Gem mulls Ghaghoo buyout offer; H1 revenues decrease
JOHANNESBURG (miningweekly.com) – LSE-listed Gem Diamonds, which on Thursday reported lower revenue and earnings for the six months to June 30, is considering an offer from an undisclosed party that is interested in buying its Ghaghoo mine, in Botswana, which was placed on care and maintenance earlier this year.
The company in February announced that it would halt operations at the mine with immediate effect owing to the weak state of the diamond market for the category of diamonds produced at Ghaghoo.
Meanwhile, revenue for the six months under review decreased to $92.9-million, compared with $109.1-million for the six months to June 30, 2016.
Underlying earnings before interest, taxes, depreciation and amortisation also decreased to $13-million in the period under review, compared with $43.5-million in the prior comparable period.
Attributable net profit before exceptional items declined to $49 000, compared with $13.4-million in the first half of 2016.
Gem Diamonds, which also operates the Letšeng mine produced 50 478 ct of diamonds in the six months to June 30, compared with 57 380 ct in the prior comparable period.
“The updated life-of-mine plan [at Letšeng] was implemented during the period, with the objective of reducing waste tonnes mined and improving near-term cash flows, and mining progressed well against this plan during the period.
“The cost reduction and transformation programme is firmly under way and, at this early stage, $15-million of annualised efficiency and cost reduction initiatives have already been identified for implementation from October,” commented CEO Clifford Elphick.
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