Gem Diamonds Limited

First-half 2025 revenue was $45.5 million, down from $78 million in H1 2024, on sales of 44,360 carats at an average of $1,008 per carat versus 56,994 carats at $1,366 per carat a year earlier. EBITDA was negative $2.6 million, attributable loss was $11.7 million, and loss per share was $0.084. Operating costs were LSL 699 million versus LSL 809 million in the prior period, and total operating costs in dollar terms were $38 million versus $43.2 million. The company ended the period with cash of $6.8 million and net debt of $28.2 million, with $55.8 million of available facilities. Management reiterated the July 23 guidance, incorporating the revised short-term mine plan and the planned $1.5 million per month savings, but did not restate specific numeric full-year output or sales targets on the call.

Clifford Elphick framed the quarter as a difficult period driven by a historical low in diamond pricing and broader industry uncertainty, especially from U.S. tariffs, weak Chinese demand, and pressure across both rough and polished diamonds. He said management has been “pretty ruthless” in cutting costs, adjusting the mine plan, and protecting shareholder value, while preserving flexibility to scale back up when prices recover. His tone was defensive but confident, repeatedly saying the company is positioned for a market recovery and that Letšeng remains a high-quality asset.

Michael Michael said the main financial hit came from the weaker price environment and a mix shift toward lower-grade Main Pipe ore. He detailed $45.5 million of revenue, $1,008 per carat realized pricing, a 15% drop in cost of sales, a 22% drop in corporate costs to $3.1 million, a $1.8 million inventory provision, and a fully impaired $10.7 million goodwill balance. He also noted cash of $6.8 million, net debt of $28.2 million, and $55.8 million of available facilities, while explaining that the company drew on RCF facilities and paid about $7 million of prior-year tax and $2 million of current provisional tax.

Analysts focused on the recent uptick in the rough diamond index, the sharp share-price decline, whether management would consider delisting, and the possibility of shutting Letšeng if the market worsened. Elphick said the early price improvement in June and July was interrupted by the India tariff shock, called the share-price drop an overreaction, and said he does not believe Letšeng should be shut now because costs are currently below dollar per carat. He added that management believes the business is well positioned relative to peers, but also acknowledged that if diamond prices keep falling, there comes a point where mining at a loss would no longer make sense.