London – Gem Diamonds Limited has announced significant operational changes in response to ongoing market headwinds, reporting a sharp decline in sales revenue and production metrics for the first half of 2025. The company, which owns 70 percent of the Letšeng mine in Lesotho, recorded weaker diamond sales, reduced ore volumes, and a notable workforce restructuring as it revised its guidance for the remainder of the year.
Performance in H1 2025
From January to June 2025, Gem Diamonds sold 44,360 carats compared with 56,944 carats in the same period last year, a 22 percent drop. Sales revenue fell even more steeply, down 43 percent to US$44.7 million from US$77.9 million in H1 2024. Average prices declined to US$1,008 per carat, a 26 percent fall from US$1,366 per carat a year earlier.
Although volumes and prices both decreased, some standout stones supported revenue. Six diamonds sold for more than US$1 million each, generating US$9.3 million. The highest price achieved was US$26,441 per carat for a 67.5 carat white diamond. Four diamonds larger than 100 carats were recovered during the period, three of which were sold. After the reporting period, a 250 carat Type II white diamond was recovered, but management cautioned that its quality is such that it will likely yield a lower-than-expected polished outcome.
Production Metrics
Waste tonnes stripped fell by nearly half to 1.7 million tonnes, while ore tonnes treated remained broadly stable at 2.5 million tonnes. Carats recovered totaled 47,125, down 16 percent from 55,873 in the prior year. Grades also declined, from 2.20 carats per hundred tonnes to 1.88 carats, reflecting lower ore quality during the period.
Cost and Operational Adjustments
In light of the weak global diamond market, compounded by US tariff uncertainty and a subdued US dollar, the company has moved to conserve cash and protect shareholder value. Cost reduction measures target savings of between US$1.4 million and US$1.6 million per month.
Mining activities will continue at current throughput levels of around 5 million tonnes per year, but waste mining volumes will be scaled back for 12 months. This reduction is not expected to compromise the longer-term life of the mine plan. An additional 0.5 million tonnes of higher-value Satellite pipe ore has also been unlocked for processing in the second half of 2025.
A major change will be workforce rationalisation. Gem Diamonds has warned that approximately 250 positions, representing around 20 percent of the workforce, could be cut. Consultations with employees and stakeholders are under way to manage the process in a transparent and responsible manner.
Further belt-tightening will come from the corporate office. Board members, executives, and senior managers will take temporary salary reductions, with the company considering issuing shares in lieu of cash to partially offset the cuts. This approach is intended to align management interests with those of shareholders.
Ghaghoo License Relinquished
The first half of the year also saw the formal handover of the Ghaghoo mine in Botswana to the government. Following the removal of the processing plant and other infrastructure, Gem Diamonds completed all agreed safety and remedial activities. With the license officially cancelled, the company has no further obligations or commitments at the site.
Revised 2025 Guidance
Given the operational changes and market conditions, Gem Diamonds has updated its guidance for the full year 2025. Waste tonnes mined are now expected to range between 1.8 and 2.0 million, down from previous guidance of 5.0 to 5.5 million. Carats recovered are forecast between 87,000 and 90,000, unchanged from original estimates. Carats sold are slightly reduced to 84,000 to 87,000 from 86,000 to 89,000.
Costs are expected to improve. Direct cash costs per tonne treated are now projected between M225 and M240, down from the earlier forecast of M245 to M260. Operating costs per tonne treated are also expected to decline to between M295 and M310, compared with earlier guidance of M345 to M360. Total capital expenditure guidance remains modest at US$4.0 to US$5.0 million.
Outlook
Despite the setbacks, Gem Diamonds reaffirmed its commitment to producing high-quality diamonds from Letšeng and expressed confidence that its cost management and operational changes would leave the company well positioned for a recovery when global conditions improve. Management stressed that it will continue to monitor markets closely and provide updates as the year progresses.
