Gem Diamonds and Lucara Diamond have called off merger talks, Gem Diamonds said in a statement Tuesday.

A merger between the two companies would have combined their diamond mining assets in southern Africa, which include Gem's Letseng mine in the Kingdom of Lesotho. Lucara is currently conducting trial mining at the Mothae project, which is adjacent to Letseng.

Lucara owns the Boteti AK6 diamond project, now under construction, and Gem Diamonds – having received a license to mine diamonds at the Gope site in Botswana's Central Kalahari Game Reserve – is moving ahead with that project, estimated to contain some 20.5 million carats of diamonds valued at $3.3 billion.

Lucara also has assets in Namibia, and Gem Diamonds' portfolio includes the Ellendale mine in Western Australia, which supplies yellow diamonds to Tiffany & Co.

Gem Diamonds said that it will continue to seek "value-enhancing opportunities."