Gem Diamonds Ltd
LSE:GEMD
Gem Diamonds Ltd
Gem Diamonds Ltd. operates as a holding company, which engages in the exploration and development of diamond mines. The Company’s operations include Letseng and Ghaghoo. The firm owns 70% of the Letseng mine in Lesotho. The Letseng mine is located in the Maluti Mountains of Lesotho and it recovers Type II diamonds. Letseng also produces pink and blue diamonds. The Ghaghoo mine, situated near the south-eastern border of the Central Kalahari Game Reserve. The mine consists of a 10.4 hectares (ha) kimberlite pipe. Diamonds produced at Ghaghoo are of a commercial and lower value and size than those from Letseng. The Company’s subsidiaries include Gem Diamond Technical Services (Proprietary) Limited, Gem Equity Group Limited, Letseng Diamonds (Proprietary) Limited and Gem Diamonds Botswana (Proprietary) Limited.
Gem Diamonds Ltd. operates as a holding company, which engages in the exploration and development of diamond mines. The Company’s operations include Letseng and Ghaghoo. The firm owns 70% of the Letseng mine in Lesotho. The Letseng mine is located in the Maluti Mountains of Lesotho and it recovers Type II diamonds. Letseng also produces pink and blue diamonds. The Ghaghoo mine, situated near the south-eastern border of the Central Kalahari Game Reserve. The mine consists of a 10.4 hectares (ha) kimberlite pipe. Diamonds produced at Ghaghoo are of a commercial and lower value and size than those from Letseng. The Company’s subsidiaries include Gem Diamond Technical Services (Proprietary) Limited, Gem Equity Group Limited, Letseng Diamonds (Proprietary) Limited and Gem Diamonds Botswana (Proprietary) Limited.
Revenue Decline: Gem Diamonds reported revenue of $45.5 million, down from $78 million in the prior year, driven by lower carat prices and volumes.
Price Pressure: Average price per carat dropped to $1,008, a historical low, from $1,366 last year due to weak diamond market conditions.
Negative Earnings: The company recorded a negative EBITDA of $2.6 million and a loss per share of $0.084 for the half year.
Aggressive Cost Cutting: Management implemented significant cost reductions, including 240 layoffs and executive salary cuts, resulting in $1.5 million per month in savings.
Flexible Mine Plan: The mine plan was revised to reduce waste mining and adapt quickly to market changes, deferring major waste stripping and extending mine flexibility.
Industry Challenges: Management highlighted ongoing industry headwinds, including US tariffs on Indian diamonds, weak demand from China, and global geopolitical tensions.
Optimism for Recovery: Despite losses, management believes Gem Diamonds is well positioned to benefit when market conditions improve.
