng reported an increase in both carats recovered and recovered grade compared to H1 2011, with cash costs being held in line with management estimates. Ellendale reported a significant increase in both ore mined and treated and carats produced, which achieved strong prices during the period despite the challenging market conditions.”