Half Year 2025 Results

Gem Diamonds Limited (LSE: GEMD) ("Gem Diamonds", the "Company" or the "Group") announces its Half Year Results for the six months ended 30 June 2025 (the "Period").

FINANCIAL RESULTS:

Goodwill impairment

Taking into account the prevailing market conditions, current diamond prices and exchange rates, the recoverable amount of Letšeng was assessed at Period end and an impairment of US$10.7 million was recorded to bring the carrying value in line with the recoverable amount. The impairment was allocated to goodwill which is now fully impaired.

Safety performance

Letšeng recorded zero LTIs during the Period (H1 2024: three), resulting in a zero LTIFR (2024: 0.18) and an AIFR of 0.51 (2024: 0.61), respectively.

Response to market conditions

As reported in the trading update published on 23 July 2025, Gem Diamonds has implemented decisive measures to conserve cash and protect shareholder value in response to the prolonged weakness in global diamond prices, compounded by a weak US dollar and ongoing US tariff uncertainties. While the Company has met its production targets in H1 2025, it has not been immune to the sustained pressure on rough diamond prices.

Key short-term cashflow optimisation measures implemented include the short-term reduction of waste and access to additional Satellite Pipe ore to be treated, workforce rationalisation due to the scaled-back activities and a reduction in corporate costs.

Letšeng's long-term mine plan

Further waste mining reduction initiatives were implemented at Letšeng. Consequently, the life of mine has reduced from 2039 to 2035 using current pricing assumptions and costs. Annual throughput of approximately 5.0 million ore tonnes has been maintained. Should market conditions improve, the flexibility exists to again extend the life of mine.

Gem Diamonds remains committed to its long-term strategy of producing exceptional quality diamonds and is confident that the measures implemented will position the Group for a strong recovery when market conditions improve.

The Company's production and cost forecasts for FY2025 remain in line with the revised guidance as published in the trading update on 23 July 2025.

Commenting on the results today, Clifford Elphick, Chief Executive Officer of Gem Diamonds, said:

"The industry continues to face significant challenges. Sustained pricing pressure, softer demand in key markets, ongoing macroeconomic and geopolitical uncertainty, and tariff uncertainties in respect of India, combine to create difficult trading conditions.

H1 2025 production targets were achieved, however, revenue decreased significantly. In response, key decisions to adapt the mine plan to reduce costs, necessitated the unfortunate retrenchment of 240 employees at Letšeng. While deeply regrettable, these actions position Letšeng to operate sustainably."

The Company will host a live audio webcast presentation of the half year results today, 4 September 2025, at 9:30 BST. This can be viewed by registering on the Company's website using the following link: https://gemdiamonds.zoom.us/webinar/register/WN_50gMcwzXTmOr37OU3-ARkQ.

The page references in this announcement refer to the Half Year Report 2025, which can be found on the Company's website: www.gemdiamonds.com.

The Gem Diamonds Limited LEI number is 213800RC2PGGMZQG8L67

INTERIM BUSINESS REVIEW

OVERVIEW

The Group presents its results for the six months ended 30 June 2025 (the Period) reflecting the ongoing challenging conditions in the diamond market. These headwinds are driven by a volatile global economic landscape, persistent geopolitical tensions, uncertainty surrounding US tariffs, a weaker US dollar and the remaining impact from synthetic diamonds. Despite a modest price recovery reported in January, downward pressure on both rough and polished diamond prices has persisted into 2025.

Letšeng's production volumes for the Period were in line with the planned output, in accordance with the mine plan implemented in December 2024. Operating costs were well-managed and reflected the benefit of the insourcing of treatment activities at the end of 2024.

Revenue was significantly impacted by the persistent challenging market conditions and low diamond prices achieved during the Period. Revenue decreased by 42% to US$45.4 million compared to US$78.0 million in H1 2024. An average price of US$1 008 per carat was achieved from the sale of 44 360 carats (H1 2024: US$1 366 per carat from the sale of 56 994 carats) from Letšeng. Revenue was lower compared to H1 2024 due to pricing achieved under current diamond market conditions and reduced carat volumes, driven by the planned processing of lower volumes of higher-value, higher-grade Satellite Pipe ore during the Period.

