REG - Gem Diamonds Limited - Half Year 2023 Results
31/08/2023 07:00
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RNS Number : 8503K Gem Diamonds Limited 31 August 2023
Thursday, 31 August 2023
Gem Diamonds Limited
Half Year 2023 Results
Gem Diamonds Limited (LSE: GEMD) ("Gem Diamonds", the "Company" or the
"Group") announces its Half Year Results for the six months ended 30 June 2023
(the "Period").
FINANCIAL RESULTS:
· Revenue of US$71.8 million (H1 2022: US$100.0 million)
· Underlying EBITDA of US$8.4 million (H1 2022: US$20.9 million)
· Cash on hand of US$7.3 million as at 30 June 2023 (US$6.2 million
attributable to Gem Diamonds)
· The Group has unutilised facilities of US$72.9 million
· Loss per share of 0.7 US cents (H1 2022: earnings per share of 2.7 US
cents)
OPERATIONAL RESULTS:
Letšeng
· Zero fatalities and one lost time injury
· Recovered 50 601 carats (H1 2022: 55 157 carats)
· Waste tonnes mined of 4.8 million tonnes (H1 2022: 6.3 million tonnes)
· Ore treated of 2.5 million tonnes (H1 2022: 3.0 million tonnes)
· Average value of US$1 373 per carat achieved (H1 2022: US$1 745 per
carat)
Safety performance
The organisational safety culture maturity strategy, that commenced in 2021 to
improve safety performance at Letšeng, has been fully executed and led to an
improved safety performance during the Period. Letšeng recorded zero
fatalities and one LTI during the Period (2022: three), resulting in an
improved LTIFR and AIFR of 0.09 (2022: 0.13) and 0.57 (2022: 0.7),
respectively.
Diamond market
The global rough diamond market has experienced a downturn in 2023. A decrease
in the number of large, high-value diamonds recovered, combined with market
pressure has negatively impacted the average dollar per carat and revenue
achieved during the Period.
Operational performance
Increasing grid electricity interruptions caused a reduction in volumes of ore
processed. In addition, higher than expected internal basalt dilution in
certain domains of ore that was treated impacted throughput. To mitigate the
impact of internal basalt dilution, improve plant stability and large diamond
recoveries, in the latter part of Q2 2023, an operational decision to open
crusher gaps and to slow throughput in the processing plant was implemented.
TCFD and Climate
Following the adoption of the TCFD recommendations, the Group committed to a
carbon emissions (Scope 1 and 2) reduction target of 30% by 2030. Improving
energy-use efficiency and reducing the consumption of diesel and electricity
remain top priorities, while appropriate alternative low-carbon and renewable
energy sources are being considered.
Commenting on the results today, Clifford Elphick, Chief Executive Officer of
Gem Diamonds, said:
"The downturn in the rough diamond market together with increased grid
electricity interruptions which increased operating costs, negatively impacted
our financial results for the Period.
Our focus remains on stabilising our plants to improve large diamond
recoveries and to critically review all operational and capital expenditure."
The Company will host a live audio webcast presentation of the half year
results today, 31 August 2023, at 9:30 GMT. This can be viewed on the
Company's website: www.gemdiamonds.com.
The page references in this announcement refer to the Half Year Report 2023,
which can be found on the Company's website: www.gemdiamonds.com
(file://///g4/Gemdiamond/Accounts1/Reporting%20Periods/2023/HY/Front%20end/RNS/www.gemdiamonds.com)
.
The Gem Diamonds Limited LEI number is 213800RC2PGGMZQG8L67
FOR FURTHER INFORMATION:
Gem Diamonds Limited
ir@gemdiamonds.com
Celicourt Communications
Mark Antelme / Felicity Winkles
Tel: +44 (0) 208 434 2643
ABOUT GEM DIAMONDS:
Gem Diamonds is a leading global diamond producer of 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, top colour, exceptional
white diamonds, making it the highest dollar per carat kimberlite diamond mine
in the world.
INTERIM BUSINESS REVIEW
OVERVIEW
The Group presents its results for the six months ended 30 June 2023 (the
Period), achieving an underlying EBITDA from continuing operations of US$8.4
million (H1 2022: US$20.9 million) and an attributable loss of US$1.0 million
(H1 2022: profit of US$3.8 million).
The global economic backdrop for the Period remained challenging despite
easing inflationary pressures in major economies at the start of 2023. Ongoing
geopolitical tensions and domestic challenges in key markets are slowing the
return to sustained growth. The World Bank downgraded its global real GDP
forecast for 2023 to 2.1%1 from 3.1% in 2022, and has warned that global
growth is projected to slow significantly amid high inflation, tight monetary
policy and more restrictive credit conditions.
The global rough diamond market has experienced a downturn in 2023. A decrease
in the number of large, high-value diamonds recovered, combined with market
pressure has negatively impacted the average dollar per carat and revenue
achieved during the Period. Revenue decreased by 28% to US$71.8 million
compared to US$100.0 million in H1 2022, achieving an average price of
US$1 373 per carat (H1 2022: US$1 745 per carat) from the sale of 52 163
carats (H1 2022: 57 075 carats).
The Group ended the Period with a cash balance of US$7.3 million (31 December
2022: US$8.7 million) and drawn down facilities of US$9.3 million (31 December
2022: US$5.4 million), resulting in a net debt position of US$2.0 million (31
December 2022: net cash of US$3.3 million) and unutilised available facilities
of US$72.9 million (31 December 2022: US$82.6 million).
Increasing grid electricity interruptions caused a reduction in volumes of ore
processed. In the first six months of the year there was only one day without
load shedding by Eskom, the South African grid electricity provider, from
which the mine sources its power. Letšeng experienced 180 days of load
shedding in the Period compared to a total of 205 days of load shedding for
the full year 2022.
Waste tonnes mined during the Period were 4.8 million tonnes (H1 2022: 6.3
million), in accordance with the mine plan. Ore tonnes treated were 2.5
million tonnes (H1 2022: 3.0 million), and 50 601 carats were recovered (H1
2022: 55 157). The decrease in ore tonnes treated and carats recovered is
mainly due to the expiry of the Alluvial Ventures (AV) contract on 30 June
2022, which contributed 0.4 million tonnes and 4 409 carats in H1 2022. Two
greater than 100 carat diamonds were recovered during the Period; one of these
was sold in the Period and the second will be sold in September.
In March, Letšeng embarked on a programme to critically review its
operational structures and requirements, primarily to optimise its operations
and drive its objective to reduce operating costs. The workforce element of
this right-sizing programme was completed in June, and the focus will now be
on further optimisation of the current operations by implementing efficiencies
and identifying opportunities to further reduce costs.
As part of this process, a number of changes were made in the senior
leadership structure at Letšeng. Kelebone Leisanyane retired from his
position as CEO of Letšeng at the expiration of his contract at the end of
June 2023. He was succeeded by Motooane Thinyane, previously the Head of
Operations. Thinyane has been a senior manager and executive of Letšeng for
the past eight years. He has a deep understanding and appreciation of
Letšeng's business and its challenges, employees, stakeholders and
communities, and also possesses the necessary technical skills and experience
of diamond mining in Lesotho. An important part of his role will be
spearheading the identification and implementation of appropriate alternative
energy solutions. Gideon Scheepers has been appointed to the position of
Operations Director. Gideon was most recently the general manager and
executive director at the Mothae diamond mine in Lesotho. He has 32 years of
extensive experience in diamond mining and related processes, many of these in
the Lesotho diamond mining industry. The leadership and management at Letšeng
is well-equipped to ensure that the mine continues to conduct its operations
safely, efficiently and effectively in the best interest of all stakeholders.
The safety of our workforce remains a top priority. The critical control
management strategy that commenced in 2021 to mature the organisational safety
culture at Letšeng has been fully executed. This concerted effort has led to
an improved safety performance, with an all injury frequency rate (AIFR) of
0.57 recorded during the Period - the lowest number recorded in the past 10
years.
In support of our continued focus on sustainability and maintaining our social
licence to operate, we are proud that Gem Diamonds won the Junior ESG Award
2023 for "Water" at the Investing in African Mining Indaba in February. The
award was given in recognition of the Group's commitment to improving access
to clean water for local communities and its innovative and effective systems
for preventing and mitigating water pollution.
We continue to work towards our 2023 objectives of improving operational
energy efficiencies and reducing carbon emissions as set out in our
decarbonisation strategy and the three-year Task Force on Climate-related
Financial Disclosures (TCFD) adoption roadmap. For more details, refer to Our
Approach to Climate Change Half-Year Report available on our website at
www.gemdiamonds.com.
LOOKING AHEAD
We continue to identify and implement initiatives to improve operational
efficiency and reduce our energy consumption - while investigating alternative
energy sources - with the aim of mitigating the impact of the significant
increase in operating costs experienced over the past 18 months and reducing
our carbon footprint.
1 https://www.worldbank.org/en/publication/global-economic-prospects
OPERATIONS REVIEW: LETŠENG
H1 2023 IN REVIEW
• Zero fatalities and one lost time injury (LTI)
• Zero significant or major environmental or social incidents
• Recovered two diamonds greater than 100 carats (H1 2022: three)
• Achieved an average price of US$1 373 per carat (H1 2022: US$1 745 per
carat)
• The highest price achieved was US$282 889 per carat for a 6.63 carat pink
diamond
SUSTAINABILITY
The organisational safety culture maturity strategy that commenced in 2021 to
improve safety performance at Letšeng, has been fully executed and led to an
improved safety performance during the Period, as tabled below. Group and
operational leadership remain committed to proactively leading safety-focused
improvement through regular engagements with the workforce.
