Gem Diamonds Limited

Good morning ladies and gentlemen and welcome to GenDiamonds' half year results presentation for the six months ended 30 June 2026. This record is being recorded and will be available on our website later today. Our presenters today are Clifford Alsick, CEO of GenDiamonds, Michael Michael CFO and Brandon the Brain COO. Please use the Q&A function on your screen to send any questions. All questions will be answered at the end of the presentation. I'll now hand over to Clifford.

Welcome, everybody, and thank you for your attendance. We are addressing our half-year results, and if you could go to the next slide, please, Janine. A disclaimer, I'm sure all of you are very familiar with this, so we can move past this. You're going to be hearing from me, Michael and Brandon covering operations, finance and sales and marketing and then of course at the end we're happy to take questions. So the half year in review, relatively good year, good half year. Skipping across the top row, carrots recovered 41.5 million, carrots three greater than 100 carats in the first half of the year. That's slightly behind or below par, but I'm happy to say that in short order we've recovered a couple more, so we are cracking our long-term average now. Top right-hand corner, average dollar per carat achieved. This shows At the beginnings of an improvement, it started January, February and has continued. We'll need a few more sales and then we'll be able to determine if the trend is now firmly in place, but certainly that is my feeling. Big demand for our goods. Lots of people chasing after them, and it's resulted in price increases. That gave us a revenue of close to $60 million and an EBITDA of $8.6 million. And, of course, that translates into the earnings per share. Pleasingly, if you're looking at the bottom left-hand block, the net debt position has reduced substantially, and we are almost on a positive track. I can talk to the diamond market. Because of the massive drop in supply, mine numbers are a peak supply of some 172 million rough carats per year and that has now dropped to approximately 90 million carats so not quite half but almost half and I think actually it may well be that the number is a little bit less because apart from the well-known mines which have closed or gone into care and maintenance, some closed for good, others into care and maintenance for a period of time, such as big mines, such as Venetia. But I think that there's a myriad of small mines, smaller producers, I'm talking the likes of the alluvial diggers, but who are substantial, in total, substantial producers along the rivers in South Africa and elsewhere. Many of those two have closed, and of course their data is not that accurately reflected overall. But I think with supply having almost halved and demand now settling, as the understanding of what lab-grown or synthetic diamonds, as it's more accurately called now, the role it's going to play is It is a case that the diamond market is resetting. I think on the macro front, unfortunately, the conflict in the Ukraine, in particular dragging on the Middle East too, doesn't seem to come to an end. And on top of that, China doesn't seem to be able to pick itself up and get out of... The deflation and the difficulties that its economy is experiencing. However, down in the bottom row, Gem Diamonds is well positioned. We really have gone after our costs in a major, major way to meet the prices which we were achieving earlier. last year and at the back end of last year. And the result has been that our business resilience program has right-sized our cost base for those prices, and now as prices are increasing, we are starting to reap the benefits of that. So the diamond market certainly has... I wouldn't say a huge spring in its step, but it seems to me that if you look across the size categories, across the quality spectrum, things are improving. You may have seen even at the very bottom end, there have been some price improvements. Not huge, but nevertheless, it sort of has the feel that the bottom of the market may well have been found. So that really has translated well as far as we are concerned at the very top end of quality and size, and we see that in the result that we're able to deliver. I'll hand over to Brandon to deal with these matters, please.

