TIDMGEMD
RNS Number : 2173I
Gem Diamonds Limited
11 August 2021
11 August 2021
GEM DIAMONDS LIMITED
H1 2021 Trading Update
Gem Diamonds Limited (LSE: GEMD) ("Gem Diamonds" or the
"Company" or the "Group") provides the following Trading Update
detailing the Group's operational and sales performance from 1
January 2021 to 30 June 2021 ("H1 2021" or the "Period").
Highlights:
-- Three diamonds greater than 100 carats were recovered during
the Period, including the recovery of the high quality 367 and 254
carat Type IIa white diamonds.
-- The highest price per carat achieved in the Period was US$119
886 for a 3.35 carat pink diamond.
-- The highest price per carat achieved in the Period for a
white Type IIa diamond was US$40 139 for the 254 carat stone.
-- Carats recovered during the Period were 58 831 (H2 2020: 57 504).
-- Carats sold during the Period were 55 124 (H2 2020: 55 939).
-- Revenue for the Period was US$104.0 million (H2 2020: US$115.1 million).
-- Average price achieved for Q2 2021 was US$2 131 per carat, an
increase of 31% over Q1 2021, resulting in an average of US$1 886
for the Period (H2 2020: US$2 057 per carat).
-- 10 diamonds sold for more than US$1.0 million each,
generating revenue of US$36.1 million during the Period.
-- The 2021 production and cost guidance, as reported on 11 March 2021, remains on target.
Covid-19:
-- The Group continues to stringently apply its wide range of
Covid-19 protocols, health and safety measures and other
precautions to protect its employees and contractors at its
operations. This has had a positive effect in containing infections
across the Group and has allowed operations to continue in a safe
and responsible manner.
-- The Group continues to provide support to its workforce,
contractors and surrounding communities in its efforts to curb the
spread of the virus where it operates. Letšeng partnered with the
Government of the Kingdom of Lesotho to increase preparedness for
the impact of Covid-19 in project-affected communities. The mine
acquired 20 000 doses of the Johnson & Johnson vaccine for use
by the Government of the Kingdom of Lesotho in its national vaccine
rollout programme.
-- The Ministry of Health has confirmed that the vaccinations
rollout for the workforce at Letšeng will commence on Friday 13(th)
August.
Corporate and Financial:
-- The Group ended the Period with US$33.9 million of cash on
hand. Drawn down facilities amounted to US$14.3 million resulting
in a net cash position of US$19.6 million at Period end (Q1 2021:
net cash of US$11.7 million).
-- The Group had undrawn and available facilities of US$61.0
million at Period end. The Letšeng LSL500 million (US$35.0 million)
revolving credit facility which expired in July 2021 was rolled
over to December 2021 to facilitate the consolidated debt
refinancing project of the Group's key credit facilities which is
planned to be concluded in Q4 2021.
-- During the Period, Letšeng paid the remaining dividend of
US$10.0 million which was declared in 2020. This resulted in a net
cash flow of US$6.7 million to Gem Diamonds and a cash outflow from
the Group of US$0.3 million relating to withholding taxes and
US$3.0 million in respect of the Government of Lesotho's share of
the dividend.
-- During the Period, Letšeng settled its 2020 income tax
obligations resulting in a payment of US$11.7 million to the
Lesotho Revenue Authorities. In addition, the first provisional tax
payment for 2021 amounting to US$3.8 million was paid in June
2021.
-- Following the AGM on 2 June 2021 and approval of the 2020
dividend, US$3.5 million was paid to the Gem Diamonds' shareholders
on 15 June 2021.
-- The Business Transformation targeted US$100 million in
incremental revenue, productivity improvements and cost savings
over the 4-year period to end 2021 remains on target to be
delivered.
-- The process to sell Ghaghoo continues.
Gem Diamonds' CEO, Clifford Elphick, commented:
"It is pleasing to see demand for Letšeng's high quality
diamonds continue the upward momentum from late 2020 with strong
prices achieved in the Period.
The stringent Covid-19 protocols implemented at Letšeng have
contained infections and allowed operations to continue in a safe
and responsible manner especially through the recent third wave
experienced in Southern Africa. It is encouraging to have received
confirmation from the Lesotho Department of Health that the
vaccination rollout at the Letšeng mine will commence on Friday
13(th) August.