Safety performance Unit H1 2023 2022 2021 2020 2019
Fatalities Number 0 0 0 0 1
LTIs Number 1 3 6 1 7
LTIFR 200 000 man hours 0.09 0.13 0.24 0.04 0.28
AIFR 200 000 man hours 0.57 0.70 0.93 0.76 0.93
Our focused Corporate Social Responsibility Investment (CSRI) strategy and
initiatives support our social licence to operate and our commitment to the UN
Sustainable Development Goals. The Group has continued its tertiary education
scholarships to enhance skills related to geology, metallurgy, engineering and
emergency medical care in Lesotho. There are currently seven active
scholarships. Letšeng's community dairy project and sponsored egg circles are
proving successful and we continue to work towards ensuring the sustainability
of both these projects. The construction of additional classrooms at two
primary schools in the surrounding area were also completed during the Period.
Following the adoption of the TCFD recommendations, the Group committed to a
carbon emissions (Scope 1 and 2) reduction target of 30% by 2030. Improving
energy-use efficiency and reducing the consumption of diesel and electricity
remain top priorities, while appropriate alternative low-carbon and renewable
energy sources are being considered. Operational initiatives implemented
during the Period, such as shorter hauling distances, steeper slopes and the
replacement of existing lighting infrastructure with energy-efficient
equipment, have resulted in a reduction in energy consumption of 29% compared
to H1 2022. For more details, refer to Our Approach to Climate Change
Half-Year Report available on our website at www.gemdiamonds.com
(file://///g4/Gemdiamond/Accounts1/Reporting%20Periods/2023/HY/Front%20end/RNS/www.gemdiamonds.com)
.
Gem Diamonds has implemented its Group residue storage facility (RSF)
management policy and has aligned its RSF standard with the ICMM Global
Industry Standard on Tailings Management (GISTM). The Group has established
appropriate governance structures at both operational and Group levels to
provide oversight and assurance of continued safe and responsible management
of our RSFs.
PRODUCTION OVERVIEW
Unit H1 2023 H1 2022 % change
Waste mined tonnes 4 846 680 6 289 380 (23)
Ore mined tonnes 2 787 124 3 219 615 (13)
Ore treated tonnes 2 467 250 3 017 664 (18)
Carats recovered carats 50 601 55 157 (8)
Recovered grade cpht1 2.05 1.83 12
1 Carats per hundred tonnes.
Waste mining decreased by 23% to 4.8 million tonnes from 6.3 million tonnes in
H1 2022, in accordance with the 2023 mine plan. The lower waste tonnes were
mainly due to lower ore treatment targets. 2.5 million ore tonnes were treated
(H1 2022: 3.0 million tonnes), a decrease of 0.5 million tonnes. The decrease
is mainly due to the 0.4 million tonnes that were treated by third-party
processing contractor Alluvial Ventures (AV) in H1 2022 prior to the expiry
of their contract on 30 June 2022. The remaining 0.1 million tonnes were due
to increasing grid electricity interruptions which reduced the volumes of ore
processed. In addition, higher than expected internal basalt dilution in
certain domains of ore that was treated impacted throughput. An operational
decision to open crusher gaps and to slow throughput in the processing plant
was implemented in H2 2023 to enhance plant stability, improve large diamond
recoveries and more effectively treat ore blocks with higher levels of
internal basalt dilution.
Letšeng recovered 50 601 carats (H1 2022: 55 157 carats). The decrease in
volume of recoveries during the Period is mainly due to the absence of the AV
contribution to carats recovered, which was 4 409 carats in H1 2022.
The overall grade for H1 2023 was 2.05 cpht (H1 2022: 1.83 cpht), representing
an increase of 12%. This was driven by the expiry of the AV contract, whose
older technology pan-plant recovered at a lower grade, and a higher
contribution of higher-grade Satellite Pipe material, which accounted for 51%
of material treated during the Period (H1 2022: 46%). The grade for the
material treated during the Period is in line with the expected reserve grade.
Frequency of large diamond recoveries
Number of diamonds H1 2023 H1 2022 FY average
2008 - 2022
>100 carats 2 3 8
60 - 100 carats 4 8 18
30 - 60 carats 28 42 76
20 - 30 carats 58 63 114
10 - 20 carats 226 258 447
Total diamonds > 10 carats 318 374 663
DIAMOND SALES
The average price achieved during the Period was US$1 373 per carat (H1
2022: US$1 745 per carat). 52 163 carats were sold, generating rough diamond
revenue of US$71.7 million (H1 2022: 57 075 carats at a value of US$99.6
million). The lower revenue is mainly attributed to the lower number of
diamonds greater than 10.8 carats recovered during the Period, as well as a
downturn in the rough diamond market negatively impacting rough diamond
prices.
The highest price achieved was US$282 889 per carat for a 6.63 carat pink
diamond, this being the third-highest price achieved to date for a Letšeng
diamond. 12 diamonds sold for more than US$1.0 million each, generating
revenue of US$21.0 million (H1 2022: 15 diamonds sold for more than US$1.0
million each, generating revenue of US$25.8 million).
RIGHT-SIZING OF LETŠENG
A change in the operational requirements, as well as pressure on operating
expenses and rough diamond prices, required the operation to critically review
all aspects of its business to ensure it operates optimally and with effective
cost management to secure its sustainability.
A right-sizing programme commenced at Letšeng in March 2023 and the workforce
element of the programme was completed in June. A total of 327 positions were
affected at Letšeng and its contractors during this phase of the programme,
which aimed at more effectively and efficiently aligning the workforce to
operational requirements.
The further optimisation of operations to ensure efficiency and effective cost
control management is a top priority and will include a review of all
operational contracts.
CAPITAL PROJECTS
The newly constructed modules for the replacement primary crushing area (PCA)
at Letšeng have been completed. Commissioning of the modules commenced
mid-July 2023.
The underground feasibility study to assess the viability of an earlier shift
to underground mining of the Satellite Pipe has progressed as planned and will
inform the trade-off decision between further open-pit cut-backs and
underground mining.
The construction of a 300 kilolitre bioremediation plant for run-off water
treatment has commenced and is expected to be completed in Q4 2023.
GHAGHOO
The Ghaghoo Diamond Mine in Botswana remains on care and maintenance and Gem
Diamonds is discussing various alternatives with affected stakeholders,
including the potential closure of the mine.
GROUP FINANCIAL PERFORMANCE
H1 2023 IN REVIEW
• Revenue achieved of US$71.8 million (H1 2022: US$100.0 million)
• Underlying EBITDA1 of US$8.4 million (H1 2022: US$20.9 million)
• Attributable loss of US$1.0 million (H1 2022: profit of US$3.8 million)
PROFITABILITY AND LIQUIDITY
US$ million H1 2023 H1 2022*
Revenue from contracts with customers 71.8 100.0
Royalties and selling costs (7.5) (10.8)
Cost of sales 1 (50.7) (63.3)
Corporate expenses (5.2) (5.0)
Underlying EBITDA 2 8.4 20.9
Depreciation and mining asset amortisation (3.3) (4.3)
Share-based payments (0.2) (0.1)
Other operating expenses (0.8) (1.0)
Foreign exchange gain 2.1 -
Net finance costs (2.2) (2.2)
Profit before tax for the Period 4.0 13.3
Income tax expense (2.5) (5.0)
Profit after tax for the Period 1.5 8.3
Non-controlling interests (2.5) (4.5)
Attributable (loss)/profit for the Period (1.0) 3.8
(Loss)/earnings per share (US cents) (0.7) 2.7
* The prior year figures have been re-presented, as Gem Diamonds Botswana
(Proprietary) Limited (Ghaghoo Diamond Mine) ceased to be classified as a
discontinued operation at 31 December 2022. Refer Note 15, Assets held for
sale.
1 Including waste stripping amortisation costs but excluding depreciation and
mining asset amortisation.
2 Underlying earnings before interest, tax, depreciation and mining asset
amortisation (EBITDA) as defined in Note 6, Underlying earnings before
interest, tax, depreciation and mining asset amortisation (underlying EBITDA)
of the condensed notes to the consolidated interim financial statements.
The Group generated an underlying EBITDA2 of US$8.4 million (H1 2022:
US$20.9 million). The loss attributable to shareholders was US$1.0 million
(H1 2022: profit of US$3.8 million), equating to a loss per share of 0.7
US cents (H1 2022: profit per share of 2.7 US cents) on a weighted average
number of shares in issue of 141.6 million (H1 2022: 142.1 million shares).
Revenue
US$ million H1 2023 H1 2022
Sales - rough 71.7 99.6
Sales - polished margin 0.1 0.3
Impact of carrying over rough diamonds - 0.1
Group revenue 71.8 100.0
The Group's revenue of US$71.8 million was mainly generated by the sale of
52 163 carats at an average price of US$1 373 per carat. The additional
US$0.1 million revenue was generated from a premium on the sale of polished
diamonds in accordance with the agreement with two diamond manufacturers who
supply polished diamonds to some of the world's premium luxury brands.
Costs
The Group closely manages its costs and preserves cash resources to maintain
appropriate liquidity. Operating expenses continue to be negatively impacted
by the volatile global economic environment and the ever-increasing frequency
of grid electricity interruptions in South Africa, which increases the
reliance on diesel-powered generators and, as a consequence, diesel
consumption.