Thank you, Kevin, and good morning, everyone. As Cliff had mentioned, our first of the year, we've seen a very positive and pleasing performance, both through our sustainability and operations. But starting with sustainability and our first priority, safety, again, we've maintained a very solid safety performance in H1. We had one unfortunate LTI of one of our contractors slipping on a pipe near the pump house and sustaining a fracture to his arm. But other than that, you know, we've maintained a very good safety record for the half year. Our all injury frequency rate is at 0.5, which compares to H1 last year, 0.51, which is very pleasing to see. And we obviously work hard to maintain that. The last time injury frequency rate, you can see, is at 0.17. We had no LTIs last year. and unfortunately the one LTI has pushed that up for the first half. Environmentally and socially we've had no major or significant incidents and we remain committed to our decarbonisation objectives. You will note from our report for last year we reached our 30% target to reduce our carbon emissions as compared to our 2021 baseline. We're looking at maintaining that and currently we're training to be about that for 2026. Our training facilities are obviously a priority in terms of our management and care for them. They are being well managed and we've aligned our processes and procedures and systems to the GISDM. Moving on to our operations. We've seen a good productive six months in H1. Our production volumes have remained in line with our planned output for the year and also in terms of our long-term mine plan. It's worth noting that we have found the 5 West cutback in the satellite pipe and therefore the satellite contribution for the first half of the year is 16% as we now move into main pipe. and prepare for the next cutback in satellite starting in 2027. Our business resilience program has really delivered and continues delivering. It was well managed and executed by the teams at the operation, and we are seeing meaningful cost efficiencies coming through, and Michael will lead to that at the in the financial report. Our waste mining, you can see on the graph on the right, approximately 300,000 tons, so a significant reduction in waste mining, which is in line with our optimized mine plan. And while reducing immediate cash spend, which was our target in our business resilience program that we initiated in July last year, we've also been able to maintain our old treatment throughput at approximately 5 million tons per annum. So the waste deferral is not impacted on that, and we're confident that going ahead in the years to come, we are able to maintain our ore production at 5 million tonnes, given that we threw the waste cutting in our large cutback in the main part. As Rupert mentioned, we recovered 3 plus 100 carat in H1, a very nice 347 carat, which is... appropriately being named the Lesotho Jubilee to celebrate Lesotho City's anniversary of its independence. This diamond is up for sale in our tender in September. Two additional 100 carats, 109 carats white and 104 carats yellow have been found post the period end. And if we just have a look at the table below, we can see that We currently in H1 had 3 plus 100 characters and our 2008 to 2025 average is 8 per annum. So currently year to date we're sitting on 5, so tracking well there. We have seen a slight decrease in the other size fractions, the 60 to 100, 30 to 60 and 20 to 30. and it changed to 20s, but that's in line with our resource and reserve statement and what we expect to get out of the resource as we move more into main pipe and out of satellite pipe, which typically gives us a higher grade, so therefore more carrots and also larger diamonds from that pipe. If I can hand back to you, Clifford, on the sales marketing.

Yeah. I think it's been a very pleasing six months when you look at our achieved dollar per carat compared to the same period in the prior year, you know, some 30-40% better, and that's in line with the demand that we have experienced for our goods. It is It's always quite difficult to have an absolute certain capability of commenting whether or not there was some quality improvement, some better diamonds recovered, or whether it is a straight price improvement. But I think it's a bit of both, truth be told. But nevertheless... It's certainly a more positive situation and gets us back to the 2023-2025 sort of average dollar per carat. And an important factor, the 10.8 carats are back contributing about 80% of revenue, which is how we like to look at those things. We continue, you will all have noticed that despite the diamond miners having a particularly rough time and of course talking El Rosa, talking De Beers, the major suppliers, you will all have seen their results and issues and of course that flows through to all of us. But on the other hand, you would all have seen that the luxury brands, the very top end, whether it's Richemont, Vuitton, the like, their top-end jewelry stores have been performing extremely well. And I think that ties in a little bit with the improved pricing that we've experienced. But we do go into the second half of the year with a measure of confidence and hope that the trends continue. And I'm sure by the back end of this year... we will hopefully have seen the nadir, the bottom of the market, will have been found towards the back end of last year. Next slide, please.

