Gem Diamonds (GEMD) Investor update summary

Revised mine plan and operational changes

• The new mine plan for Satellite Pit Cut 6 West uses steeper slopes, reducing waste from 87.9 million tons to 21.5 million tons and saving approximately $180 million in waste stripping obligations.

• Independent technical review confirmed the viability and safety of the new slope design, with $15 million allocated for a five-tier rockfall mitigation system over five years.

• Mining fleet capital requirements are reduced from $50 million to $40 million, and peak annual waste mining drops from 21.2 million tons to 10.5 million tons.

• Ore mined increases from 71 million tons to 79 million tons, with Main Pipe ore up by 11 million tons, adding about two years of production.

• Opportunities exist to further optimize ore access, steepen kimberlite ore slopes, and upgrade inferred resources in both Satellite and Main pits.

2025 guidance and financial outlook

• Waste stripping for 2025 is guided at 5–6 million tons, with ore treated at 4.9–5 million tons, carats recovered at 84,000–88,000, and carats sold at 82,000–86,000.

• Direct cash costs are forecast at LSL 235–242 per ton, with operating costs at LSL 330–350, and mining waste cash costs at LSL 57–62 per ton.

• Capital expenditure for 2025 is set at $4–4.5 million.

• Letšeng’s revolving credit facility of M750 million (US$41.7 million) had no drawdown at end-November 2024, and the corporate office facility of US$30 million had US$6 million drawn.

• Both credit facilities have been extended by two years to December 2026, with improved covenant ratios.

Diamond market and sales update

• The diamond market faced significant pressure in 2024 due to geopolitical tensions, high interest rates, and weak luxury demand in China.

• Rough and polished diamond prices have seen slight increases recently, but De Beers has cut prices by 10–15% in some categories.

• Several Lesotho mines have reduced production or gone into care and maintenance, which may help supply-demand balance.

• Major industry players reduced production and cancelled tenders to address overstocking.

• Sales strategy shifted from open tenders to negotiated sales to avoid fire-sale prices, with a return to tenders planned when market conditions improve.