OPERATING EXPENSES
Fuel prices remain a significant expense, with increased consumption for the
use of diesel-powered generators during load shedding, although prices
stabilised at around LSL18.50 per litre in the Period from a high in excess of
LSL20.00 per litre in mid-2022.
The right-sizing of Letšeng that was completed in June 2023 affected 327
positions at Letšeng and its contractors. Total severance payments amounted
to LSL23.2 million, of which LSL15.1 million was already provided for at
December 2022 in terms of normal leave and severance pay provisions.
Total direct cash costs at Letšeng, including waste, decreased marginally to
LSL1 040.8 million from LSL1 076.0 million in H1 2022. Additional
once-off expenses relating to the right-sizing, such as the severance payments
discussed above and related consulting fees, together with higher levels of
inflation and increased diesel consumption due to load shedding, negated the
expected decrease in costs from lower waste mining volumes.
Non-cash accounting charges comprise waste capitalisation and inventory and
stockpile movement. The net charge was similar to H1 2022, with a decrease in
the waste cost capitalised due to lower waste tonnes mined offset by an
increase in the volume of tonnes added to the stockpile. The additional tonnes
added to the stockpile were mainly due to the plants not treating the planned
ore tonnes mined as a result of load shedding and internal basalt dilution as
discussed in the Operations Review above.
Letšeng unit cost analysis
Unit cost per tonne treated Direct cash Third plant Total direct Non-cash accounting charges2 Total Waste cash
costs1 operator costs cash operating costs per
operating costs costs waste tonne
mined
H1 (LSL) 296.54 0.00 296.54 78.24 374.78 63.80
H1 (LSL) 223.76 14.28 238.04 85.67 323.71 56.88
% change 25 16 12
H1 (LSL) 16.28 0.00 16.28 4.29 20.57 3.50
H1 (LSL) 14.52 0.93 15.45 5.55 21.00 3.69
% change 5 (2) (5)
1 Direct mine cash costs represent all operating costs, excluding royalty and
selling costs.
2 Non-cash accounting charges include waste stripping cost amortised,
inventory and ore stockpile adjustments, and the impact of adopting IFRS 16
Leases, and exclude depreciation and mining asset amortisation.
Direct cash costs in H1 2023 were LSL296.54 per tonne treated compared to
LSL238.04 in H1 2022, which included the impact of AV tonnes and costs. The AV
contract expired on 30 June 2022, resulting in a reduction of 0.4 million ore
tonnes being treated in H1 2023 when compared to H1 2022. On a like-for-like
basis (excluding the impact of AV), the H1 2022 costs increase to LSL262.06
per tonne treated, resulting in a year-on-year increase of 13%. The 13%
increase in unit costs is driven by the additional costs mentioned above and a
4% reduction in tonnes processed through the Letšeng plants.
CORPORATE EXPENSES
Corporate office costs are incurred to provide expertise in all areas of the
business to realise maximum value from the Group's assets. These costs are
incurred by the Group through its technical and administrative offices in
South Africa (in South African rand) and head office in the UK (in British
pounds).
General corporate costs were US$5.2 million (H1 2022: US$5.0 million). The
increase was mainly due to structural changes in the senior leadership and
consulting fees related to reviewing new business opportunities, set off by
the weaker South African rand and British pound against the US dollar.
GHAGHOO
The Ghaghoo Diamond Mine in Botswana remains on care and maintenance and Gem
Diamonds is discussing various alternatives with affected stakeholders,
including the potential closure of the mine. The care and maintenance costs of
US$0.8 million (H1 2022: US$1.0 million) are included in other operating
expenses. The decrease in cash costs is mainly due to the favourable exchange
rate.
EXCHANGE RATE IMPACTS
While revenue is generated in US dollars, the majority of operational expenses
are incurred in the relevant local currency of the operational jurisdictions.
Local currency rates for the Lesotho loti (LSL) (pegged to the South African
rand) and Botswana pula (BWP) weakened significantly against the US dollar
compared to H1 2022, which decreased the Group's US dollar reported costs and
increased local currency cash flow generation.
Exchange rates H1 2023 H1 2022 % change
LSL per US$1.00
Average exchange rate 18.21 15.41 18
Period end exchange rate 18.89 16.38 15
BWP per US$1.00
Average exchange rate 13.20 11.79 12
Period end exchange rate 13.52 12.40 9
GBP per US$1.00
Average exchange rate 0.81 0.77 5
Period end exchange rate 0.79 0.82 (4)
FINANCIAL POSITION
The LSL closed 11% weaker against the US dollar at the end of the Period
compared to 31 December 2022. This resulted in a decrease in the US dollar
reported values in the Interim Consolidated Statement of Financial Position.
Selected totals of the Interim Consolidated Statement of Financial Position
and key asset drivers are tabled below.
US$ million H1 2023 FY 2022 % Variance
Non-current assets 293.7 320.0
Current assets 44.4 46.3
Total assets 338.1 366.3 (8)
Equity attributable to parent company 135.3 152.7
Non-controlling interest 76.0 80.4
Total equity 211.3 233.1 (9)
Non-current liabilities 105.4 110.0
Current liabilities 21.4 23.2
Total liabilities 126.8 133.2 (5)
Key asset drivers
US$ million H1 2023 H1 2022 % change
Waste cost capitalised 19.8 26.6 (25)
Waste stripping cost amortised 17.8 21.9 (19)
Depreciation and mining asset amortisation 3.3 4.3 (23)
Capital expenditure 4.6 2.4 92
Waste cost capitalised decreased due to the lower volumes of waste tonnes
mined. The waste stripping cost amortised decreased to US$17.8 million (H1
2022: US$21.9 million). Depreciation and mining asset amortisation decreased
to US$3.3 million (H1 2022: US$4.3 million).
During the Period, the majority of capital spent related to the completion of
the replacement PCA for US$2.1 million and the underground feasibility study
for US$0.9 million. Other capital projects include the resource core drilling
programme required to inform Letšeng's Resource and Reserve Statement and the
expansion of the Patiseng coarse residue storage facility.
Liquidity and solvency
The Group ended the Period with cash on hand of US$7.3 million (31 December
2022: US$8.7 million), of which US$6.2 million is attributable to Gem
Diamonds. The Group generated cash from operating activities of
US$20.1 million (H1 2022: US$30.1 million).
At Period end, the Group had utilised facilities of US$9.3 million, resulting
in a net debt position of US$2.0 million (31 December 2022: net cash of
US$3.3 million) and available facilities of US$72.9 million, comprising
US$27.0 million at Gem Diamonds and US$45.9 million at Letšeng.
The decrease in net cash was mainly due to the lower revenue generated from
rough diamond sales, coupled with high levels of inflation which negatively
impacted operating expenses. The severance packages and consulting fees paid
at Letšeng as part of the right-sizing of the operation also decreased cash
generation.
The Group has a LSL750.0 million and a US$30.0 million revolving credit
facility expiring in December 2024. Letšeng also has a LSL100.0 million
general banking facility that is reviewed annually and a ZAR136.4 million
project term loan facility for the construction of the replacement PCA. The
Group engages regularly with lenders and credit providers to ensure continued
access to funding and to manage the Group's cash flow requirements.
Summary of loan facilities as at 30 June 2023:
Company Term/description/expiry Lender Interest rate Amount Drawn down/ Available
US$ million Balance due US$ million
US$ million
Gem Diamonds Limited Three-year revolving credit facility Nedbank Facility A 30.0 3.0 27.0
(US$30 million):
Expires Standard Bank
22 December 2024
Term SOFR + 5.26% 1
Firstrand Bank
Letšeng Diamonds Three-year revolving credit facility Standard Lesotho Bank Facility B (LSL450 million): Central Bank of Lesotho rate + 3.25% 23.8 - 23.8
Expires Nedbank Lesotho
22 December 2024
First National Bank of Lesotho
Firstrand Bank
Nedbank Facility C (ZAR300 million):South African JIBAR + 3.05% 15.9 - 15.9
Letšeng Diamonds Four-and-a-half-year project facility Nedbank ZAR136 million 7.2 6.3 0.9
Expires Export Credit Insurance Corporation South African JIBAR + 2.50%
31 May 2027
Letšeng Diamonds General banking facility Nedbank ZAR100 million South African 5.3 - 5.3
Annual review in March Prime Lending Rate minus 0.70%
Total 82.2 9.3 72.9
(1)GDL RCF transitioned from LIBOR to term SOFR effective from 1 January 2023.
The margin of 5.26% includes a credit adjustment spread of 0.26% to bring term
SOFR in line with LIBOR.
Taxation
The forecast effective tax rate for the full year is 62.3% (31 December 2022:
33.8%) and has been applied to the actual results. This rate is the result of
profits generated by Letšeng being taxed at 25%, deferred tax assets not
being recognised on losses incurred in non-trading operations, and the effect
of the overseas foreign tax rate differential. The increase in the tax rate
compared to 2022 is due to the lower profits generated by Letšeng.
There has been no change to the amended tax assessment that was issued to
Letšeng by the Revenue Services Lesotho (RSL) in December 2019, contradicting
the application of certain tax treatments in the current Lesotho Income Tax
Act, 1993. There has therefore been no change in judgement applied and the
accounting treatment compared to that disclosed in the 2022 Annual Report and
Accounts.
