Please reflect on Gem Diamonds’ sustainability performance in 2024

Despite the ongoing challenges facing the diamond market in 2024, the unwavering discipline shown by our operational and management teams in embedding sustainability into our core operations was central to our resilience. The synergy between operational efficiency and sustainability fostered a unified culture, instilling purpose and pride as we navigated the tough diamond market conditions. This approach enabled us to maximise value, minimise costs and uphold our commitment to health, safety, environmental and social standards.

While we are pleased with our strong safety performance during the year, we are acutely aware of the need to be constantly alert. In addition, we made significant strides in environmental stewardship, including the successful commissioning of our bioremediation plant, expansion of our rehabilitation initiatives and provision of water infrastructure to local communities.

How would you evaluate the standard of governance across the Group?

I am proud of the strength and effectiveness of our governance structures and processes. Despite our lean team, we ensure that we retain a broad range of appropriate skills on the Board and within Executive Management, enabling us to maintain robust operating processes and controls that are consistently reviewed and refined for improvement. Annual Board performance reviews help us ensure that our structures remain aligned with the business, fostering constructive discussions around risks and opportunities.

The Board and its Committees conduct regular reviews of the Group's policies, covering critical areas such as health, safety, human rights, sustainability and anti-corruption. Compliance with these policies is non-negotiable; the Board ensures adherence through in-depth Committee discussions supported by accurate and actionable information from Executive Management.

We also prioritise open communication with our employees through regular engagements with a designated Director and management teams. This enables the Board to better understand employee challenges and concerns, and maintains a valuable connection with our workforce.

Would you like to extend any thanks or appreciation?

I would like to express my gratitude to our community and government partners for their ongoing support and collaboration and to extend my thanks to my fellow Board members for their invaluable contributions throughout 2024. A special thank you goes to the operational and senior management teams for their unwavering dedication in driving down costs while upholding the high operational and sustainability standards to which we have always aspired.

I also want to acknowledge our Ghaghoo team for their exemplary remediation and rehabilitation efforts, including safely and efficiently decommissioning and removing the treatment infrastructure from site. Their hard work and commitment are deeply appreciated. Finally, I am pleased to warmly welcome our new colleagues who have joined the Company as part of the insourcing of our mining and processing contracts at Letšeng. We look forward to working closely with them to ensure the continued success of the mine.

Please reflect on Gem Diamonds’ sustainability performance over the past year

The past year was positive from a sustainability performance perspective, reflecting Gem Diamonds’ ability to balance our sustainability commitments with the realities of a challenging diamond market. We navigated the industry-wide pressures with discipline, achieving a commendable balance between financial prudence and sustainability progress – an accomplishment that sets us apart from many of our peers in the junior diamond mining sector.

Our focus on cost efficiency and capital discipline has strengthened our sustainability ambitions. Our culture of discipline and accountability drives improvements in operations, safety and environmental stewardship. A key milestone in 2024 was our updated life of mine plan, which reduces waste and emissions, aligning operational optimisation and sustainability goals.

Our commitment to the UN SDGs remains steadfast. The 2024 to 2026 UN SDG framework, incorporating our newly adopted No Hunger and Climate Action targets, is now in implementation. This initiative strengthens our social responsibility efforts while reinforcing our drive towards a lower-carbon future.

We have long prioritised understanding our environmental footprint, and our sustained efforts position us well to manage the risks and opportunities associated with nature-related impacts. As we move forward, we do so with confidence in our ability to meet and exceed the evolving expectations of our stakeholders.

Please provide a brief overview of sustainability activities in 2024

Safety and health

I am pleased to report another strong year of safety performance in which we achieved a record low all injury frequency rate (AIFR). This reflects our unwavering commitment to embedding a culture of safety at every level of the organisation. In response to leadership transitions, operational right-sizing and the insourcing initiatives at Letšeng, we updated our organisational safety culture maturity programme to ensure alignment with our evolving structure. These efforts reinforce our proactive approach to risk management and continuous improvement.

