HomeDiamonds & GemstonesGem Diamonds takes off

Gem Diamonds takes off

Gem’s Letseng
satellite pit
in Lesotho
London, England — MININGREVIEW.COM — February 7, 2008 – Gem Diamonds Limited – a leading global diamond mining company pursuing an accelerated growth strategy through targeted acquisitions and the development of existing assets – has spent US$404 million (R3 billion) in its first year of operation on new acquisitions in Africa, Australia and South-East Asia.

A trading update for the twelve months ended 31 December 2007 revealed that the company’s new acquisitions in Africa were in Botswana and the Democratic Republic of Congo (DRC). It added that early-stage operations in the Central African Republic had been progressed.

Life of mine at the Letseng mine in Lesotho is estimated at 70 years, hence the decision was taken to double the mine’s hard rock processing capacity with the construction of a second plant. Commissioning is scheduled to start in Q1 of 2008, building up to full production during Q2.

The final cost of the plant is estimated at about $52 million (R390 million). Combined with the current 2.6mtpa processing plant, the two plants will process 5.3mtpa.

Total sales from the Letseng Mine in 2007 were US$152 million (more than R1.1 billion) – an 80% increase on the US$83.9 million (R630 million) raised in the previous year. The sales comprised 76 873 carats – 45% more than the 52 998 carats sold in 2006.

In Botswana, Gem Diamonds acquired Gope Exploration Company (Gope) in May 2007. A mining license application was submitted in July 2007, and negotiations with the Botswana Department of Mines are commencing in 2008 to determine the key terms of the mining license. The capital expenditure to develop a mine at Gope is estimated at approximately US$450 million (about R3.3 billion).

In the DRC Gem Diamonds has interests in three projects at Mbelenge, Lubembe and Longatshimo. These properties have an estimated 10.3 million cts in situ, 82% of which is classified at the deposit level.

Gem Diamonds holds a 75% interest in Gem Diamonds Centrafrique SA, in partnership with the Government of the Central African Republic. The company holds exclusive exploration and mining rights to the 800km2 Mambéré Concession, and is trying to enlarge the size of the exploration rights to more than 4 500 km2.