23rd Jul 2025 12:00
(Alliance News) - Gem Diamonds Ltd on Wednesday said it met production targets in its latest half year, but "has not been immune" to weakened prices and forex headwinds and is implementing cost-saving measures.
The stock was trading 15% lower at 5.12 pence late on Wednesday morning in London.
The Lesotho and Botswana-focused diamond miner said that for the six months ended June 30, the amount of waste tonnes stripped fell 46% to 1.7 million from 3.2 million tonnes in the first half of 2024.
Carats recovered fell 16% to 47,125 from 55,873, while the grade recovered decreased to 1.88 carats per hundred tonnes from 2.20 cpht.
"The highest price achieved in the period was USD26,441 per carat for a 67.50 carat white diamond," Gem said, adding: "Six diamonds sold for more than USD1.0 million each, generating aggregate revenue of USD9.3 million in the period."
Carats sold dropped 22% to 44,360 from 56,944. The total value dropped 43% to USD44.7 million from USD77.9 million.
"Considering the prolonged weakness in global diamond prices, compounded by a weak US dollar and ongoing US tariff uncertainties, Gem Diamonds has implemented decisive measures to conserve cash and protect shareholder value," the firm said. "While the company has met its production targets, it has not been immune to the sustained pressure on rough diamond prices and adverse exchange rate movements."
Gem said it expects to reduce costs by between USD1.4 million and USD1.6 million per month, with key "short-term cashflow optimisation measures implemented" including a reduction in the Main and Satellite pits' waste mining volumes "for an initial 12-month period".
Other measures include temporary reductions in board, executive and management personnel's salaries. Additionally, Gem said it "regrets that a reduction in workforce of approximately 250 employees (representing 20% of the current workforce) may be necessary to align with the scaled-back waste mining operations and other necessary operational changes", and it has started engaging with "employees and relevant stakeholders".
Gem Diamonds also noted that as of June 1, Botswana's Department of Mines has assumed full responsibility for the Ghaghoo mine site after it was formally returned to the Botswana Ministry of Minerals & Energy.
Looking ahead, Gem has revised parts of its 2025 guidance. This includes slashing guidance for waste tonnes mined to 1.8 million to 2.0 million tonnes, from its previous range of 5.0 million to 5.5 million tonnes. Conversely, the outlook for Satellite pipe ore treated is up to between 1.2 million and 1.4 million tonnes, up from 800,000 to 1.0 million tonnes.
Gem Diamonds also expects to sell between 84,000 and 87,000 carats, down from prior guidance of between 86,000 and 89,000 tonnes. It also narrowed its guidance range for total capital expenditures to between USD4.0 million and USD5.0 million, having previously forecast capex of up to USD6.0 million.
By Emma Curzon, Alliance News reporter
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