Going concern
The projections of the Group's current and expected profitability, considering
reasonable possible changes in operations, key assumptions and inputs,
indicate that the Group will be able to operate as a going concern for the
foreseeable future. Refer to the financial statements on page 9.
PRINCIPAL RISKS AND UNCERTAINTIES
The Group's principal risks and uncertainties, both current and emerging, that
could have a material financial, operational and compliance impact on its
performance and long-term growth, are presented in the Annual Report and
Accounts for 2022 (pages 36 to 42). The Group's principal risks as presented
in the Annual Report and Accounts for 2022 remain unchanged in the medium to
long term and take into consideration current market and operational
conditions of the Group's operations and global markets. The Group's risk
management strategy aims to manage Group risk in such a way as to minimise
threats and maximise opportunities.
The assessment of emerging risks is embedded within the risk framework of the
Group. Any emerging risks identified are reported to and considered by the
Board. The potential for future carbon tax liabilities, including the Carbon
Border Adjustment Mechanism in the European Union, is being monitored through
the Group's climate change-related governance and risk management
structures.
The Group continues to monitor and manage areas of unpredictability, in
particular the immediate and evolving impact of excessive and increased power
outages and diesel consumption and the current downturn in prices being
experienced in the rough diamond market.
Clifford Elphick
Chief Executive Officer
30 August 2023
RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE HALF-YEAR REPORT
AND FINANCIAL STATEMENTS
PURSUANT TO DISCLOSURE AND TRANSPARENCY RULES (DTR) 4.2.10
The Directors confirm that, to the best of their knowledge, this condensed set
of financial statements has been prepared in accordance with IAS 34 Interim
Financial Reporting and that the Half-Year Report includes a fair review of
the information required by DTR 4.2.7R and DTR 4.2.8R, namely:
(a) an indication of important events that have occurred during the first
six months of the financial year and their impact on this condensed set of
financial statements; and
(b) material related-party transactions in the first six months of the year
and any material changes in the related-party transactions described in the
Gem Diamonds Limited Annual Report 2022.
The names and functions of the Directors of Gem Diamonds Limited are listed in
the Annual Report for the year ended 31 December 2022.
For and on behalf of the Board
Michael Michael
Chief Financial Officer
30 August 2023
INTERIM CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE SIX MONTHS ENDED 30 JUNE 2023
30 June 20231 30 June 2022*1
Notes US$'000 US$'000
Revenue from contracts with customers 4 71 763 99 951
Cost of sales (53 997) (67 430)
Gross profit 17 766 32 521
Other operating expense 5 (766) (1 059)
Royalties and selling costs (7 476) (10 781)
Corporate expenses (5 239) (5 004)
Share-based payments 17 (241) (125)
Foreign exchange gain 2 148 20
Operating profit 6 192 15 572
Net finance costs (2 246) (2 207)
- Finance income 187 73
- Finance costs (2 433) (2 280)
Profit before tax for the Period 3 946 13 365
Income tax expense 8 (2 458) (5 075)
Profit for the Period 1 488 8 290
Attributable to:
Equity holders of parent (991) 3 755
Non-controlling interests 2 479 4 535
Earnings per share (cents)
- Basic (loss)/earnings for the year attributable to ordinary equity holders (0.71) 2.68
of the parent
- Diluted (loss)/earnings for the year attributable to ordinary equity holders (0.70) 2.64
of the parent
* The prior year figures have been re-presented, as Gem Diamonds Botswana
(Proprietary) Limited (Ghaghoo Diamond Mine) ceased to be classified as a
discontinued operation at 31 December 2022. Refer Note 15, Assets held for
sale.
1 Unaudited.
INTERIM CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2023
30 June 20231 30 June 20221
US$'000 US$'000
Profit for the Period 1 488 8 290
Other comprehensive income that will be reclassified to the interim
Consolidated Statement of Profit or Loss in subsequent periods:
Exchange differences on translation of foreign operations, net of tax (23 525) (6 916)
Other comprehensive loss for the Period, net of tax (23 525) (6 916)
Total comprehensive (loss)/income for the Period (22 037) 1 374
Attributable to:
Equity holders of parent (17 611) (938)
Non-controlling interests (4 426) 2 312
1 Unaudited.
INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
30 June 20231 31 December 20222
Notes US$'000 US$'000
ASSETS
Non-current assets
Property, plant and equipment 10 269 798 293 499
Right-of-use assets 11 5 633 6 340
Intangible assets 12 10 107 11 221
Receivables and other assets 13 2 687 2 916
Deferred tax assets 5 492 5 994
293 717 319 970
Current assets
Inventories 31 425 30 370
Receivables and other assets 13 4 462 4 855
Income tax receivable 1 155 2 323
Cash and short-term deposits 14 7 322 8 721
44 364 46 269
Total assets 338 081 366 239
EQUITY AND LIABILITIES
Equity attributable to equity holders of the parent
Issued capital 16 1 411 1 410
Treasury shares 16 (1 157) (1 157)
Share premium 885 648 885 648
Other reserves (255 549) (239 169)
Accumulated losses (495 104) (494 113)
135 249 152 619
Non-controlling interests 76 002 80 428
Total equity 211 251 233 047
Non-current liabilities
Interest-bearing loans and borrowings 18 7 466 4 370
Lease liabilities 19 4 695 6 021
Trade and other payables 1 422 2 169
Provisions 14 711 15 387
Deferred tax liabilities 77 126 82 030
105 420 109 977
Current liabilities
Interest-bearing loans and borrowings 18 1 444 1 575
Lease liabilities 19 2 224 1 877
Trade and other payables 17 705 19 708
Income tax payable 37 55
21 410 23 215
Total liabilities 126 830 133 192
Total equity and liabilities 338 081 366 239
1 Unaudited.
2 Audited.
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2023
Attributable to the equity holders of the parent
Issued capital Share premium Treasury shares Other reserves1 Accumu- Total Non-controlling interests Total equity
lated (losses)/
retained earnings
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
As at 1 January 2023 1 410 885 648 (1 157) (239 169) (494 113) 152 619 80 428 233 047
Total comprehensive loss - - - (16 620) (991) (17 611) (4 426) (22 037)
Profit for the year - - - - (991) (991) 2 479 1 488
Other comprehensive loss - - - (16 620) - (16 620) (6 905) (23 525)
Share capital issued (Note16) 1 - - (1) - - - -
Share-based payments (Note 17) - - - 241 - 241 - 241
As at 30 June 2023 1 411 885 648 (1 157) (255 549) (495 104) 135 249 76 002 211 251
As at 1 January 2022 1 406 885 648 - (226 697) (500 550) 159 807 86 843 246 650
Total comprehensive (loss)/income - - - (4 693) 3 755 (938) 2 312 1 374
Profit for the year - - - - 3 755 3 755 4 535 8 290
Other comprehensive loss - - - (4 693) - (4 693) (2 223) (6 916)
Share capital issued (Note 16) 4 - - (4) - - - -
Share buyback (Note 16) - - (1 157) - - (1 157) - (1 157)
Share-based payments (Note 17) - - - 125 - 125 - 125
Dividends paid (Note 9, Note 22) - - - - (3 771) (3 771) (3 908) (7 679)
As at 30 June 2022 1 410 885 648 (1 157) (231 269) (500 566) 154 066 85 247 239 313
1 Other reserves relate to Foreign currency translation reserves and
Share-based equity reserves. Refer Note 16, Issued share capital and
reserves for further detail.
INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2023
30 June 20231 30 June 2022*1
Notes US$'000 US$'000
Cash flows from operating activities 20 076 30 095
Cash generated by operations 20.1 28 867 42 995
Working capital adjustments 20.2 (7 346) (9 841)
Interest received 125 73
Interest paid (1 547) (1 453)
Income tax paid (23) (2 940)
Income tax received - 1 261
Cash flows used in investing activities (24 309) (28 983)
Purchase of property, plant and equipment 10 (4 555) (2 376)
Waste stripping costs capitalised 10 (19 835) (26 607)
Proceeds from sale of property, plant and equipment 81 -
Cash flows used in financing activities 2 514 (8 617)
Lease liabilities repaid (950) (850)
Net financial liabilities raised 20.3 3 464 600
- Financial liabilities raised 23 600 4 298
- Financial liabilities repaid (20 136) (3 698)
Share buyback 16 - (1 157)
Dividends paid to holders of the parent - (3 302)
Dividends paid to non-controlling interests - (3 908)
Net decrease in cash and cash equivalents (1 719) (7 505)
Cash and cash equivalents at beginning of Period 8 721 31 057
Foreign exchange differences 321 639
Cash and cash equivalents at end of Period 0 7 323 24 191
Cash and cash equivalents at end of Period 14 7 322 24 145
Cash and cash equivalents at end of Period - discontinued operation - 46
* The prior year figures have been re-presented, as Gem Diamonds Botswana
(Proprietary) Limited (Ghaghoo Diamond Mine) ceased to be classified as a
discontinued operation at 31 December 2022. Refer Note 15, Assets held for
sale.
1 Unaudited.
CONDENSED NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2023
1. CORPORATE INFORMATION
1.1 Incorporation and authorisation
The holding company, Gem Diamonds Limited (the Company), was incorporated on
29 July 2005 in the British Virgin Islands (BVI) and is domiciled in the
United Kingdom (UK). The Company's registration number is 669758.