This resulted in the Group incurring a negative underlying EBITDA before discontinued operations of US$2.6 million and after a consumable stock obsolescence and stockpile write-down of US$1.7 million (H1 2024: positive underlying EBITDA of US$19.1 million). An attributable loss of US$11.7 million was recorded after a goodwill impairment of US$10.7 million (H1 2024: attributable profit of US$2.1 million).

The Group ended the Period with a cash balance of US$6.8 million (31 December 2024: US$12.9 million) and drawn down facilities of US$34.9 million (31 December 2024: US$20.2 million), resulting in a net debt position of US$28.2 million (31 December 2024: US$7.3 million) and unutilised available facilities of US$55.8 million (31 December 2024: US$69.0 million).

Waste tonnes mined during the Period were reduced to 1.7 million tonnes (H1 2024: 3.2 million) in line with the mine plan. Further waste mining reduction initiatives were implemented at Letšeng, following an optimised smaller cutback in Main Pipe Cut 4 West (MC4W) and isolated steeper pit design opportunities. As a result, the life of mine has been revised from 2039 to 2035, while sustaining annual ore throughput of approximately 5.0 million tonnes. The original MC4W design remains intact and under review, and may be reinstated should market conditions improve, which would again extend the life of mine.

Ore tonnes treated were 2.5 million tonnes (H1 2024: 2.5 million) from which 47 125 carats were recovered (H1 2024: 55 873). The decrease in carats recovered is primarily due to the higher proportion of lower-grade Main Pipe ore, which made up 68% of the treated ore during the Period (H1 2024: 56%).

The safety of the Group's workforce remains a top priority. The critical control management strategy initiated in 2021 to enhance the maturity of Letšeng's organisational safety culture has been fully implemented and the safety performance during the Period remained solid, with an all injury frequency rate (AIFR) of 0.51 (H1 2024: 0.61) and no recorded lost time injuries (LTIs).

The Group remains focused on achieving its decarbonisation target of reducing its 2021 Scope 1 and 2 carbon emissions by 30% by 2030. The Group achieved a 3.0% reduction in carbon emissions compared to H1 2024, the details of which are briefly discussed in the Operations Review on page 2.

Letšeng has unfortunately not been immune to the sustained pressure on rough diamond prices and adverse foreign exchange movements, despite having met its production targets during the Period. In response, shortly after Period end, the Group implemented decisive measures to conserve cash and protect shareholder value.

Implementation of the following key short-term cash flow optimisation initiatives have commenced:

The above initiatives are expected to be fully implemented by the end of September 2025. The Group remains committed to its long-term strategy of producing exceptional quality diamonds and is confident that the actions taken will position the Group well for recovery when market conditions improve. Market developments will continue to be closely monitored, with operational adjustments made as necessary.

LOOKING AHEAD

The key focus for the remainder of 2025 is to responsibly implement the identified cost saving initiatives in order to conserve cash and protect shareholder value during this challenging time in the diamond industry.

OPERATIONS REVIEW

H1 2025 IN REVIEW

SUSTAINABILITY

Health, safety and environment

The Group remains firmly committed to upholding the highest standards of health and safety across the organisation, guided by a zero harm and zero tolerance approach. Since 2021, a culture of accountable, proactive safety leadership - underpinned by disciplined, yet supportive practices - has contributed to meaningful and sustained improvements in safety performance.

The Group maintained a strong safety performance during the Period, achieving an AIFR of 0.51 with zero LTIs recorded.

No major or significant environmental incidents occurred at any of the Group's operations during the Period.

Corporate social responsibility investment (CSRI)

In H1 2025, the Group remained focused on executing its CSRI strategy and initiatives to support its project-affected communities, maintain its social license to operate, and advance the Group's commitment to the UN Sustainable Development Goals. The five-year CSRI strategy (2022 - 2026) remains on track, aligning with both community needs and Group objectives. No major stakeholder complaints were received during the Period.

Carbon emissions

The Group is working towards its decarbonisation target of reducing its Scope 1 and 2 carbon emissions by 30% by 2030 (measured against 2021). The Group's immediate priorities are improving energy efficiencies and reducing diesel and electricity consumption, while it continues to assess suitable low-carbon and renewable energy alternatives.

