• GEM DIAMONDS
  • United Kingdom
  • Belgium
  • Lesotho
  • Botswana
  • South Africa

GEM DIAMONDS

LONDON

ANTWERP

LETŠENG

GHAGHOO

SOUTH AFRICA

Our strategy

HOW WE CREATE VALUE

(Tap a section below for more information)

Mining

Letšeng

Letšeng, our core diamond mine, is the highest achieving average US$ per carat kimberlite mine in the world. The operation is an open pit diamond mine with two kimberlite pipes, the Main pipe and the Satellite pipe which are 17.0 and 5.2 hectares respectively.

Processing

At Letšeng, ore is processed through three treatment plants with an annual throughput of 6.4 million to 6.6 million tonnes. Although Letšeng’s grade recovery is low (averaging just under two carats per hundred tonnes) it is famous for producing large, high-value diamonds.

Sales,
marketing and
manufacturing

Our diamonds produced are predominantly sold through a tender process by our sales and marketing operation in Antwerp, Belgium. Through mapping and analysis, the value of the Letšeng high-quality diamonds is determined and used to achieve the highest rough value through multiple selling channels. A selection of high-value diamonds are manufactured to capture additional value through polished sales.


Our strategy is underpinned by three key priorities which we believe will deliver maximum value for all stakeholders through our business cycle.


1.
Extracting
Maximum Value
from
Operations

Driving business optimisation

Building balance sheet strength

Exploring new sales avenues to maximise value

Record recovery of 15 diamonds > 100 carats including 910 ct Lesotho Legend
Record number of carats recovered in a single calendar year
Business Transformation (BT) target of US$100 million by 2021 on track – implemented initiatives contributing US$64 million over the four year target
Commenced mining with the aim of reducing waste stripping to significantly increase Letšeng's net present value (NPV)
Increased net cash position1 of US$1.4 million in December 2017 to US$17.5 million in December 2018
Increased customer base by 10% through additional tender viewings in Tel Aviv

  • Underlying EBITDA
  • Return on average capital employed
  • Basic earnings per share
  • Cash generated from operating activities
  • Ore tonnes treated
  • Carats recovered
  • Delivery of BT target
2.
Working
Responsibly
and Maintaining
Social
Licence

Promoting a culture of zero harm and responsible care

Delivering sustainable returns for our investors while optimising the benefit for our communities and minimising our impact on the environment

Building long-term, transparent and mutually beneficial relationships with all stakeholders


Fatality-free year
Group-wide AIFR reached historical low of 1.45
Zero major or significant community or environmental incidents
Zero major or significant incidents of health, safety and environmental legal non-compliance
CSI expenditure of US$0.8 million
Follow up organisational health index (OHI) survey conducted in Q4 2018 and the Group successfully reached its improvement target

  • LTIFR
  • AIFR
  • Fatalities

 

 


3.
Preparing
for Our
Future

Advancement of innovative technologies focusing on reducing diamond damage

Renewal of the mining lease at Letšeng

Assessing external growth opportunities

Installation of prototype high-voltage pulse generator at Letšeng which allows non-mechanical means of breaking kimberlite rock to liberate diamonds using high-voltage pulse power
Proof of concept validated for detecting diamonds within kimberlite host rock. Commenced construction of a pilot plant at Letšeng incorporating proof of concept.
Progress made on the statutory renewal process after the Prime Minister announced his Government's intention to renew the lease in April.
Progressed construction of tailings storage facility extension at Letšeng

  • Capital expenditure
  • Waste tonnes mined
  • Mining in accordance with life of mine plan

 

 


Business Transformation

By turning the spotlight on enhancing the efficiency of our operations, we are shaping our business for a profitable and sustainable future for the benefit of all our stakeholders – targeting US$100 million cumulative revenue, cost savings and productivity improvements over the next four years, to 2021.

TIME FOR CHANGE

The Group has in recent years faced short and medium-term price pressures, challenging operational conditions and increasing costs related primarily to deeper mining, increased waste and longer haul distances. These factors have placed increasing pressure on margins and cash flow, in particular over the past two years. In response, management embarked on streamlining the business in 2016 with continued cost control focus in early 2017. In February 2017, the Group identified the need for a formal business review process, For more information on the Business Transformation tracking please refer to the 2017 and 2018 Annual Report and Accounts, 2018 Half-year Report and relevent trading updates the roll-out of the Group-wide Business Transformation commenced in the second half of 2017.

A dedicated Business Transformation team, headed by the Chief Business Transformation Officer, and fully supported by the Chairman and Board of Directors, has been tasked to ensure the successful implementation and ongoing sustainability of all revenue, cost reduction and productivity improvement opportunities. These opportunities were primarily generated by the entire workforce through focused idea generation sessions to drive bottom-up innovation and ownership.