We were pleased to welcome Rosalind Kainyah to the Board and are
grateful to Johnny Velloza, who has stepped off the Board, for the
invaluable service he has given to the Company over the past 5
years, initially as COO and deputy CEO and more recently as a
non-executive director and are delighted that he will continue to
act for the Group in a consultant capacity."
1. Diamond Market
Prices achieved for Letšeng's diamonds reflected the continued
improvement in market conditions seen in Q1 2021, with prices
achieved in the Period, on a like-for-like basis, higher than those
achieved during the latter part of 2020.
2. Letšeng
2.1. Rough diamond sales
H1 2021 Q2 2021 Q1 2021 H2 2020 H1 2021 vs H2 2020 % Change
Carats sold 55 124 28 208 26 916 55 939 -1%
-------- -------- -------- -------- ----------------------------
Total value (US$ millions) 104.0 60.1 43.9 115.1 -10%
-------- -------- -------- -------- ----------------------------
US$/carat 1 886 2 131 1 630 2 057 -8%
-------- -------- -------- -------- ----------------------------
2.2. Production
H1 2021 Q2 2021 Q1 2021 H2 2020 H1 2021 vs H2 2020 % Change
Waste tonnes stripped 10 167 526 5 237 843 4 929 683 10 405 661 -2%
----------- ---------- ---------- ----------- ----------------------------
Ore tonnes treated 3 139 719 1 616 616 1 523 103 3 082 405 +2%
----------- ---------- ---------- ----------- ----------------------------
Satellite pipe contribution (tonnes) 1 672 289 906 926 765 363 1 636 287 +2%
----------- ---------- ---------- ----------- ----------------------------
Carats recovered (1) 58 831 29 821 29 010 57 504 +2%
----------- ---------- ---------- ----------- ----------------------------
Grade recovered (cpht) (1) 1.87 1.84 1.90 1.87 -
----------- ---------- ---------- ----------- ----------------------------
(1) Includes carats produced from the Letšeng Plants, the
Alluvial Ventures (AV) plant and the recovery tailings treatment
facility.
Waste stripping continued in line with the requirements of the
updated long-term mine plan to ensure the future availability of
ore and incorporates the steeper inter-ramp slope angles. During
the Period, a total of 10.2 million tonnes of waste material was
mined.
Letšeng's Plants treated a total of 2.6 million tonnes of ore
during the Period of which 1.7 million tonnes were sourced from the
Satellite pipe and 0.9 million from the Main pipe. In addition, 0.5
million tonnes were treated through the Alluvial Ventures
contractor plant. Plant 1 was shut down for 3.5 days for planned
maintenance in which several remedial and preventative maintenance
tasks were undertaken.
Following the operational performance in H1 2021, the 2021
production and cost guidance, as reported on 11 March 2021, remains
on target.
3. Sustainability
In June 2021, a dedicated safety day was held for engagement
with the workforce on safety, employee health and general
performance related matters. These engagements were productive and
a report back structure has been adopted to address the relevant
safety, employee health and performance matters raised.
During the Period, 4 LTI's occurred, and the Group-wide All
Injury Frequency Rate was 1.29.
No major or significant community or environmental incidents
occurred across the Group during the Period. The Group has adopted
the recommendations of the Task Force on Climate-related Financial
Disclosures (TCFD) and is working towards including these
recommendations into the Group's governance and risk management
structures, strategy and reporting platforms.
FOR FURTHER INFORMATION:
Gem Diamonds Limited
Susan Wallace, Company Secretarial department
ir@gemdiamonds.com
Celicourt Communications
Mark Antelme / Ollie Mills
Tel: +44 (0) 208 434 2643
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014.
The Gem Diamonds Limited LEI number is 213800RC2PGGMZQG8L67.
ABOUT GEM DIAMONDS:
Gem Diamonds is a leading global diamond producer of large high
value diamonds. The Company owns 70% of the Letšeng mine in Lesotho
and is currently in the process of selling its 100% share of the
Ghaghoo mine in Botswana. The Letšeng mine is famous for the
production of large, exceptional white diamonds, making it the
highest dollar per carat kimberlite diamond mine in the world.
www.gemdiamonds.com
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