In H1 2025, the Group's total carbon footprint (Scope 1, 2 and 3) was 50 717 tCO2e, a 3.0% reduction compared to H1 2024 of 52 283 tCO2e, mainly due to the reduction in waste mining activities. The aggregate Scope 1 and 2 emissions for H1 2025 are similar to H1 2024 (decreased by 2%) while the individual emissions for Scope 1 and Scope 2 inversely fluctuated due to reduced load shedding by Eskom during the Period.

Residue storage facility (RSF) management

The Group's RSF management policy and standards are aligned to the Global Industry Standard on Tailings Management (GISTM). Robust management and governance structures are in place at both operational and Group levels to ensure effective management, oversight and assurance. Letšeng's RSFs remain in good condition, supported by a focused and well-executed operations, management and control strategy.

LETŠENG'S LONG-TERM MINE PLAN

An updated life-of-mine plan for Letšeng was implemented in December 2024, as announced to the market at the time and outlined in the Annual Report and Accounts 2024 (page 43). This mine plan included ore from the following open-pit cutbacks: Main Pipe Cut 4 East (MC4E), Main Pipe Cut 4 West (MC4W), Satellite Pipe Cut 5 West (SC5W) and a redesigned Satellite Pipe Cut 6 West (SC6W) incorporating steeper slopes in the competent basalt rock. A life-of-mine plant throughput of c. 5.0 million tonnes per annum was maintained to 2039. Waste stripping of the redesigned SC6W cutback was scheduled to commence in H2 2025, with ore from SC6W scheduled to be available for processing from the end of 2029.

Letšeng's long-term mine plan remains under continuous review to identify optimisation opportunities and to ensure the viability of each cutback, considering current and foreseeable diamond market and economic conditions, as well as the respective impact that each cutback has on the overall value of the mine, under prevailing conditions.

In line with this strategy, the mine plan was further optimised during the Period, with a specific focus on accessing additional ore from SC5W, and reducing waste mining and associated costs in the short to medium term. These initiatives have been implemented as part of the Group's focus on enhancing short-term cash flows and long-term value, and include:

Under the revised mine plan, the life of mine has been reduced from 2039 to 2035, with the treatment of approximately 1.5 million tonnes in the final year. The mine plan remains under ongoing review to ensure continued value optimisation in response to prevailing economic conditions.

PRODUCTION OVERVIEW

1 Carats per hundred tonnes.

Production volumes at Letšeng for the Period were aligned with the mine plan implemented in December 2024, with a deliberate and responsible reduction of waste mining to manage and contain costs in the prevailing market conditions.

Waste mining decreased by 46% to 1.7 million tonnes compared to 3.2 million tonnes in H1 2024. Waste mining will be further reduced over the short to medium term to preserve cash resources until market conditions improve, as discussed above.

Ore tonnes treated in H1 2025 of 2.5 million was very similar to H1 2024, in line with the planned treatment throughput rate of c. 5.0 million tonnes per annum. The immediate reduction in waste mining, as outlined above, will not adversely affect ore accessibility required to meet the treatment volumes set out in the life-of-mine plan discussed above.

Letšeng recovered 47 125 carats compared to 55 873 carats in H1 2024. The 16% decrease in carats recovered during the Period is primarily due to the lower-grade Main Pipe contributing 68% (H1 2024: 56%) to the treated ore in the Period. Several initiatives are being implemented to access c. 1.0 million tonnes of higher-value and higher-grade Satellite Pipe ore over the next 12 months, which is expected to improve both the volume of carats recovered and average price per carat achieved.

The overall grade for H1 2025 was 1.88 cpht (H1 2024: 2.20 cpht), representing a decrease of 15% due primarily to a lower contribution of higher-grade Satellite Pipe ore, which accounted for 32% (H1 2024: 44%) of ore treated during the Period.

Frequency of large diamond recoveries

Three additional diamonds larger than 100 carats were recovered after Period end, resulting in seven diamonds larger than 100 carats being recovered year to date, compared to the full year average of eight for the period from 2008 to 2024.