Organisational Health

The organisational health of the Group underpins the success and sustainability of the Business Transformation and through an organisational health index (OHI) survey, areas requiring improvement were identified and are being addressed. For more information on the Business Transformation tracking please refer to the 2017 and 2018 Annual Report and Accounts, 2018 Half-year Report and relevent trading updates. The Business Transformation employee recognition and reward scheme, which will be self-funded through the gains of the Business Transformation, has been developed and implemented to recognise and reward the dedication and performance of the Group’s employees in driving the Business Transformation

DELIVERING VALUE

Through a vigorous planning phase, more than 200 initiatives were initially identified, targeting cumulative cash cost savings and productivity improvements of approximately US$100 million over the next four years (net of implementation costs and fees). Thereafter, an annual run rate improvement of approximately US$30 million has been targeted from 2022 onwards compared to the 2017 cost base.

The implementation phase of the Business Transformation commenced in the fourth quarter of 2017 and has continued its momentum For more information on the Business Transformation tracking please refer to the 2017 and 2018 Annual Report and Accounts, 2018 Half-year Report and relevent trading updates.

For more information on the Business Transformation tracking please refer to the 2017 and 2018 Annual Report and Accounts, 2018 Half-year Report and relevent trading updates

DELIVERING US$100 million
(up to 2021)

DELIVERING US$30 million
(annually 2022 onwards)

 

 

 

 

Leadership

NON-EXECUTIVE DIRECTORS

HARRY KENYON-SLANEY

Non-Executive Chairman

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MICHAEL LYNCH-BELL

Senior Independent Director

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MIKE BROWN

Non-Executive Director

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JOHNNY VELLOZA

Non-Executive Director

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Harry Kenyon-Slaney

Non-Executive Chairman

BSc Geology (Southampton University), International Executive Programme (INSEAD France)

Relevant past experience

Harry Kenyon-Slaney is currently a senior adviser to McKinsey & Co and has over 33 years’ experience in the mining industry, principally with Rio Tinto. He is a Geologist by training and his experience spans operations, marketing, projects, finance and business development. He has worked in South Africa, Australia and the UK. Harry is also a member of the Boards of Directors of Petropavlovsk plc and Schenck Process AG, an independent non-Executive Director of Sibanye Gold Limited and a non-Executive Director of several private companies. Until 2015, Harry was a member of the Group Executive Committee of Rio Tinto where he held the roles of CEO of Energy, and before that CEO of Diamonds and Minerals. Prior to this he variously led Rio Tinto’s global titanium dioxide business, was CEO of Rio Tinto’s listed subsidiary, Energy Resources of Australia Limited, was GM operations at Palabora Mining Company in South Africa and held senior marketing roles in copper, uranium and industrial minerals. He began his career as an underground Geologist with Anglo American on the gold mines in South Africa.

Appointed

Harry was appointed as Chairman of the Board in June 2017.

Key skills and experience

Commercial and capital markets. Public company board governance and government stakeholder engagement.

Board committee membership

Chairman of the Nominations Committee and a member of the Remuneration, Audit and HSSE Committees.

 

Michael Lynch-Bell

Senior Independent Director

BA Hons (Economics and Accountancy) (University of Sheffield); FCA of the ICAEW

Relevant past experience

Michael spent a 38-year career with Ernst & Young (EY) having led its Global Oil and Gas, UK IPO and Global Oil and Gas and Mining transaction advisory practices. He was a member of the assurance practice from 1974 to 1996 when he transferred to the transaction advisory practice. He was also UK Alumni sponsor and a member of the firm’s EMEIA and Global Advisory Councils. He retired from EY as a partner in 2012 and continued as a consultant to the firm until November 2013. Michael is currently Deputy Chair and Senior Independent non-Executive Director at Kaz Minerals Plc, Chair of Seven Energy International, Chair of the Audit Committee of Lenta Limited and non-Executive Director of Barloworld Limited. Michael is also a Director of Little Green Pharma Ltd and Little Green Pharma AG – both private companies

Appointed

Michael joined the Board in December 2015 and was appointed Senior Independent Director in November 2017.

Key skills and experience

Finance and capital markets; Oil and gas; Mining and metals.

Board committee membership

Chairman of the Audit and Remuneration Committees and a member of the Nomination and HSSE Committees.

 

Mike Brown

Non-Executive Director

B.Sc.Eng. Mining PR Eng (ECSA) Engineering (University of Witswatersrand), Strategic Executive Programme (London Business School)

Relevant past experience

Mike has over 35 years’ experience in the resources industry in operational, senior management, and director roles. He spent six years in Switzerland as the Managing Director Technical at Pala where he oversaw all technical aspects of the investments, including the risks associated with resource performance, project management, ramp up, operations, and the associated working capital and financial controls. Prior to joining Pala, Mike spent 21 years with De Beers in Southern Africa in various roles culminating in the post of Chief Operating Officer where he was accountable for five operating mines, including greenfield and brownfield growth projects. He also managed the restructuring at De Beers Consolidated Mines (DBCM) in 2005/2006 and again in 2009. Mike has overseen growth projects and building of mines in Namibia, South Africa, Sierra Leone, Vietnam and USA. Mike is currently a non-Executive director of Nevada Copper.