I believe that our culture, discipline and safety-focused operational rigour are on par with the industry’s most respected mining organisations. This is a testament to the dedication of our workforce and our leadership’s focus on upholding the highest safety standards.

Environment

We remain committed to environmental sustainability, balancing cost discipline with stewardship. Our updated mine plan and strategic interventions keep us firmly on track to reduce our Scope 1 and 2 carbon emissions by 30% by 2030 while enhancing operational efficiency and resilience. Strong governance and leadership underpin our progress in responsible tailings and waste management, with independent reviews affirming our high standards and exemplary practices regarding our residue storage facilities (RSFs). Our proactive approach ensures that we meet evolving regulatory demands while reinforcing our leadership in sustainability. The success of our bioremediation plant reflects years of sustained investment and innovation, advancing our progress toward a sustainable water stewardship solution.

Corporate social investment (CSI)

Our CSI initiatives continue to make meaningful progress to the benefit of our project-affected communities (PACs), reinforcing our commitment to sustainable community development. Ongoing performance assessments, skills development and mentorship programmes are being implemented to enhance the long-term viability of our small and medium enterprise (SME) development projects, fostering economic resilience and self-sufficiency.

Infrastructure development remains a key pillar of our community support efforts. Letšeng has completed road maintenance projects to improve connectivity and has delivered water supply infrastructure to several communities. In addition, newly drilled boreholes have secured groundwater access in five PACs, ensuring a reliable local potable water supply.

Beyond infrastructure, we remain committed to safeguarding community health. Our water provision initiatives play a critical role in reducing the risk of E. coli and other waterborne diseases, underscoring our dedication to public health and environmental responsibility.

What are your focus areas in 2025?

A key priority for 2025 is to implement our updated life of mine plan, alongside continued optimising of insourced mining and processing efficiencies. These initiatives are critical to enhancing operational effectiveness, reducing resource consumption and sustaining long-term value creation.

Given the potential for ongoing market challenges, maintaining strong alignment with our stakeholders will be essential. We remain committed to fostering transparent, proactive and frequent engagement, ensuring that stakeholders are well informed and aligned with our strategic direction. This approach not only strengthens relationships but also reinforces confidence in our ability to navigate the evolving industry landscape.

Would you like to extend any thanks or appreciation?

I extend my gratitude to our COO, Brandon de Bruin, and his team for their disciplined and focused operations management and ongoing efforts to seamlessly integrate sustainability considerations into our day-to-day activities. Their commitment remains instrumental in driving our operational and sustainability objectives forward. I also wish to thank my fellow Directors for their continued support and guidance.

Overview

The pressure on the diamond market persisted in 2024, negatively impacting prices and challenging the sustainability of junior diamond producers. Our continued focus on efficiencies, optimisation and cost containment strengthened our ability to withstand external challenges. At the same time, we ensured that our cost containment measures did not compromise our commitment to health, safety, environmental stewardship and social responsibility. We successfully insourced several long-term contracts at Letšeng, including mining, treatment, and housekeeping and laundry, which will improve efficiencies and reduce costs. We also finalised our updated mine plan at Letšeng, which is set to substantially reduce mineral waste mining in the Satellite pit.

We continued to improve site standards at Letšeng, with key advancements in technical projects, such as residue storage and decarbonisation. Climate initiatives support cost reductions, and we expect further improvements in energy efficiency and carbon footprint reduction due to the decreased requirement for waste mining in our updated mine plan. While the transition to renewable energy takes time and investment, we are committed to balancing these efforts with operational priorities and maximising value through resource consumption reductions.

Refer to our Annual Report and Accounts 2024 for details on our financial and operational performance.

Our CSI initiatives continue to progress well, benefiting our communities and strengthening relationships with stakeholders. We maintain open, collaborative dialogue with governments, neighbouring communities and other key stakeholders, enabling us to address emerging issues effectively and to deepen our partnerships.