Over to you, Mike, for the financials. Thanks, Clifford, and good morning, everyone. I'll take you through the financial performance for the first half of 2026. and I'm pleased to say that this is a much more quickly improved story compared to when we were last year this time. If you look at the overall performance, these results reflect the tangible returns from the business resilience program which we launched in July 25 last year, and it's a type of cost base that's come out of that, together with the improved diamond pricing at this stage for further nudity. Revenue increased by 32% to $59.7 million from $45.4 million in the prior comparative period. This is from the sale of 42,624 carats, an average of $1,395 per carat. That compares to $1,008 per carat from 44,360 carats sold in H1. A notably higher price per carat, more than offsetting the modest 4% decline he won. The step change in pricing reflects a higher quantity of diamonds sold in a period, and an improvement in the market prices for the larger exception of quality stones at the same recolours. Growth fee and selling costs decreased sharply by 6% to $700,000, and the price from $5.2 million to $8.25 million. costs and the reduction is driven by the royalty suspension that's been agreed with the government of Asutu at the end of 2035, August 25, which has subsequently been extended to the end of September 26 this year. And we actively continue to engage with the government of Asutu regarding the royalty relief beyond that date. The benefit cost of sales, cost of sales increased to $47.9 million from $39.7 million, an increase of 21%, but I think I need to unpack that in a bit more detail because we've borrowed some context in that increase. The cash elements of the cost of sales, which excludes waste, which is capitalised, decreased by 1% to $31.3 million, so including the $47.9 of cash cost of $31.3 million. But importantly, there's a 12% decrease in local currency, which went down to $513 million. And that's despite elevated fuel prices and broader inflationary pressures. In units, cost per tonne, or in cash, cost per tonne, increases decreased by 15% in local currency to $197 per tonne, or $12 per tonne. The total oil and cash costs, which include waste capitalised, increased 25% in local currency. Again, a significant saving in local currency terms, and that goes to the following $36 million for $32 million. This was assisted by a reduction in waste times line, which followed 82% that Brandon spoke about in the operational section, which is in line with the Business Revision Programme and Gold End Times to $300,000 from $1.7 million as part of the mine plan being put in place currently. The principal drive of the overall increase then in cost per sale is the non-cash accounting charges, and that's the difference between that $31.3 million cash portion that I mentioned and the $47.9 million in the cost per sale headline number. And that was $16.6 million, and that's attributable to movements in Southpaw and Dominion grouping volumes and costs across the different reporting areas, so another reflection of operational cost inflation. Impacting our results overall over this exchange rate, which has had a negative impact on the overall dollar reported costs. During H536, the Tsutsumoshi, which is pegged to the RAND, strengthened by 11% against the US dollar on average. and the rate moved from 1839 in age 1 to 25 to 1642 in the tavern period. This had an effect of increasing our dollar report cost as mentioned, but also reduced the local currency cash flow generation. Despite this adverse currency impact and the operational cost savings delivered in local currency, they were sufficient to hold the US dollar costs flat. Corporate cost as well reduced by 19% to 2.5 million compared to 3.1 million in H125. This reflects ongoing rationalisation in our South African administration offices and our UK head office and we remain disciplined in this area. All of that, all those results into then a positive inward dial. We reached 8.6 million, a substantial sweep from the negative 2.6 million we reported in the prior period. Earnings before tax recovered to $3.1 million and importantly the group turned to a criminal profit of $600,000.6 million compared to the loss of $11.7 million and you will recall that we had good repayments in the prior period of $10.7 million. The group generated earnings of 5 US cents on a weighted average of 139.9 million shares of issue and that was against a loss of 8.4 US cents in prior period. If we then just go to the next slide to just analyze some of the historical trends of our unit costs, you'll see that our unit costs continue to improve over the period. We've got a table here from H123 and half-year repairs into this half-year, and that's despite the cumulative inflation that's run out of time. The dotted line running from left to right to the top reflects the inflation lead-based to our hundreds. in June 2023, and you'll see that it's roughly increased to just under 120% cumulative over time, but despite that, our costs have dropped. So our volume cash costs, including waste, declined from $422 million per tonne to $206 million, and the significant drop there is also driven by a decrease in volumes. This is reported on a per tonne fee third basis. The B406C Real Cost Savings is the second line of re-exclude waste and that's fallen to 197 MpT and correct treatment costs have more than halved to 62 MpT. So those are the two costs that you can see the benefits of some of the initiatives that have been implemented and that also includes the impact and the benefits of insourcing major activities like mining and processing. If we go to the next slide and look at the financial position, the balance sheet remains relatively stable. Some of the assets remain roughly at about $279 million, but importantly, cash has increased to $3.2 million from $3.8 million at the end, and borrowings declined to $20.6 million from $24.9 million, and that leaves us in a much stronger position. If we look down to our cash management and you'll see that that has increased significantly during the period. The SEMS generates about $27 billion of cash before costs, waste costs and capital, debt repayments and financing costs. The group net debt reduced sharply to just half a million dollars and that's down from $20.1 million at December. We also retained roughly $70 million of unborn facilities which provides meaningful liquidity and the refinancing of those aspiring facilities continue. I'll talk about that shortly. Capital expenditure was minimal at $300,000 from $32.2 million in H1 in 2025, a reduction of 88% and reflecting the completion of applied modification and recovery improvement projects that commenced in 2025. That means that both our Rwami credit facilities, totaling approximately $75-76 million in aggregate across the group, Gen Corpus and HFC, expire in December 2026. The successful refinancing of these facilities is a key assumption in underpinning our bank concern, and we are actively engaging with all our lending banks currently and progressing our discussions for that renewal before it expires in December. The Board has recently established that this financing will be successfully concluded and will strengthen financial position, as we've just reported, and improve operating performance, provide a constructive platform for those discussions. In summary, our 826 results represents a significant financial turnaround for JED. Revenue is up 32%, underlying EBITDA returned to a positive. and the group is back in a typical fronter position. Net debt is near zero. Liquidity has materially improved. Our cost base is significantly stronger. Although we have some work to do, particularly financing and navigating the uncertain market conditions, the business is in a fundamentally better position than it was 12 months ago. I'll hand it back to you to close out the presentation.

