London England — MININGREVIEW.COM — 27 August 2009 – Leading global diamond producer Gem Diamonds has emerged profitably from the international economic downturn, but has confirmed its intention of disposing of its operations in the Democratic Republic of Congo (DRC) and the Central African Republic (CAR).
Releasing its interim results for the six months ended 30 June 2009 here, the company said that it had pursued a strategy of focusing on cash preservation and generating maximum cash flow from its producing mines, LetÅ¡eng in Lesotho and Ellendale in Australia.
As a result of a strong operational performance at these mines, and despite challenging market conditions, the company had produced an attributable profit for the period of US$3.3 million (R26 million).
Gem Diamonds CEO Clifford Elphick commented: “After undertaking a successful capital raising, the company is entering the second half of the year with a strong balance sheet and no debt. Demand for top quality and top colour large stones is continuing and prices seem to have stabilised. At the retail end of the chain, demand for diamond wedding jewellery remains strong in the Middle East, Asia and the US,” he added, and there is also growth in demand for diamonds from China.”
The results statement said as a result of the strategy of focusing on cash generation, operations in the CAR and the DRC remained on care and maintenance. Negotiations with the government of Botswana concerning a mining licence for the Gope deposit were ongoing.
It went on to say that in Angola the Chiri project had been placed on care and maintenance for the remainder of 2009. Operations in the DRC and CAR were under continuous review, and management was actively seeking opportunities to dispose of these operations.