LSE-listed Gem Diamonds reports that the mining lease for the Letšeng mine has been renewed by the government of the Kingdom of Lesotho.
Gem Diamonds is a global diamond producer of high value diamonds. The company owns 70% of the Letšeng mine in Lesotho, which is famous for the production of large, top colour, exceptional white diamonds, making it the highest dollar per carat kimberlite diamond mine in the world.
Gem Diamonds’ CEO, Clifford Elphick, said that following a successful statutory negotiation process, the terms of the renewed mining lease were agreed with the Lesotho Mining Board and include terms.
These terms include that the lease is renewed with immediate effect for a period of 10 years ( the maximum period allowed under the 2005 Mines and Minerals Act – the Act ) with an exclusive right granted to Letšeng to renew the mining lease for a further period of 10 years.
The respective shareholding in the Letšeng mine remains unaltered. The royalty payable in respect of diamonds sold by Letšeng is increased from 8% to 10% ( the current stipulated rate under the Act ) with effect from 3 October 2019.
Other terms include that the royalty may be remitted in whole or in part in the event that Letšeng embarks upon any material capital project. The number of work permits, which may be granted to Letšeng in respect of foreign nationals, increases in order to fill any skills gap at the mining operations.
Elphick said that Gem Diamonds is proud of its long-standing partnership with the government of Lesotho and its people.
“The mining lease renewal will allow the Letšeng mine to continue to make a very significant economic and social contribution to the people of Lesotho. Gem Diamonds would like to thank the government for its ongoing support and we look forward to continuing the shared value creation long into the future.”