Gem Diamonds reports annual results

2007 was Gem Diamonds first financial year as a listed company. The Company’s focus for the year was the execution of its acquisition strategy outlined at the time of its IPO as well as the development of existing assets to increase production. During the year capital raised on IPO was deployed on acquisitions in Australia, Botswana, DRC and Indonesia which are all now under Gem Diamonds’ control.

The Letšeng Mine’s processing capacity was increased with the construction of its second plant and early stage operations in central Africa were progressed. Sales in Q108 of rough and polished diamonds from Letšeng, Cempaka and Ellendale diamonds have all shown strong price increases.

HIGHLIGHTS
- Global diamond mining company with assets in seven countries
- Listed on LSE in February 2007 raising US$636 million
- Revenue of US$153 million
- EBITDA of US$74 million
- Targeted acquisition strategy successfully pursued
- Diversified diamond resource with in situ value of US$11.4 billion
- Three producing operations with circa 750 000 carats expected for 2008
- Positive results from diamond beneficiation trials

Commenting on these results, G em Diamonds CEO, Clifford Elphick said, the past year has seen Gem Diamonds achieve many of the milestones outlined at the time of its IPO. These strong financial results demonstrate the merit of the Company’s strategy to focus on the top end of the diamond market. A sector that continues to show remarkable price increases in line with strong demand fundamentals.

Gem Diamonds enters 2008 with three producing mines situated in different countries, all of which are in expansion mode and producing diamonds that continue to achieve extraordinary prices. Development projects throughout Africa provide an opportunity to more than double the current production levels.

Whilst the current US economic climate presents a challenge, opportunities abound throughout the diamond value chain to deliver returns to our shareholders. Our outlook remains extremely positive.

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