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Clifford Elphick, diamond entrepreneur
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» Kruger family to list diamond firm
» Five of the world's best diamonds
» GEM sparkler may fetch $10m
» We've been extremely fortunate. It's a fantastic jewel - Clifford Elphick, GEM
» Govt takes Letseng stake to 30%
» Elphick defends Letseng deal

GEM Diamonds switches UK listing
Allan Seccombe
Posted: Wed, 13 Dec 2006

[miningmx.com] -- GEM DIAMONDS, which operates the Letseng Diamond Mine in Lesotho, is expected to switch its planned listing to London's main board from AIM (Alternative Investment Market), a development that will delay the company's public debut by about two months.

Gem CEO Clifford Elphick told Miningmx in October that his company should list on London’s AIM during the first half of December. Gem declined to confirm or deny the speculation that the company was looking for a listing around the time of the Mining Indaba in Cape Town in first full week of February.

“We haven’t made a formal announcement about when we’ll be listing. But our last formal statement is that we didn’t anticipate any significant delay and that we were thinking about December,” Gem spokeswoman Angela Parr said.

“A lack of a significant delay would indicate that a listing might be the first quarter of 2007, but we can’t put our head on a block about this,” she said, adding Gem would release a statement on the listing in the first half of January.

Letseng produced a 603 carat diamond that sold for $10m. It is the world’s 15th largest discovered diamond. The mine, which was once owned by De Beers, is known for high quality, large diamonds. De Beers ran it for five years up to 1982 when a slump in diamond prices caused its closure.

Gem is to spend $45m on a new treatment plant to double the mine’s production capacity to 5.2 million tons/year from late 2007. The new plant clears the way to begin mining the main kimberlite pipe. Gem owns 70% of Letseng and the Lesotho government the rest.

Asked whether Gem would list on the main board or AIM, Parr said the company had not made a formal announcement on where it would list.

“If you look at the quality of the assets and the quality of management in Gem Diamonds, it’s not unreasonable to consider that we could go onto the main board. We do have assets that have a long enough lifespan to go onto the main board, but it may not be appropriate for us,” Parr said.
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“We certainly do think we’d qualify should we want to follow that route,” she said.

The shift in focus from AIM to the main board is understood to be the reason for the delayed listing because of the additional regulations that have to be met in fulfilling a main-board listing.

Elphick is the former managing director of E Oppenheimer & Son, the 40% shareholder in De Beers, the world’s largest diamond company. His management team is drawn largely from ex-De Beers employees who have expertise in both kimberlitic and alluvial diamond deposits.

The delay in the listing has caused some watchers to wonder whether there might be some difficulty in raising capital.

Parr said there were some big-hitting investors in the company such as JP Morgan, Capital Group and Black Rock, which has merged with Merrill Lynch and now has a trillion dollars worth of assets under management.

“We have a blue-chip institutional shareholder base, which we feel would be keen to follow their money. We don’t anticipate any problem in raising capital. It’s more an issue of how much capital and at what price,” she said.