Gem Diamonds Limited announced that its revenue fell 8.3 percent year over year to US$180.2 million during the first six months of 2012, ending June 30, 2012. The miner's attributable net profit for the first half of the year also declined 51 percent to US$14.3 million.

Half-Year Production: Diamond production at the company's Letšeng mine in Lesotho showed a "continued solid performance" for the period, with output totaling 57,116 carats, up 8 percent year over year. Recovered grade for the half year was 1.68 carats per hundred tonnes (cpht), up 8 percent from the first half of 2011.

Gem Diamonds mined 3.3 million tonnes of Letšeng ore and treated 3.4 million tonnes of ore. "Good progress" was also made on the Letšeng production expansion project, Project Kholo, which commenced in January 2012.

At the miner's Ellendale mine in Western Australia, carat production totaled 78,881 carats, up 51 percent from the comparable half year in 2011. Ore mined totaled 2.0 million tonnes, up 234 percent from the first half of 2011, and ore treated was 2.1 million tonnes, up 44 percent from a year ago.

"Against a challenging price backdrop for the diamond industry, the first half of 2012 was marked by strong operating performance by both Gem Diamonds' producing mines, the Letšeng mine in Lesotho and the Ellendale mine in Australia," says Clifford Elphick, Chief Executive of Gem Diamonds. "Letšeng reported an increase in both carats recovered and recovered grade compared to H1 2011, with cash costs being held in line with management estimates. Ellendale reported a significant increase in both ore mined and treated and carats produced, which achieved strong prices during the Period despite the challenging market conditions."

Project Review: The company reports that while it remains committed to doubling production at Project Kholo in Lesotho and the development of its Ghaghoo mine in Botswana, in light of the current economic climate and to maintain its strong balance sheet, the Board has taken the decision to extend the completion dates of Project Kholo and Ghaghoo "and will keep the global economic environment under review. Should market conditions improve materially, the project execution will be accelerated," notes the miner.