The financial information shown in this report relating to Gem Diamonds
Limited and its subsidiaries (the Group) was approved by the Board of
Directors on 30 August 2023, is not audited or reviewed by the auditor and
does not constitute statutory financial statements. The report of the auditor
on the Group's 2022 Annual Report and Accounts was unqualified.
The Group is principally engaged in operating diamond mines.
2. BASIS OF PREPARATION AND ACCOUNTING POLICIES
2.1 Basis of preparation
The condensed consolidated interim financial statements for the six months
ended 30 June 2023 (the Period) have been prepared in accordance with IAS 34
Interim Financial Reporting. The condensed consolidated interim financial
statements do not include all the information and disclosures required in the
annual financial statements and should be read in conjunction with the Group's
Annual Financial Statements for the year ended 31 December 2022. The Condensed
financial statements are unaudited and do not constitute statutory accounts as
defined in section 434 of the Companies Act, 2006. The financial information
for the year to 31 December 2022 included in this report was derived from the
statutory accounts for the year ended 31 December 2022, a copy of which has
been delivered to the Registrar of Companies. The auditor's report on these
accounts was unqualified, did not include a reference to any matters to which
the auditor drew attention by way of an emphasis of matter and did not contain
a statement under sections 498(2) or (3) of the Companies Act, 2006.
Going concern
The Group's business activities, together with the factors likely to affect
its future development, performance and position are set out on pages 1 to 3.
The financial position of the Group, its cash flows and liquidity position are
described in the Group Financial Performance on pages 4 to 7. The Group's net
debt at 30 June 2023 was US$2.0 million (31 December 2022: net cash of
US$3.3 million) and with its undrawn facilities of US$72.9 million (31
December 2022: US$82.6 million), its liquidity (defined as net cash and
undrawn facilities) of US$70.9 million (31 December 2022: US$85.9 million)
remains strong. The Group's Revolving Credit facilities, which total
US$69.7 million when fully unutilised, mature on 22 December 2024. In
addition, there is a US$5.3 million general banking facility with no set
expiry date, but is reviewed annually. For further information on these
facilities, refer Note 18, Interest-bearing loans and borrowings.
After making enquiries which include reviews of forecasts and budgets, timing
of cash flows and sensitivity analyses, and considering the continued impact
of the Russian invasion of Ukraine on consumable and commodity prices on both
the wider macro-economic environment (including demand for the Group's
products and realised prices) and the Group's operations and production
levels, the Directors have a reasonable expectation that the Group and the
Company have adequate financial resources without the use of mitigating
actions to continue in operational existence for the foreseeable future. For
this reason, the Directors continue to adopt the going concern basis in
preparing this half-year report and accounts of the Group.
2.2 Significant accounting policies
The accounting policies adopted in the preparation of the condensed
consolidated interim financial statements are consistent with those followed
in the preparation of the Group's Annual Financial Statements for the year
ended 31 December 2022.
New accounting pronouncements, principally minor amendments to existing
standards, also became effective on 1 January 2023 and have been adopted by
the Group. The adoption of these new accounting pronouncements has not had a
significant impact on the accounting policies, methods of computation or
presentation applied by the Group.
Amendments to standards
Standards, amendments, and improvements Description
IFRS 17 Insurance contracts
Amendments to IAS 8 Definition of Accounting Estimates
Amendments to IAS 1 and IFRS Practice Statement 2 Disclosure of Accounting Policies
Amendments to IAS 12 Deferred Tax related to Assets and Liabilities arising from a Single
Transaction
* Annual periods beginning on or after.
Standards issued but not yet effective
The standards, amendments and improvements that are issued, but not yet
effective, up to the date of issuance of the Group's consolidated interim
financial statements are listed in the table below. The standards, amendments
and improvements have not been early adopted and it is expected that, where
applicable, these standards and amendments will be adopted on each respective
effective date. The impact of the adoption of these standards cannot be
reasonably assessed at this stage.
Standards, amendments, and improvements Description Effective date*
Amendments to IFRS 16 Lease Liability in a Sale and Leaseback 1 January 2024
Amendments to IAS 1 Classification of Liabilities as Current or Non-current and Non-current 1 January 2024
Liabilities with Covenants
* Annual periods beginning on or after.
3. SEGMENT INFORMATION
For management purposes, the Group is organised into geographical units as its
risks and required rates of return are affected predominantly by differences
in the geographical regions of the mines and areas in which the Group operates
or areas in which operations are managed. The below measures of profit or
loss, assets and liabilities are reviewed by the
Board of Directors. The main geographical regions and the type of products and
services from which each reporting segment derives its revenue from are:
· Lesotho (diamond mining activities);
· Belgium (sales, marketing and manufacturing of diamonds);
· BVI, RSA, UK and Cyprus (technical and administrative services); and
· Botswana (diamond mining activities), ceased to be classified as a
discontinued operation held for sale at 31 December 2022. Refer Note 15,
Assets held for sale.
Management monitors the operating results of the geographical units separately
for the purpose of making decisions about resource allocation and performance
assessment.
Gem Diamonds Botswana (Proprietary) Limited (Ghaghoo Diamond Mine), which was
classified as a discontinued operation held for sale and disclosed separately
as the discontinued operation segment in prior years, has ceased to be
classified as a discontinued operation held for sale on 31 December 2022.
Refer Note 15, Assets held for sale. The 30 June 2022 comparative segment
information has been restated to re-present the previous discontinued
operation segment as the Botswana segment as part of the Group's continuing
operations.
Segment performance is evaluated based on operating profit or loss.
Intersegment transactions are entered into under normal arm's length terms in
a manner similar to transactions with third parties. Segment revenue, segment
expenses and segment results include transactions between segments. Those
transactions are eliminated on consolidation.
Segment revenue is derived from mining activities, polished diamond
manufacturing margins and diamond analysis and manufacturing services.
The following tables present revenue from contracts with customers,
profit/(loss) for the Period, EBITDA and asset and liability information from
operations regarding the Group's geographical segments:
Lesotho Belgium BVI, RSA, UK and Cyprus3 Botswana Total
Six months ended 30 June 20231 US$'000 US$'000 US$'000 US$'000 US$'000
Revenue from contracts with customers
Total revenue 70 688 72 045 3 478 - 146 211
Intersegment (70 564) (406) (3 478) - (74 448)
External customers 124 71 639 - - 71 763
Segment operating profit/(loss) 12 360 330 (5 672) (826) 6 192
Net finance costs (1 734) (12) (412) (88) (2 246)
Profit/(loss) before tax 10 626 318 (6 084) (914) 3 946
Income tax (expense)/income (2 361) 4 (101)4 - (2 458)
Profit/(loss) for the Period 8 265 322 (6 185) (914) 1 488
EBITDA 13 099 413 (5 156) - 8 356
Lesotho Belgium BVI, RSA, UK and Cyprus3 Botswana Total
US$'000 US$'000 US$'000 US$'000 US$'000
Segment assets
30 June 20231 324 773 3 090 4 061 665 332 589
31 December 20222 350 640 2 411 6 676 518 360 245
Net cash/(debt) and short-term deposits5
30 June 20231 (3 150) 1 424 (312) 60 (1 978)
31 December 20222 (2 627) 660 5 231 1 3 265
Segment liabilities
30 June 20231 40 198 1 716 4 449 3 341 49 704
31 December 20222 43 987 1 677 2 097 3 401 51 162
1 Unaudited.
2 Audited.
3 No revenue was generated in BVI and Cyprus.
4 This includes the adjustment to align the forecast effective tax rate for
the full year, to the actual results for the Period. Refer Note 8, Income tax
expense.
5 Calculated as cash and short-term deposits less drawn down bank facilities
(excluding insurance premium financing and credit underwriting fees). Refer
Note 18, Interest-bearing loans and borrowings.
Included in revenue for the Period is revenue from one customer who
individually contributed 10% or more to total revenue. This revenue in total
amounted to US$10.3 million (30 June 2022: US$12.5 million from one customer)
arising from the sales reported in the Belgium segment.
Segment assets and liabilities do not include deferred tax assets and
liabilities of US$5.5 million and US$77.1 million respectively (31 December
2022: deferred tax asset US$6.0 million, deferred tax liabilities US$82.0
million).
Total revenue for the Period is lower than that of the prior period. Although
the volume of carats sold of 52 163 carats was only 9% lower than the prior
period (57 075 carats), the $ per carat achieved of US$1 373 was 21% lower
than the prior period (US$1 745 per carat). The lower revenue is mainly
attributed to the lower number of diamonds greater than 10.8 carats recovered
during the Period, as well as a downturn in the rough diamond market
negatively impacting rough diamond prices.
Lesotho Belgium BVI, RSA, UK and Cyprus2 Botswana* Total
Six months ended 30 June 20221 US$'000 US$'000 US$'000 US$'000 US$'000
Revenue from contracts with customers
Total revenue 98 435 100 037 3 660 - 202 132
Intersegment (98 128) (393) (3 660) - (102 181)
External customers 307 99 644 - - 99 951
Segment operating profit/(loss) 21 383 635 (5 480) (966) 15 572
Net finance costs (1 506) (4) (588) (109) (2 207)
Profit/(loss) before tax 19 877 631 (6 068) (1 075) 13 365
Income tax expense (4 760) (89) (226)3 - (5 075)
Profit/(loss) for the Period 15 117 542 (6 294) (1 075) 8 290
EBITDA 24 937 830 (4 860) - 20 907
* Gem Diamonds Botswana (Proprietary) Limited (Ghaghoo Diamond Mine),
previously reported as the discontinued operation segment in prior periods,
ceased to be classified as a
discontinued operation held for sale at 31 December 2022 and the comparative
segment information has been restated to re-present the
previous discontinued operation segment as the Botswana segment. Refer
Note 15, Assets held for sale.
