Business
Commissioning of Second Plant
Commissioning of Second Plant.
About this update from Gem Diamonds Limited
[{"type":"text","content":"\n Gem Diamonds Limited\n31 March 2008\n\n31st March, 2008\n\n GEM DIAMONDS LIMITED\n\n ('Gem Diamonds' or the 'Company')\n\n FIRST ORE TREATED THROUGH LETSENG MINE SECOND PLANT\n\nGem Diamonds (LSE: GEMD) is pleased to announce that the construction of Letseng\nMine's second plant is now in its final stages of completion and that\ncommissioning has progressed well with the first ore treated through the plant\non 23 March 2008.\n\n\n\nFinal commissioning is continuing and full production from this gravity fed DMS\nplant is expected to be reached during the second quarter of 2008. The existing\nRecovery Plant will now service both treatment plants. The successful conclusion\nof the commissioning will see the doubling of Letseng Mine's hard rock\nprocessing capacity from 2.6mtpa to 5.2mtpa and making it the world's seventh\nlargest diamond mine by throughput.\n\n\n\nThe decision was taken to build the second plant in October 2006 halving the\nlife of the open pit kimberlite mine from 70 to 35 years and thereby\nsignificantly enhancing its net asset value.\n\n\n\nIn 2007, 76 873 carats were sold from Letseng Mine, a 45% increase on the 52 998\ncarats sold the year before. In 2008, the mine is expected to produce\napproximately 100 000 carats.\n\n\n\nLetseng Mine is operated by Letseng Diamonds, which is 70% owned by Gem\nDiamonds, a FTSE 250 listed company, and 30% owned by the Government of the\nKingdom of Lesotho. The Letseng Mine has produced three of the world's largest\ndiamonds. Two of these diamonds were recovered in the last 18 months - the 603\ncarat Lesotho Promise in August 2006 which sold for US$12.4 million and the 493\ncarat Letseng Legacy in September 2007 which sold for US$10.4 million.\n\n\n\nThe Letseng Mine is powered by electricity provided by the Lesotho Electrical\nCorporation (LEC) which in turn sources the majority of this power from the\nSouth African parastatal ESKOM. Once the second plant is at full production the\nmine's demand for power will increase to eight megawatts. Letseng has\npermission to increase its power demand from one of the LEC's key supply lines\nto nine megawatts. To date, Letseng has experienced limited power outages on\nthis line as a result of the power supply problems with ESKOM in South Africa;\nhowever, production levels have not been affected.\n\n\n\nAt present, work is ongoing to...