Looking ahead

While we hope to see a diamond price recovery in 2025, we are prepared for another challenging year. Our strong sustainability performance is a key asset as we navigate these challenging times in the diamond mining industry. We will maintain our focus on enhancing energy efficiency and reducing fuel consumption, driving both cost savings and lower carbon emissions.

Our high governance standards, operational integrity and strong relationships with communities and governments contribute to the resilience of our business in an increasingly complex landscape. We will maintain our disciplined approach to cost management and efficiency improvements while staying aligned with our operational and sustainability goals.

What were the sustainability highlights in 2024?

Amid a challenging diamond market, our integrated focus on operational efficiency and sustainability drove strong operational performance while maintaining cost discipline and advancing sustainability. We do not consider sustainability a separate initiative – it is embedded in every aspect of our operations. From frontline decision-making to executive planning, we assess operational viability, financial considerations and sustainability impact in an integrated and mutually supportive manner. This approach ensures that sustainability remains a core driver of efficiency and long-term resilience.

Our cost-saving initiatives align with our decarbonisation efforts, reinforcing a culture of continuous improvement. Insourcing mining and processing has given our management team direct control over fleet operations, mine plan execution and ore treatment – enhancing flexibility, reducing costs and optimising daily operations, including concurrent rehabilitation. A shared commitment to excellence, strong leadership, and team cohesion continue to drive progress while strengthening communication and safety.

A key factor in our progress is embedding a culture of discipline and accountability within the Company. This past year, we saw marked improvements in operational execution, environmental stewardship and workplace safety. Enhanced housekeeping and meticulous attention to detail contributed to better control over plant operations, reduced environmental impact and more effective cost management. These operational refinements are integral to our broader sustainability objectives.

A significant strategic initiative in 2024 was the comprehensive review of our life of mine plan. The revised approach substantially reduces waste stripping, delivering meaningful benefits across several sustainability metrics – including lower waste generation, reduced carbon emissions and improved fuel efficiency. This is a critical step forward in aligning our operational strategy with our ambitions for decarbonisation.

Our strategic focus on cost efficiency and capital discipline has not come at the expense of our sustainability ambitions; rather, it has reinforced them. We recognise that safety, operational excellence and sustainability are not competing priorities but complementary drivers of long-term value. By embedding this mindset across the organisation, we have strengthened our resilience and sharpened our competitive edge.

Please discuss Gem Diamonds’ safety performance

Safety is not just a priority – it is a fundamental value embedded in every aspect of our operations. We are unwavering in our commitment to working safely and responsibly, ensuring a culture of safety that extends from the boardroom to the mine site. In a year marked by significant operational changes, most notably the insourcing of mining and processing activities at Letšeng and the decommissioning and removal of the processing plant at Ghaghoo, our ability to maintain a strong safety performance was a testament to the maturity and resilience of our systems and processes. True organisational culture is revealed in times of transition, and our teams – supported by robust leadership and change management protocols – effectively mitigated risks throughout the year.

The Group achieved an AIFR of 0.61 in 2024, the lowest on record for the second consecutive year. Letšeng also retained its ISO 45001 certification for health and safety. Our operational teams at Letšeng and Ghaghoo executed extensive site housekeeping, remediation and scrap removal programmes while upholding the highest health and safety standards and maintaining our excellent safety record. These accomplishments highlight our ongoing commitment to protecting our people, sustaining operational excellence and continuously improving safety performance.

Please comment on the Group’s sustainability activities in 2024

Advancing energy efficiency and decarbonisation

Our energy consumption profile has evolved across the Group, driven by our updated mine plan, reduced load shedding and the successful installation of a solar power solution to replace diesel-generated power at Ghaghoo. Energy efficiency initiatives contribute to our decarbonisation goals and enhance the long-term resilience and cost efficiency of our operations. Since 2021, the Group has achieved a 32% reduction in total carbon emissions (Scope 1, 2 and 3) and a 27% reduction in Scope 1 and 2 carbon emissions – in line with our decarbonisation target of a 30% reduction in Scope 1 and 2 carbon emissions by 2030.