1 Unaudited.
2 No revenue was generated in BVI and Cyprus.
3 This includes the adjustment to align the forecast effective tax rate for
the full year, to the actual results for the Period. Refer Note 8, Income tax
expense.
30 June 20231 30 June 20221
US$'000 US$'000
4. REVENUE FROM CONTRACTS WITH CUSTOMERS
Sale of goods 71 638 99 627
Partnership arrangements 125 306
Rendering of services - 18
71 763 99 951
1 Unaudited.
The revenue from the sale of goods mainly represents the sale of rough
diamonds, for which revenue is recognised at the point in time at which
control transfers.
The revenue from partnership arrangements of US$0.1 million (2022:
US$0.3 million) represents the additional uplift from partnership
arrangements for which revenue is recognised when the significant constraints
are lifted or resolved and the amount of revenue is guaranteed. At Period end
2 082 carats (2022: 527 carats) have significant constraints in recognising
revenue relating to the additional uplift.
No revenue was generated from joint operation arrangements during the current
or prior period.
30 June 20231 30 June 2022*1
US$'000 US$'000
5. OTHER OPERATING EXPENSES
Sundry income/(expense) 61 (93)
Ghaghoo care and maintenance costs (906) (966)
Profit on disposal and scrapping of property, plant and equipment 79 -
(766) (1 059)
* The prior year figures have been re-presented, as Gem Diamonds Botswana
(Proprietary) Limited (Ghaghoo Diamond Mine) ceased to be classified as a
discontinued operation at 31 December 2022. Refer Note 15, Assets held for
sale.
1 Unaudited.
6. UNDERLYING EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND MINING ASSET
AMORTISATION (UNDERLYING EBITDA)
Underlying EBITDA is shown, as the Directors consider this measure to be a
relevant guide to the operational performance of the Group and excludes such
non-operating costs and income as listed below. The reconciliation from
operating profit to underlying EBITDA is as follows:
30 June 20231 30 June 2022*1
US$'000 US$'000
Operating profit 6 192 15 572
Other operating expenses 764 966
Foreign exchange gain (2 148) (20)
Share-based payments 241 125
Depreciation and amortisation (excluding waste stripping cost amortised) 3 307 4 264
Underlying EBITDA 8 356 20 907
* The prior year figures have been re-presented, as Gem Diamonds Botswana
(Proprietary) Limited (Ghaghoo Diamond Mine) ceased to be classified as a
discontinued operation at 31 December 2022. Refer Note 15, Assets held for
sale.
1 Unaudited.
7. SEASONALITY OF OPERATIONS
The Group's sales environment with regard to its diamond sales is not
materially impacted by seasonal and cyclical fluctuations. The mining
operations may be impacted by seasonal weather conditions. Appropriate mine
planning and ore stockpile build-up ensures that operations can continue
during adverse weather conditions.
30 June 20231 30 June 20221
US$'000 US$'000
8. INCOME TAX EXPENSE
Current
- Foreign (978) (3 940)
Withholding tax
- Foreign 596 2 (550)
Deferred
- Foreign (2 076) (585)
Income tax expense (2 458) (5 075)
1 Unaudited.
2 This relates to a refund due to Gem Diamonds Limited from Revenue Services
Lesotho for withholding tax overpaid on dividends in prior periods, following
an amendment to the Double Tax Agreement between the United Kingdom and the
Kingdom of Lesotho. The receivable has been recognised as part of Other
Receivables. Refer Note 13, Receivables and other assets.
The forecast effective tax rate for the full year is 62.3% (31 December 2022:
33.8%) and has been applied to the actual results.
The effective tax rate is above the Lesotho statutory tax rate of 25%
primarily as a result of deferred tax assets not recognised on losses incurred
in non-trading operations and the effect of the overseas foreign tax rate
differential. The increase in the tax rate compared to 2022 is due to the
lower profits generated by Letšeng.
30 June 20231 30 June 20221
US$'000 US$'000
9. DIVIDENDS PAID
Dividends on ordinary shares declared and paid
Final ordinary cash dividend for 2022: nil (2021: 2.7 US cents per share) - 3 771
There was no dividend proposed on the 2022 full-year results or paid during
the current Period.
The Directors intend on applying a similar dividend policy in the current year
on the 2023 full year results as has been adopted previously. The dividend
policy is dependent on the results of the Group's operations, its financial
position, cash requirements, future prospects, profits available for
distribution and other factors deemed to be relevant at that time.
10. PROPERTY, PLANT AND EQUIPMENT
During the Period, the Group invested US$4.6 million (30 June 2022:
US$2.4 million) into property, plant and equipment, of which US$4.5 million
(30 June 2022: US$2.3 million) related to Letšeng.
Letšeng's capital spend was incurred mainly on the completion of the
construction of the PCA of US$2.1 million (30 June 2022: US$1.9 million) and
the Underground Feasibility Study of US$0.9 million.
Letšeng further invested US$19.8 million (30 June 2022: US$26.6 million) in
deferred stripping costs which were capitalised. Amortisation of the deferred
stripping asset (waste stripping cost amortisation) of US$17.8 million (30
June 2022: US$21.9 million) was charged to the Interim Consolidated Statement
of Profit or Loss during the Period. The amortisation is directly related to
the areas that were mined during the Period and their associated waste to ore
strip ratios.
Depreciation and amortisation of US$2.4 million (30 June 2022: US$3.4 million)
was charged to the Interim Consolidated Statement of Profit or Loss during the
Period.
In addition to the above, foreign exchange movements on translation affecting
property, plant and equipment decreased the asset balances by US$27.9 million
(30 June 2022: US$7.5 million decrease).
Right-of-use assets
Plant and equipment Motor vehicles Buildings Total
US$'000 US$'000 US$'000 US$'000
11. RIGHT-OF-USE ASSETS
As at 30 June 20231
Cost
As at 1 January 2023 3 190 421 6 430 10 041
Additions 420 515 122 1 057
Derecognition of lease - (526) (225) (751)
Foreign exchange differences (332) (41) (455) (828)
As at 30 June 20231 3 278 369 5 872 9 519
Accumulated depreciation
As at 1 January 2023 688 115 2 898 3 701
Charge for the year 346 40 480 866
Derecognition of lease - (98) (225) (323)
Foreign exchange differences (81) (10) (267) (358)
As at 30 June 20231 953 47 2 886 3 886
Net book value at 30 June 20231 2 325 322 2 986 5 633
As at 31 December 20222
Cost
As at 1 January 2022 56 94 5 761 5 911
Additions 3 259 384 1 644 5 287
Derecognition of lease (27) (38) (672) (737)
Foreign exchange differences (98) (19) (303) (420)
As at 31 December 20222 3 190 421 6 430 10 041
Accumulated depreciation
As at 1 January 2022 20 63 2 691 2 774
Charge for the year 695 96 1 027 1 818
Derecognition of lease (24) (38) (672) (734)
Foreign exchange differences (3) (6) (148) (157)
As at 31 December 20222 688 115 2 898 3 701
Net book value at 31 December 20222 2 502 306 3 532 6 340
1 Unaudited.
2 Audited.
Plant and equipment mainly comprise back-up power generating equipment
utilised at Letšeng. Motor vehicles mainly comprise vehicles utilised by
contractors at Letšeng. Buildings comprise office buildings in Maseru,
Antwerp, London, Gaborone and Johannesburg.
Right-of-use assets are depreciated on a straight-line basis over the shorter
of the estimated useful life and the lease term.
During the Period, Gem Diamonds Limited entered into a new contract for the
rental of its London office space as the original lease came to an end. At
Letšeng, the lease contract for blasting services was renegotiated resulting
in the recognition of new associated right-of-use assets and lease
liabilities. The original contract was cancelled and all associated assets and
liabilities were derecognised. Furthermore, a new contract for the rental of
earth-moving
equipment was entered into. The contract was assessed as containing a lease
resulting in the recognition of the new associated right-of-use assets and
lease liabilities. Refer Note 19, Lease liabilities.
Total gains of US$22.9 thousand (30 June 2022: nil) relating to the
derecognition of leases in the Group have been recognised in the Interim
Consolidated Statement of Profit or Loss. Refer Note 19, Lease liabilities and
Note 20.1, Cash generated by operations. During the Period the Group
recognised income of US$0.2 million (30 June 2022: US$0.2 million) from the
sub-leasing of office buildings in Maseru. The Group expects to receive the
following lease payments from the operating sub-leasing in the following
years:
US$ '000
1 July 2023 - 30 June 2024 343
1 July 2024 - 30 June 2025 206
Goodwill1
US$'000
12. INTANGIBLE ASSETS
As at 30 June 20232
Cost
Balance at 1 January 2023 11 221
Foreign exchange translation difference (1 114)
Balance at 30 June 20232 10 107
Accumulated amortisation
Balance at 1 January 2023 -
Amortisation -
Balance at 30 June 20232 -
Net book value at 30 June 20232 10 107
As at 31 December 20223
Cost
Balance at 1 January 2022 11 962
Foreign exchange translation difference (741)
Balance at 31 December 20223 11 221
Accumulated amortisation
Balance at 1 January 2022 -
Amortisation -
Balance at 31 December 20223 -
Net book value at 31 December 20223 11 221
1 Goodwill allocated to Letšeng Diamonds.
2 Unaudited.
3 Audited.
30 June 20231 31 December 20222
US$'000 US$'000
13. RECEIVABLES AND OTHER ASSETS
Non-current
Deposits 87 96
Insurance asset 2 600 2 820
2 687 2 916
Current
Trade receivables 27 23
Prepayments 314 1 350
Deposits 24 21
Other receivables3 1 826 249
Vat receivable 2 271 3 212
4 462 4 855
The carrying amounts above approximate their fair value due to the nature of
the instruments.