ROUGH DIAMOND SALES

The average price achieved during the Period was US$1 008 per carat (H1 2024: US$1 366 per carat). 44 360 carats were sold during the Period, generating rough diamond revenue of US$44.7 million (H1 2024: 56 994 carats generating revenue of US$77.9 million). Revenue was lower compared to H1 2024 due to pricing achieved under current diamond market conditions and reduced carat volumes, driven by the planned processing of lower volumes of higher-value, higher-grade Satellite Pipe ore during the Period. This also resulted in a decrease in both the number and quality of high-value larger than 100 carat diamonds being recovered.

The highest price achieved was US$26 441 per carat for a 67.50 carat white diamond. Six diamonds sold for more than US$1.0 million each, generating revenue of US$9.3 million (H1 2024: 11 diamonds sold for more than US$1.0 million each, generating revenue of US$29.5 million). Three of the four larger than 100 carat diamonds recovered were sold in the Period.

GHAGHOO

Following the completion of agreed safety and remedial activities, including the removal of the processing plant and civil infrastructure, the Ghaghoo mine site was formally handed back to the Botswana Ministry of Minerals and Energy, through the Department of Mines. As of 1 June 2025, the Department of Mines has assumed full responsibility for the mine and the Group has no further obligations or commitments related to the license or the mine.

GROUP FINANCIAL PERFORMANCE

H1 2025 IN REVIEW

PROFITABILITY AND LIQUIDITY

Refer to the financial statements on page 10.

* The prior year figures have been re-presented, as Gem Diamonds Botswana (Proprietary) Limited (Ghaghoo Diamond Mine) is classified as a discontinued operation for the current financial reporting period. Refer Note 15, Discontinued operation.

1 Including waste stripping amortisation costs but excluding depreciation and mining asset amortisation.

2 As defined in Note 6, Underlying earnings before interest, tax, depreciation and mining asset amortisation (underlying EBITDA) of the condensed notes to the consolidated interim financial statements.

The Group incurred a negative underlying EBITDA2 of US$2.6 million (H1 2024: positive underlying EBITDA US$19.1 million) after a consumable stock obsolescence and stockpile write-down of US$1.7 million. The loss attributable to shareholders from continuing operations was US$13.3 million after recording a goodwill impairment of US$10.7 million (H1 2024*: profit of US$2.7 million). This equated to a loss per share of 9.5 US cents (H1 2024: profit per share of 1.9 US cents) on a weighted average number of shares in issue of 139.7 million (H1 2024: 139.7 million shares).

Revenue

The Group's revenue of US$45.4 million was mainly generated by the sale of 44 360 carats at an average price of US$1 008 per carat. Additional revenue is generated through an arrangement with two diamond manufacturing customers to supply polished diamonds to some of the world's most premium luxury brands, and other partnership arrangements. These agreements allow the Group to share in a margin uplift on the sale of polished diamonds. In H1 2025, additional revenue of US$0.3 million (H1 2024: US$0.6 million) was generated from these arrangements.

Costs

The Group closely manages its costs to preserve cash resources and maintain appropriate liquidity. Operating expenses continue to be negatively impacted by higher inflation. The insourcing of mining, treatment and certain other activities at Letšeng had a positive impact on costs, significantly reducing operating expenses in H1 2025 compared to H1 2024.

OPERATING EXPENSES

Total direct cash costs at Letšeng (including waste costs) decreased 14% to LSL699.0 million (US$38.0 million) in H1 2025 from LSL809.5 million (US$43.2 million) in H1 2024. This is due to the 46% decrease in waste tonnes mined, cost savings realised through the insourcing of treatment activities at the end of 2024 and the ongoing review of all operational areas with a focus on cost reduction.

Direct cash costs (excluding waste costs) per tonne treated decreased by 5% in local currency to LSL232.48 (US$12.65) in H1 2025 compared to LSL243.84 (US$13.01) in H1 2024 mainly due to the above-mentioned cost savings realised.

Non-cash accounting charges per tonne treated decreased by 40% mainly due to waste amortisation that decreased to US$13.6 million (H1 2024: US$17.8 million) due to the higher contribution of Main Pipe ore that has a lower stripping ratio. A further decrease in the unit cost was driven by movements in stockpile and diamond inventory.

