REG - Gem Diamonds Limited - Letšeng Load and Haul Contract

Gem DiamondsAnnouncement

15/11/2023 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20231115:nRSO4434Ta&default-theme=true

RNS Number : 4434T  Gem Diamonds Limited  15 November 2023

15 November 2023

GEM DIAMONDS LIMITED

 

("Gem Diamonds" or "the Company")

 

Letšeng Load and Haul Contract

 

Gem Diamonds Limited (LSE: GEMD), is pleased to announce that its 70% owned
subsidiary, Letšeng Diamonds (Proprietary) Limited ("Letšeng"), has reached
agreement with Matekane Mining Investment Company (Proprietary) Limited
("MMIC") in respect of its load and haul contract with Letšeng ("Load and
Haul Contract"). MMIC is the provider of load and haul services to the
Letšeng mine. As previously disclosed, Letšeng had been considering its
options in respect of the contract following the election of Mr Sam Matekane
(the ultimate owner of MMIC) as Prime Minister of Lesotho in October 2022, who
is therefore designated a Politically Exposed Person.

 

Having carefully considered all options, Letšeng has reached agreement with
MMIC to terminate the Load and Haul Contract with effect from 1 December 2023,
eleven months ahead of its scheduled contractual end date, and will instead
insource the load and haul activities. To this end, Letšeng will acquire the
mining equipment at Letšeng from MMIC that is currently used exclusively for
Letšeng, and will offer employment to MMIC employees who are currently
working exclusively for Letšeng, in line with operational requirements. This
will enable Letšeng to continue seamlessly with its mining activities.

 

The consideration has been based on independent third party valuation experts
and will be funded via a combination of asset-based financing and available
cash. This transaction is expected to lead to further efficiencies and
operational cost reductions at Letšeng.

 

Commenting on the acquisition, Clifford Elphick, Gem Diamonds' Chief Executive
Officer, said:

"This transaction brings a long standing and successful business relationship
we've enjoyed with MMIC, since 2005, to an end. The transaction resolves
important issues relating to governance and conflicts; and will lead to
operational efficiencies and cost reductions being achieved."

 

The Gem Diamonds Limited LEI number is 213800RC2PGGMZQG8L67.

 

For further information:

 

Gem Diamonds

Kiki Constantopoulos, Company Secretary

ir@gemdiamonds.com (mailto:ir@gemdiamonds.com)

 

 

Celicourt Communications

Mark Antelme/Felicity Winkles

Tel: +44 (0)  (tel:+44%20207%20520%209261) 20 7770 6424
(tel:+44%20207%20520%209261)

 

About Gem Diamonds:

Gem Diamonds is a leading global diamond producer of large high value
diamonds. The Company owns 70% of the Letšeng mine in Lesotho and 100% share
of the Ghaghoo mine in Botswana. The Letšeng mine is famous for the
production of large, exceptional white diamonds, making it the highest dollar
per carat kimberlite diamond mine in the world.  www.gemdiamonds.com
(http://www.gemdiamonds.com)

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  CNTUSONROBUAAAA