Analysis of trade receivables based on their terms and conditions
Neither past due nor impaired 4 -
Past due but not impaired:
Less than 30 days - -
30 to 60 days - -
60 to 90 days - -
90 to 120 days - -
> 120 days 23 23
27 23
1 Unaudited.
2 Audited.
3 Other receivables includes US$1.0 million relating to insurance proceeds
receivable from the settlement of the previously identified diesel theft at
Letšeng. These proceeds were received in August 2023.
Based on the nature of the Group's client base and the negligible exposure to
credit risk through its client base, insurance asset and other financial
assets, the expected credit loss is insignificant and has no impact on the
Group.
30 June 20231 31 December 20222
US$'000 US$'000
14. CASH AND SHORT-TERM DEPOSITS
Cash on hand 5 4
Bank balances 4 132 6 006
Short term bank deposits 3 185 2 711
7 322 8 721
1 Unaudited.
2 Audited.
The amounts reflected in the financial statements approximate fair value due
to the short-term maturity and nature of cash and short-term deposits.
Cash at banks earn interest at floating rates based on daily bank deposit
rates. Short-term deposits are generally call deposit accounts and earn
interest at the respective short-term deposit rates.
The Group's cash surpluses are deposited with major financial institutions of
high-quality credit standing predominantly within Lesotho and the United
Kingdom.
At 30 June 2023, the Group had US$72.9 million (31 December 2022: US$82.6
million) of undrawn facilities, representing the LSL750.0 million (US$39.7
million) three-year secured revolving working capital facility at Letšeng,
the Letšeng ZAR100.0 million (US$5.3 million) general banking facility, the
available portion of the PCA project debt facility of ZAR17.4 million (US$0.9
million) and US$27.0 million from the Company's secured revolving credit
facility. For further details on these facilities, refer Note 18,
Interest-bearing loans and borrowings.
15. ASSETS HELD FOR SALE
Since 2019, in line with the strategic objective to dispose of non-core
assets, the Board of Directors and Management have remained committed to the
sale of Gem Diamonds Botswana (Pty) Ltd (GDB), which owns the Ghaghoo Diamond
Mine. During the previous period, GDB continued to be disclosed as a
discontinued operation held for sale. At the end of the previous year,
31 December 2022, GDB ceased to be classified as a discontinued operation
held for sale based on there not being a sales agreement in place and
therefore the prospects of a sale not being highly probable. GDB was therefore
re-presented to be reflected as part of continuing operations, and continued
to be disclosed as such during the Period. All impacted prior year figures in
the interim consolidated statement of profit or loss and relevant notes have
been re-presented to reflect GDB as part of continuing operations.
The table below represents the prior year re-presentation for all amounts in
the Interim consolidated statement of profit or loss and notes thereto which
were re-presented.
As previously reported Re-presentation adjustment Re-presented figures
30 June 2022 30 June 2022 30 June 2022
US$'000 US$'000 US$'000
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
CONTINUING OPERATIONS
Other operating expense (93) (966) (1 059)
Operating profit 16 538 (966) 15 572
Net finance costs (2 098) (109) (2 207)
- Finance costs (2 171) (109) (2 280)
Profit before tax for the Period 14 440 (1 075) 13 365
Profit after tax for the Period 9 365 (1 075) 8 290
DISCONTINUED OPERATION
Loss after tax for the Period from discontinued operation (1 075) 1 075 -
Earnings per share (cents) for continuing operations
- Basic earnings for the year attributable to ordinary equity holders of the 3.44 (0.76) 2.68
parent
- Diluted earnings for the year attributable to ordinary equity holders of the 3.40 (0.76) 2.64
parent
0 OTHER OPERATING EXPENSES
Ghaghoo care and maintenance costs - (966) (966)
0 UNDERLYING EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND MINING ASSET
AMORTISATION (UNDERLYING EBITDA) BEFORE DISCONTINUED OPERATION
Operating profit 16 538 (966) 15 572
Other operating expenses - 966 966
16. ISSUED SHARE CAPITAL AND RESERVES
30 June 20231 31 December 20222
Number US$'000 Number US$'000
of shares of shares
'000 '000
Authorised - ordinary shares of US$0.01 each
As at Period/Year end 200 000 2 000 200 000 2 000
Issued and fully paid balance at beginning of Period/Year 139 403 1 410 140 515 1 406
Allotments during the Period/Year 149 1 408 4
Number of ordinary shares outstanding at end of Period/Year 139 552 1 411 140 923 1 410
Treasury shares3 (1 520) (1 157) (1 520) (1 157)
Balance at end of Period/Year 138 032 254 139 403 253
1 Unaudited.
2 Audited.
3 Shares repurchased by Gem Diamonds in the
prior period.
Treasury shares
During the previous period, the Board of Directors approved a share buyback
programme to purchase up to US$2.0 million of the Company's ordinary shares.
The sole purpose of the programme was to reduce the capital of the Company and
the Company intends to hold those ordinary shares purchased under the
programme in treasury. Such treasury shares are not entitled to dividends and
have no voting rights. The share buyback programme was initiated on 12 April
2022 and at 30 June 2022, 1 520 170 shares were bought back at a weighted
average price of 60.05 GB pence, totalling US$1.2 million (including
transaction costs). This reduction in shares issued is taken into account in
calculating the earnings per share. No further share buyback has taken place
during the Period.
17. SHARE-BASED PAYMENTS
Employee Share Option Plan 2017 Award (ESOP) - 21 April 2023 award
On 21 April 2023, 250 860 nil-cost options were granted to certain key
employees under the ESOP of the Company. The value of the award was determined
based on the Group performance for the prior 2022 financial year. The vesting
of the options will be subject to the satisfaction of certain service
conditions which are classified as non-market conditions. The award is subject
to malus and clawback conditions in line with the Group's ESOP.
In addition, 809 195 nil-cost options were granted to certain Executive
employees and the Executive Directors on the same terms as detailed above.
These options were granted in line with the introduction of the Gem Diamonds
Incentive Plan (GDIP) in 2021, which integrates annual bonus awards with
awards under the ESOP. These options are also subject to a two-year holding
period after the vesting date.
All the options vest over a three-year period in tranches of 1/3 commencing on
21 April 2024 and ending on 21 April 2026. The options are exercisable between
the respective vesting dates and 20 April 2033. If the service conditions are
not met, unvested options lapse. The fair value of the award is based on the
observable Gem Diamonds Limited share price on the date of the award with no
adjustments made to the price. The Company's share price on the date of the
award was £0.27 (US$0.34). The option grants are settled by issuing shares.
The expense disclosed in the Interim Consolidated Statement of Profit or Loss
is made up as follows:
30 June 20231 30 June 20221
US$'000 US$'000
The expense recognised for employee services received during the Period is
shown in the following table:
Equity-settled share-based payment transactions charged to the statement of 241 125
profit or loss
1 Unaudited.
18. INTEREST-BEARING LOANS AND BORROWINGS
The interest-bearing loans and borrowings subject to the US$ three-month LIBOR
rate transitioned to a Secured Overnight Financing Rate (SOFR) effective from
1 January 2023, in line with the IBOR phase 2 Amendments which became
effective in 2021. The South African JIBAR rates are yet to transition to
alternative benchmark rates at the reporting period end. The Group will
continue to assess the impact of the interest rate benchmark reform on the
Group's JIBAR interest-bearing loans and borrowings as the revised benchmark
rates are published or negotiated with the funders. The developments on these
facilities from 1 January 2023 and their carrying amounts and maturities as at
30 June 2023 are disclosed in the note below.
Effective interest rate Maturity 30 June 20231 31 December 20222
US$'000 US$'000
Non-current
LSL450.0 million and ZAR300.0 million bank loan facility Central Bank of Lesotho rate + 3.25% and South African JIBAR + 3.05% - -
Credit underwriting fees 22 December 2024 (220) (327)
US$30.0 million bank loan facility Term SOFR + 5.26%3 3 000 -
Credit underwriting fees 22 December 2024 (169) (225)
LSL136.4 million project debt facility South African JIBAR + 2.50% 31 May 2027 4 855 4 922
7 466 4 370
Current
ZAR2.5 million insurance premium finance 3.55% 1 April 2023 - 60
LSL30.0 million insurance premium finance 3.55% 1 April 2023 - 719
LSL10.9 million insurance premium finance 3.55% 1 May 2023 - 262
LSL136.4 million project debt facility South African JIBAR + 2.50% 31 May 2027 1 444 534
1 444 1 575
1 Unaudited.
2 Audited.
3 GDL RCF transitioned from LIBOR to term SOFR effective from 1 January 2023.
The margin of 5.26% includes a credit adjustment spread of 0.26% to bring term
SOFR in line with LIBOR.