Thank you, everybody, for attending. There still is a number of significant issues out there which are impacting confidence generally amongst miners as well as customers, traders, and manufacturers. And that, of course, is the De Beers sales. by Anglo-American. My understanding is that this is moving towards a conclusion. Certainly, indications that I receive, I'm not deeply involved, but indications I've received is that Anglo has an intention to have wrapped this up prior to the year end. And I think the entire industry is really looking forward to getting some certainty in respect of that and some understanding of who the new owners, new custodians of, you know, a significant part of the diamond industry from a rough perspective will be. So that's the one major... Uncertainty. The other of course is exactly where will the consuming market finally arrive in respect of the difference between man-made synthetic diamonds and mine diamonds. It seems that there is a greater understanding amongst consumers as to the merits of something that is natural, which was created in the bowels of the earth and has all of the romance associated with that. But the issue is, you know, where does that finally end up as market share vis-a-vis mine diamonds? So those are two remaining outstandings, but I'm happy to say that It appears that increasingly the market is starting to differentiate between these two products and I think that will be good for all of us in the long run. We're looking forward to selling goods. We have a number of sales coming up in the near future and hopefully, as I've said before, the trend of positivity will remains. It would be extremely helpful if some of these conflicts could come to an end and the world's economies could start to settle and get some direction. But with that, let me bring the formal part of the presentation to an end and happy to take questions which I think, Janine, you're going to manage those, are you?

Yes, Tiff and I will. I haven't seen any questions in the Q&A box.

I see there's a message here which says from Stuart says, has the 347 diamond been sold yet? No, it hasn't. It will be offered to the market in the near future and we look forward to a decent result there.

Duncan, you have your hand up. Sorry, Duncan. Can you unmute and then please go again?

Okay, so I've tried them. Can you hear me?

Thank you, yes.

Great, thanks. Hi Clifford, Duncan from Pamulibrum. Just firstly on the market, you mentioned around half of the total supply may have come out with the various closures and care and maintenance. Do you have any sense of what it might be for your peers in terms of the higher end sort of quality of the market? I mean, I know you have limited direct appears, but yeah, is it a similar amount or are some miners prioritizing there if they can?

