Gem Diamonds Di Regulatory News (GEMD)

7 Mar 2007 09:41

Gem Diamonds Limited07 March 2007 7 March 2007 LETSENG DIAMONDS SELLS 215 CARAT WHITE DIAMOND FOR US$8.3 MILLION •US$38,418 per carat price achieved for 215 carat * D colour white diamond •Forms part of a tender that reached a total price of US$18,4 million •Follows the sale of the 603ct Lesotho Promise last year for US$12.4 million Gem Diamonds Limited (Gem Diamonds), which joined the Main Board of the LondonStock Exchange last month (LSE: GEMD) and its partner the Government of theKingdom of Lesotho (Lesotho Government), the owners and operators of the LetsengDiamond Mine in Lesotho, are pleased to announce the sale of a 215 carat white Dcolour diamond in Antwerp on 28 February 2007 for US$8.3 million (US$38,418 percarat).. The diamond was recovered at the Letseng mine on 26 January 2007 andwas sold in a tender including two other exceptional white D colour flawlessstones of 66 and 54 carats which sold for US$1.2 million and US$1.4 millionrespectively. The result for the whole of this recent tender where a total of 7092 carats were sold was US$18.4 million. At an average price per carat ofUS$2,598 this is the highest average price per tender for the Letseng mine todate. The 215 white diamond was bought by Omega Diamonds. The Letseng mine is building a reputation for producing exceptional qualitystones, after the recovery last year of the Lesotho Promise, the 15th largestdiamond ever found, which was sold in Antwerp to SAFDICO, the cutting andpolishing business of Graff Jewellers, for US$12.4million. The mine is situatedin the Maloti Mountains in Lesotho, renowned for the quality and size of itsdiamonds and for a revenue per carat currently unsurpassed in kimberlite diamondmining. Lesotho's newly appointed Minister of Natural Resources, Honourable MonyaneMoleleke said: "The diamonds that Letseng produces form part of Lesotho's unique heritage andas such we are extremely pleased that the market continues to appreciate themfor their remarkable value" Clifford Elphick, CEO of Gem Diamonds said: "Letseng continues to produce diamonds of the highest quality and we are verypleased with the prices achieved at this tender. As Gem Diamonds enters its nextphase of development as a quoted company, we believe that Letseng will continueto provide a solid foundation for the Group." * The diamond which weighed in at 216 carats on recovery, was correctly determined to be 215 carats following the boiling process which all diamonds undergo before they are sold. ENDS For further information: Gem Diamonds Limited Tel: +27 83 578 3885Angela Parr Merlin David Simonson Bridget Fury Tel: +44 20 7653 6620 About Gem Diamonds Limited (Gem Diamonds) Gem Diamonds is a specialist diamond mining group with assets concentrated inAfrica. The Group was founded in July 2005 by Clifford Elphick, a highlyexperienced diamond mining executive, who was previously Managing Director of EOppenheimer & Son. Gem Diamonds has a balanced portfolio of assets, includingearly stage exploration projects right through to Letseng, a producing diamondmine with strong, positive cash flow. It is the operator of and owner of amajority stake in the successful Letseng diamond mine in Lesotho, with theremainder being held by the Government of Lesotho. It also has interests inexploration projects in the Longatshimo and Tshumbe-Lubembe regions of theDemocratic Republic of Congo and the Mambere River region in the Central AfricanRepublic and has recently concluded a significant co-operation agreement andoption to invest in the Chiri kimberlite in Angola The directorate comprises Clifford Elphick as Chairman and Chief ExecutiveOfficer, Kevin Burford as Chief Financial Officer and Graham Wheelock as MineralResources Manager. Senior management includes Terry Stewart as Chief OperatingOfficer and Glenn Turner as Chief Commercial and Legal Officer. Gem Diamonds is listed on the Main Market of the London Stock Exchange andtrades under the code GEMD. At the time of this announcement the marketcapitalization of the company is (£634 million). Letseng Diamonds (Pty) Ltd (Letseng Diamonds) Letseng Diamonds was incorporated in Lesotho in 1995 with the intention ofseeking a mining lease from the Government of Lesotho to re-open the LetsengDiamond Mine on the high plateaux of the Maloti Mountains. The mine was previously operated by De Beers from 1977 to 1982 and was closedwith less than 10% of the open pit mineable ore having been treated. An initialapplication by JCI Ltd was made to the Government of Lesotho in September of1996 followed by a second revised application in 1998 which subsequently led tothe signing of the Concession Agreement and the granting of the Mining Lease inNovember 1999 to JCI. Mining operations commenced in April 2004. In July of2006, Gem Diamonds acquired JCI's 76% stake in Letseng Diamonds, subsequentlytransferring 6% of this stake to its partners the Government of the Kingdom ofLesotho who now hold 30%. Ninety percent of the diamonds recovered are gem quality and a significantproportion graded as D colour. Since Letseng recommenced production in April2004, to September 2006, approximately 14.3% of production has been largediamonds (those in excess of 10.8 carats). Letseng is the highest diamond minein the world and produces diamonds which currently sell for highest per caratprice of any kimberlite mine. This information is provided by RNS The company news service from the London Stock Exchange