[miningmx.com] – GEM Diamonds was reviewing its capital expenditure
programme in Lesotho and Botswana owing to lower prices in the diamond sector,
said Business Day citing a Gem Diamonds announcement.
Gem Diamonds is led by Clifford Elphick, who formerly ran the investment company
of the Oppenheimer family E. Oppenheimer & Co.
“Since May, the diamond market has experienced challenging conditions due to
reduced liquidity [as a result of the] continuing eurozone crisis and reduced demand
in the emerging markets,’ Gem said in an announcement.
“In light of continued economic uncertainty, the directors have initiated a review of
the company’s capital investment plans,’ Elphick said.
“The review will focus on potentially extending the period over which capital is
expended on its two development projects … in order to protect the company’s
strong balance sheet in the event of further deterioration in market conditions,’ he
said.
Gem, which is listed in London, has diamond mines in Lesotho and Australia and it is
building an underground mine in Botswana, where ground conditions have resulted
in the project falling behind schedule.
The results of the review will be released when Gem issues its interim results on
August 21, said Business Day.
Project Kholo, at the Letseng mine in Lesotho, is designed to double treatment
capacity to 10-million tonnes a year with a doubling in production to about 200,000
carats from mid-2014, said Business Day.
The Ghaghoo project in Botswana involves sinking a decline shaft through a thick
layer of sand to reach rock. A rush of sand into the decline has killed two workers.
Work will resume next month, once Gem has ensured the incident will not be
repeated, it said.