Yeah, it's a complex question. Let me try and give you an intelligent answer. So, you know, there's really us and Karoi, you know, that our production is skewed towards this end. However, quite a number of larger goods are supplied from the Angolan industry. All mines from time to time find a whopper as it were and for example in Botswana although they don't differentiate this from time to time we know that You know, there's a decent diamond offered there. Paladin, obviously, is in a constrained state. And, of course, you know, that produces those ultra-blues, which are so magnificent and command such a premium. And similarly, with Kyle now offline, you know, those pinks which emerged from there, you know, were... are now no longer there. I mean, I wouldn't say that sort of half of the larger goods are gone, but it's a guess. It's not, you know, we don't have good data as you pointed out, but I would think that, you know, just as a, you know, a higher order estimate that probably 25% of those better goods are no longer appearing on the market. But, of course, there is this constraint supply anyway. So I hope that's at least a little bit helpful to you.

Yeah, no, that's great. Thank you. Yeah, so it's a significant amount. And just another question on operating costs. You've kept the guidance for the full year for the production and costs. I just wondered if you have been... particularly conservative, given you did have a good, you know, first half costs are very good. And I know production is going to be down, so the denominator will be less. But, yeah, your views on sort of where you might be in the range that you've guided to.

So we, you know, really the team at Le Sing have been outstanding in pricing, Every single contract in turning everything over. There is a bit of diminishing returns here because we've been at this really aggressively now over, as you will have seen from those pens in the graphs, for a number of years. And I would say that it's difficult to keep going at this. You know, we've cut the fat away. We've got into muscle now. You know, we don't want to get into bone. So I think... I think it is fair to put that guidance there and we would be confident that we'll get there. They just are no longer any glaring opportunities to attack, I'm afraid.

Okay, that's great. Thank you.

Okay, keep going if you have any more questions.

No, no, that was good. I suppose on an absolute level, it's still, you know, if we look at it on a dollar millions basis, it does assume significantly more in the second half if we're in that range. So I was just wondering if you would, you know, if ideally you're going to be trying to track at a similar level going forward, rather than necessarily taking out further costs, whether you're hoping to sort of maintain that absolute level.

That is our hope, and of course the maths does throw up some sort of slight Anomaly there, but, you know, this is where we're comfortable. We've got to, we think it's sustainable. And, you know, we hope to continue at this level. Of course, inflation is always chasing us and eating away at us. The fuel has been an increase in fuel price now. So, you know, we're always fighting that. The exchange rate, you know, is quite, on the one hand, you gain and you lose because some of our dollar-based expenses, obviously, with a stronger exchange rate, it's helpful. But, of course, then on the revenue side, we've got lots of local costs, which helps with a weaker exchange rate. So, you know, it's a complicated formula, but we just try and really go after the controllables and then, you know, what we get on... on exchange rate. Unfortunately, we've got no control of that.

Great. Thanks very much. That's all from me.

Thanks, Clifford. Okay. There's just two written questions here. If the profits continue, will the board consider paying a dividend? Yeah, look, we would love to do that as soon as we possibly can. I would think, you know, with a Probably too soon to make forecasts on that, but that's definitely the intention. We have a dividend policy. We want to get dividends to our owners, and certainly, you know, that's where we're going to go. So diamond prices recover. What do you expect us to do to EBITDA? I think, you know, the model is you can model that pretty – you can see what happens in terms of our – predictions in respect of carrots. We've been pretty accurate when we, because we know where we're going to mine. We've got a very good idea of grade. And therefore, you know, forecasting our revenue if we hit the carrots recovered is reasonably, you know, easy to do. And, you know, Duncan, I'm sure, has got his reports out as to what What he thinks may or may not happen. But in terms of the predictability of diamond price, it's not so easy to predict because quality can really impact that. But I think that you can make a stab at the EBITDA relatively accurately given what we are forecasting with respect to carrots recovered for the balance of the year.

Any other questions, either written or verbal?

Yes, the presentation and the recording are available on the website, will be available on the website shortly.

The presentation is already available, and the webcast recording will be available just a bit later today. I don't think we have any other questions for this.

Okay, well then, thank you again, everybody. I appreciate you being here, and thanks for the support over the years. Would you sell your house to buy the shed? You should have done that yesterday. Then you could have bought your house back and kept the shed. Right. Thanks, everybody, and look forward to seeing you again soon.