Sunday, May 22, 2022

Gem Diamonds responds to “Big names behind CKGR mining”

Dear Editor

Reference is made to your article “Big names behind CKGR diamond mining” on page four of the edition dated: 21-28 October, 2007.

This response was prompted by statements made in the published article that border on libel.

The statements that ‘big names in the corporate sector and some influential members of cabinet are behind’ Gem Diamonds’ purchase of Gope Exploration Company in the CKGR’ as well as the further statement that the “Sunday Standard has four names of individuals (some in cabinet, others in companies in which Government is a shareholder) who have vested interests in the new operation at Gope” are factually inaccurate.

The share capital of Gope Exploration Company (Pty) Limited (“Gope Exploration”) is 100 percent owned by Gem Diamonds Limited (“Gem Diamonds”). Allow me to provide some background on who Gem Diamonds is.

Gem Diamonds is a diamond mining company with a portfolio of assets that includes a producing kimberlite mine in Lesotho, producing alluvial mines in Indonesia and the DRC and development projects and other long-term prospects in Angola and the Central African Republic. Gem Diamonds also recently made a take-over offer for Kimberley Diamond Company, a listed diamond mining company in Australia.

In February 2007, Gem Diamonds listed on the London Stock Exchange and raised US$600 million to fund development of its existing assets as well as to pursue acquisitive growth opportunities. The company is currently valued at US$1.3 billion, and is part of the FTSE index of the 250 largest companies listed in the United Kingdom.

Gem Diamonds was able to acquire 100 percent of Gope Exploration from De Beers for cash. A review of the share register of Gope Exploration will reveal Gem Diamonds to be the sole shareholder of Gope Exploration. As a listed company on the London Stock Exchange, the only people “behind” Gem Diamonds are the investing public that have bought the company’s shares and the company’s management who remain shareholders. Any suggestion to the contrary is nonsense, sensationalist and frankly questionable practice on the part of the Sunday Standard.

It appears that the Sunday Standard is implying that there is some secret or covert understanding between Gem Diamonds and the individuals you refer to (whoever they may be). Gem Diamonds would like to place on record that no such arrangements or “deals” of any nature whatsoever have been entered into. Gem Diamonds is a transparent, modern company complying with the highest corporate governance standards appropriate to a company of its standing.

One final point of correction is to the statement that Gope Exploration ‘plans to start extracting diamonds from inside the CKGR’. Clearly our purchase of this asset was with the hope of being able to develop a mine at Gope in due course. However, there are a number of steps that need to occur before this can happen. These include the updating of the Feasibility Study to determine if the project is economically viable, the completion of an Environmental Impact Assessment which will include engagement with all affected stakeholders and, lastly, the granting of a mining license.

I hope this response makes it clear that the conspiracy to which you are alluding is of no substance. We, as a business, are open to media enquiries and would welcome any questions from you on this issue and others.

Best regards

Haile Mphusu


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