LSL450.0 million and ZAR300.0 million (US$39.7 million) bank loan facility at
Letšeng Diamonds
The Group, through its subsidiary Letšeng Diamonds, has a LSL450.0 million
and ZAR300.0 million (US$39.7 million) three-year revolving credit facility
jointly with Nedbank Lesotho Limited, Standard Lesotho Bank Limited, First
National Bank of Lesotho Limited, Firstrand Bank Limited (acting through its
Rand Merchant Bank division) and Nedbank Limited (acting through its Nedbank
Corporate and Investment Banking division).
The facility is secured and expires on 22 December 2024 and has a 24-month
renewal option. The LSL450.0 million facility is subject to interest at the
Central Bank of Lesotho rate plus 3.25% and the ZAR300.0 million facility is
subject to South African JIBAR plus 3.05%. There was no draw down on this
facility at Period end.
The remaining balance of the credit underwriting fees, which were incurred and
capitalised to the Group's consolidated interest-bearing loans and borrowings
as part of the 2021 refinancing facility, is US$0.2 million (31 December 2022:
US$0.3 million). The capitalised fees are amortised and accounted for as
finance costs within profit or loss over the period of the facility.
US$30.0 million bank loan facility at Gem Diamonds Limited
This facility is a secured three-year RCF with Nedbank Limited (acting
through its London branch), Standard Bank of South Africa Limited (acting
through its Isle of Man branch) and Firstrand Bank Limited (acting through its
Rand Merchant Bank division) for US$13.5 million, US$9.0 million and US$7.5
million, respectively. All draw downs will be made in these ratios.
The facility expires on 22 December 2024 and has a 24-month renewal option.
At Period end, US$3.0 million (31 December 2022: nil) had been drawn down
resulting in US$27.0 million (31 December 2022: US$30.0 million) being
available for draw down. The remaining balance of the previously capitalised
credit underwriting fees is US$0.2 million (31 December 2022: US$0.2 million)
at Period end. The capitalised fees are amortised and accounted for as finance
costs within profit or loss over the period of the facility.
The US$-based interest rate for this facility at 30 June 2023 was 10.25% (31
December 2022: 8.7%) which comprises term SOFR plus a 0.26% credit adjustment
spread and 5.00% margin (31 December 2022: US$ three-month LIBOR plus 5.00%
margin).
Total interest for the period on this interest-bearing RCF was US$0.4 million
(31 December 2022: US$1.1 million).
LSL136.4 million (US$7.2 million) project debt facility at Letšeng Diamonds
The loan is an unsecured project debt facility which was signed jointly with
Nedbank and the ECIC on 29 November 2022 to fund the replacement of the PCA at
Letšeng. The loan is repayable in equal quarterly payments commencing in
November 2023. The outstanding balance at period end was ZAR119.0 million
(US$6.3 million) (31 December 2022: ZAR92.8 million (US$5.4 million)). This
loan expires on 27 May 2027.
The South African rand-based interest rate for the facility at 30 June 2023
was 11.00% which comprises South Africa JIBAR plus 2.50%.
Total interest for the Period on this interest-bearing loan was US$0.3 million
(31 December 2022: US$15.6 thousand). This interest is being capitalised as
part of the PCA asset.
Insurance premium finance
During the Period, all outstanding insurance premium finance balances were
fully repaid. The total interest paid during the Period relating to these
liabilities was US$15.8 thousand (31 December 2022: US$80.5 thousand).
Other facilities
Letšeng Diamonds has a ZAR100.0 million (US$5.3 million) general banking
facility with Nedbank Limited (acting through its Nedbank Corporate and
Investment Banking division) renewable annually. There was no draw down on
this facility at Period end.
The bank loan facilities include an additional US$20.0 million accordion
option for Gem Diamonds, the utilisation of which is subject to all necessary
internal credit and other approvals from all funders. There was no utilisation
of this facility at Period end.
30 June 20231 31 December 20222
US$'000 US$'000
19. LEASE LIABILITIES
Non-current 4 695 6 021
Current 2 224 1 877
Total lease liabilities 6 919 7 898
Reconciliation of movement in lease liabilities
As at 1 January 7 898 4 824
Additions 1 057 5 287
Interest expense 262 666
Lease payments (1 212) (2 512)
Derecognition of lease (451) -
Foreign exchange differences (635) (367)
As at 30 June/31 December 6 919 7 898
1 Unaudited.
2 Audited.
Lease payments comprise payments in principle of US$1.0 million (31 December
2022: US$1.8 million) and repayments of interest of US$0.2 million (31
December 2022: US$0.7 million).
During the Period, the Group recognised variable lease payments in the Interim
Consolidated Statement of Profit or Loss, for which no lease liability can be
recognised, of US$16.5 million (30 June 2022: US$21.3 million). These payments
consist of mining activities outsourced to a mining contractor, of which
US$11.9 million (30 June 2022: US$15.5 million) has been capitalised to the
Stripping Asset within Property, Plant and equipment.
30 June 20231 30 June 20221
Notes US$'000 US$'000
20. CASH FLOW NOTES
20.1 Cash generated by operations
Profit before tax for the Period 3 946 13 365
Adjustments for:
Depreciation and amortisation excluding waste stripping 2 447 3 409
Depreciation on right-of-use assets 866 905
Waste stripping cost amortised 17 787 21 880
Finance income (187) (73)
Finance costs 2 433 2 280
Unrealised foreign exchange differences (620) 431
Profit on disposal and scrapping of property, plant and equipment (79) -
Gain on derecognition of leases (23) -
Bonus, leave and severance provisions raised 2 056 673
Share-based payments 241 125
28 867 42 995
20.2 Working capital adjustment
Increase in inventory (5 086) (2 766)
Decrease/(increase) in receivables 509 (2 357)
Decrease in payables (2 769) (4 718)
(7 346) (9 841)
20.3 Cash flows from financing activities (excluding lease liabilities)
Balance at beginning of Period 5 944 11 043
Net cash used in financing activities 3 464 600
- Financial liabilities raised 23 600 4 298
- Financial liabilities repaid (20 136) (3 698)
Interest paid (1 285) (1 084)
Non-cash movements 786 1 306
- Interest accrued 1 285 1 084
- Amortisation of credit underwriting fees 133 147
- Foreign exchange differences (632) 75
Balance at Period end 8 909 11 865
1 Unaudited.
21. COMMITMENTS AND CONTINGENCIES
The Board has approved capital projects of US$5.5 million (31 December 2022:
US$14.7 million), mainly relating to some plant upgrades of US$1.6 million,
the continued residue storage facility extension and studies of US$0.9
million, and the construction of a bioremediation plant of US$0.9 million.
The Group has conducted its operations in the ordinary course of business in
accordance with its understanding and interpretation of commercial
arrangements and applicable legislation in the countries where the Group has
operations. In certain specific transactions, however, the relevant third
party or authorities could have a different interpretation of those laws and
regulations that could lead to contingencies or additional liabilities for the
Group. Having consulted professional advisers, the Group has identified
possible disputes approximating US$0.5 million (31 December 2022: US$0.3
million).
The Group monitors possible tax claims within the various jurisdictions in
which the Group operates. Management applies judgement in identifying
uncertainties over tax treatments and concluded that there were no uncertain
tax treatments during the Period. There remains a risk that further tax
liabilities may potentially arise. While it is difficult to predict the
ultimate outcome in some cases, the Group does not anticipate that there will
be any material impact on the Group's results, financial position or
liquidity.
There has been no change to the amended tax assessment that was issued to
Letšeng by the Revenue Services Lesotho (RSL) in December 2019, contradicting
the application of certain tax treatments in the current Lesotho Income Tax
Act 1993. There has therefore been no change in judgement applied and the
accounting treatment compared to that disclosed in the 2022 Annual Report and
Accounts.
22. RELATED PARTIES
Related party Relationship
Jemax Management (Proprietary) Limited Common director
Government of the Kingdom of Lesotho Non-controlling interest
30 June 20231 30 June 20221
US$'000 US$'000
Compensation to key management personnel (including Directors)
Share-based equity transactions 110 92
Short-term employee benefits 2 126 2 808
Post-employment benefits (including severance pay and pension) 160 155
2 396 3 055
Fees paid to related parties
Jemax Management (Proprietary) Limited (38) (44)
Royalties paid to related parties
Government of the Kingdom of Lesotho (6 737) (9 947)
Lease and licence payments to related parties
Government of the Kingdom of Lesotho (47) (96)
Purchases from related parties
Jemax Management (Proprietary) Limited (2) (2)
Amount included in trade payables owing to related parties
Jemax Management (Proprietary) Limited (6) (7)
Amounts owing to related party
Government of the Kingdom of Lesotho (1 244) (2 365)
Dividends declared
Government of the Kingdom of Lesotho - (3 908)
1 Unaudited.
Jemax Management (Proprietary) Limited provided administrative services with
regards to the mining activities undertaken by the Group. A controlling
interest is held by an Executive Director of the Company.
The above transactions were made on terms agreed between the parties and were
made on terms that prevail in arm's length transactions.
23. EVENTS AFTER THE REPORTING PERIOD
No other fact or circumstance has taken place between the end of the
reporting period and the approval of the financial statements which, in our
opinion, is of significance in assessing the state of the Group's affairs or
requires adjustments or disclosures.
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. END IR NKKBKPBKDBFNRecent news on Gem Diamonds
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