Appointed

Mike joined the Board in January 2018.

Key skills and experience

Operational, resource performance, project growth and finance

Board committee membership

Chairman of the HSSE Committee, member of the Audit, Remuneration and Nomination Committees

 

Johnny Velloza

Non-Executive Director

BSc Mining & Mineral Engineering (University of Johannesburg); BSc Business/Commerce General (University of South Africa)

Relevant past experience

Johnny is a mining engineer with broad mining experience in both open pit and underground operations across Southern and East Africa, Chile and Australia. Johnny has worked in a number of different commodities including iron ore, copper, gold and diamonds. Johnny has held senior operational management roles in large mining companies, including De Beers, AngloGold Ashanti and BHP Billiton. Since starting his career twenty-five years ago Johnny has gained experience in exploration, feasibility studies, opening new mines and running mines. Johnny left his executive role with Gem Diamonds in September 2018 to take up the role of CEO in a copper/cobalt company in the DRC. Johnny is a non-Executive Director at Zanaga iron ore Limited - a company listed on the AIM market.

Appointed

Johnny joined Gem Diamonds as Chief Operating Officer in May 2016 and was appointed to the Board as an Executive Director in July 2018. Johnny resigned as Chief Operating Officer in September 2018 and was appointed to the Board as a non-Executive Director on 16 September 2018.

Key skills and experience

Mining industry; Operations; Commercial

Board committee membership

HSSE Committee.

EXECUTIVE DIRECTORS

CLIFFORD ELPHICK

Chief Executive Officer

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MICHAEL MICHAEL

Chief Financial Officer

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Clifford Elphick

Chief Executive Officer

BCom (University of Cape Town); BCompt Hons (University of South Africa)

Relevant past experience

Clifford joined Anglo American Corporation in 1986 and was seconded to E. Oppenheimer and Son as Harry Oppenheimer’s personal assistant in 1988. In 1990, he was appointed Managing Director of E. Oppenheimer and Son, a position he held until leaving in December 2004. During that time, Clifford was also a Director of Central Holdings, Anglo American and DB Investments. Following the privatisation of De Beers in 2000, Clifford served on the De Beers Executive Committee. Clifford is also the non-Executive Chairman of Zanaga Iron Ore Co. Limited.

Appointed

Clifford founded Gem Diamonds in July 2005.

Key skills and experience

Diamond and mining industries; Commercial and capital markets.

Board committee membership

Nominations Committee.

 

Michael Michael

Chief Financial Officer

BCom Hons (Rand Afrikaans University); CA(SA)

Relevant past experience

Michael has over 20 years’ experience in financial management. He joined RSM Betty & Dickson, an audit firm in Johannesburg, South Africa in January 1993 and became Audit Partner at the firm in March 2000. From August 2006 to February 2008 Michael was seconded to Gem Diamonds to assist with the financial aspects of the Main London Listing including the financial reporting, management accounting and tax relating to the IPO. In March 2008 Michael joined Gem Diamonds on a full-time basis.

Appointed

Michael joined Gem Diamonds in March 2008 and was appointed to the Board in April 2013.

Key skills and experience

Finance and capital markets; Diamond industry.

EXECUTIVE MANAGEMENT

GLENN TURNER

Chief Legal and Commercial Officer
and Company Secretary

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BRANDON DE BRUIN

Chief Business Transformation
Officer

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Glenn Turner

Chief Legal and Commercial Officer and Company Secretary

BA LLB (University of Cape Town); LL M (Cantab)

Relevant past experience

Glenn was called to the Johannesburg Bar in 1987 where he spent 14 years practising as an advocate specialising in general commercial and competition law, and took silk in 2002. Glenn was appointed De Beers’ first General Counsel in 2002 and was also a member of the Executive Committee. Glenn was responsible for a number of key initiatives during his tenure, including overseeing De Beers’ re-entry into the USA.

Appointed

Glenn joined Gem Diamonds in May 2006 and served on the Board from April 2008 to November 2017. Glenn was appointed as the Company Secretary in January 2015

Key skills and experience

Diamond industry; Legal.

Board committee membership

HSSE Committee.

 

Brandon de Bruin

Chief Business Transformation Officer

BCom LLB (University of the Witwatersrand); Qualified attorney in South Africa and solicitor in England and Wales

Relevant past experience

Brandon joined Gem Diamonds from Clifford Chance LLP, he specialised in Debt and Equity Capital Markets and Corporate Finance. Brandon gained extensive commercial and legal experience in international corporate and finance transactions working for clients such as Citigroup, UBS, JPMorgan, ABN Amro, Bank of America, Lehman Brothers and Morgan Stanley. He also gained valuable experience in stock exchange listings, rules and regulations in London, Luxembourg and New York.

Appointed

Joined Gem Diamonds in August 2007 – New Business; appointed as Sales and Marketing Executive in July 2013 – 2017; appointed as Chief Business Transformation Officer in 2017.

Key skills and experience

Diamond industry, sales and marketing, commercial and legal, debt and equity capital markets.