At Letšeng, the integration of renewable energy remains complex due to the mine's remote location and unique operational and environmental conditions. However, we remain committed to exploring viable renewable energy opportunities while embedding energy-saving initiatives into daily operations. These initiatives include reducing material movement and optimising operational efficiencies – a strategic approach that has been in place for more than six years and continues to deliver measurable benefits.

Eskom’s decreased load shedding in 2024 resulted in improved grid stability and reduced operational reliance on our diesel-generated power. As grid stability improves, wheeling renewable energy into our operations is becoming increasingly viable. A wheeling mechanism would enable us to source electricity from renewable energy producers, offering a low-capital, scalable solution that can further reduce our carbon footprint.

Advancing nitrate management and water quality

We have made significant progress in reducing nitrate levels in water run-off through targeted remediation efforts. Key initiatives include stormwater management, catchment dams, bioremediation and constructed wetlands, with a finalised wetland design for the RTZ catchment.

In February 2024, our bioremediation plant became fully operational with the commissioning of all six 20 000 litre tanks. The biological reduction process has proven effective, achieving an average 60% to 80% nitrate reduction. Nitrate levels are closely monitored – daily at the plant, weekly in our on-site laboratory, and monthly through external verification. As efficiency tends to decline in colder months, we are exploring solutions to enhance system performance for the upcoming winter.

Ensuring responsible RSF management

The stability and integrity of our RSFs remains a key priority, supported by continuous monitoring, risk mitigation and proactive management measures. Structural integrity has been reinforced through slope regrading, enhanced drainage systems and piezometer installations, alongside a structured monitoring framework with daily, weekly and monthly reporting.

Our RSF management system is fully integrated with site-wide risk controls, ensuring alignment with operational protocols and robust emergency preparedness. Regular inspections by the Engineer of Record confirm compliance and stability, while an Independent Tailings Review Board, following an October 2024 site visit, commended the exemplary condition of our RSFs and the strength of our management framework.

Sustaining environmental stewardship at Ghaghoo

Ghaghoo maintains a strong sustainability record, with no reported environmental or community incidents or grievances during its care and maintenance phase. Situated within the Central Kalahari Game Reserve, Ghaghoo continues to prioritise responsible environmental management, particularly regarding wildlife interactions and environmental remediation. As part of our community support initiatives, potable water is supplied to the Gope community via a dedicated storage facility linked to the mine’s reverse osmosis system, which also serves the local police camp.

Remediation and extensive site clean-up activities agreed with the Department of Mines, which began in 2023, have been completed safely, cost-effectively and in alignment with our environmental and regulatory commitments. As part of the remediation process, the decommissioning and removal of the processing plant and associated infrastructure were successfully completed by year-end.

What are your priorities in 2025?

Safety and zero harm remain our top priority. Embedding sustainability across our operations, alongside the continued success of our insourcing strategy, will further enhance efficiency and long-term resilience. We are dedicated to driving decarbonisation and environmental stewardship while prioritising cost efficiency and operational excellence. Our initiatives include advancing renewable energy solutions such as electricity wheeling, improving energy efficiency, and optimising bioremediation efforts. As market pressures persist, we remain committed to managing controllable factors, maintaining agility, and ensuring operational readiness to capitalise on emerging opportunities.

Would you like to extend any thanks or appreciation?

I extend my gratitude to the Board; their commitment to our strategic objectives continues to strengthen our ability to operate responsibly and sustainably. I would also like to thank Mike Brown, the Chairman of the Sustainability Committee, for his ongoing guidance and invaluable support.

Following the insourcing of mining, processing and housekeeping, I welcome our new employees at Letšeng – building a unified, focused and disciplined team is essential to our success, and their contributions are integral to driving operational excellence.

A special acknowledgement goes to our on-site management teams at Letšeng and Ghaghoo for their unwavering dedication and hard work. Their leadership and unwavering commitment are instrumental in maintaining high standards of safety, operational efficiency and sustainability under challenging conditions in demanding environments.