Total waste cash costs decreased by 38% to LSL116.8 million (US$6.4 million) compared to LSL189.6 million (US$10.1 million) in H1 2024 due to the 46% decrease in waste tonnes mined and other cost savings realised. The waste cash cost per waste tonne mined, however, increased by 15% primarily reflecting the fixed cost component allocated over lower volumes of waste tonnes.

Letšeng unit cost analysis

1 Direct cash costs represent all operating costs (excluding waste costs), excluding royalty and selling costs.

2 Non-cash accounting charges include waste stripping cost amortised, inventory and ore stockpile adjustments, and finance lease costs, and exclude depreciation and mining asset amortisation.

CORPORATE EXPENSES

Corporate office costs are incurred to provide expertise in all areas of the business to realise maximum value from the Group's assets. These costs are incurred by the Group through its technical and administrative offices in South Africa (in South African rand) and head office in the UK (in British pounds).

Corporate costs are closely managed and ongoing rationalisation has resulted in a 23% decrease in costs to US$3.1 million compared to US$4.0 million in H1 2024.

IMPAIRMENTS

Taking into account the prevailing market conditions, current diamond prices and exchange rates, the recoverable amount of Letšeng was assessed at Period end and an impairment of US$10.7 million (US$7.5 million after tax and non-controlling interest) was recorded to bring the carrying value in line with the recoverable amount. The impairment was allocated to goodwill which is now fully impaired. Refer Note 11, Intangible assets for further details.

GHAGHOO

The Ghaghoo Diamond Mine in Botswana site was formally handed back to the Botswana Ministry of Minerals and Energy, through the Department of Mines. As of 1 June 2025, the Department of Mines has assumed full responsibility for the mine and the Group has no further obligations or commitments related to the license or the mine. This supported the release of the rehabilitation provision in the Period.

The above resulted in Gem Diamonds Botswana being classified as a discontinued operation in the Period, refer Note 14, Discontinued operation and the comparative figures for H1 2024 have therefore also been re-presented. The profit from discontinued operation in the Period amounted to US$1.6 million (H1 2024: loss of US$0.6 million in the re-presented figures) after the reversal of the rehabilitation provision of US$2.3 million.

EXCHANGE RATE IMPACTS

While revenue is generated in US dollars, the majority of operational expenses are incurred in the relevant local currency of the operational jurisdictions. Local currency rates for the Lesotho loti (LSL) (pegged to the South African rand) and Botswana pula (BWP) strengthened slightly against the US dollar compared to H1 2024, which increased the Group's US dollar reported costs and decreased local currency cash flow generation.

FINANCIAL POSITION

Selected totals of the Interim Consolidated Statement of Financial Position and key asset drivers are tabled below.

Waste cost capitalised decreased due to the 46% decrease in waste tonnes mined. The waste stripping cost amortised decreased to US$13.6 million (H1 2024: US$17.8 million) due to the higher contribution of Main Pipe ore of 68% that has a lower stripping ratio, compared to the 56% contribution of Main Pipe ore in H1 2024. Depreciation and mining asset amortisation increased marginally to US$6.1 million (H1 2024: US$6.0 million).

During the Period, the majority of capital spent related to the purchase of front-loading earthmoving machinery to improve ore feed into the plants and a new drill, totalling US$1.5 million. A further US$0.3 million was spent on geotechnical monitoring equipment and licenses and pit slope lateral support studies. The balance of the capital was spent on enhancements to the recovery areas for improved workflow and security, and improvements to the bioremediation plant.

Liquidity and solvency

The Group ended the Period with cash on hand of US$6.8 million (31 December 2024: US$12.9 million), of which US$5.4 million is attributable to Gem Diamonds. The Group generated cash from its operating activities of US$14.9 million (H1 2024: US$39.7 million) before investing US$11.9 million in working capital, incurring net finance costs of US$2.2 million and paying income taxes of US$9.1 million at Letšeng (mainly relating to the 2024 financial year end).

At Period end, the Group had utilised facilities of US$34.9 million (31 December 2024: US$20.2 million), resulting in a net debt position of US$28.2 million (31 December 2024: US$7.3 million) and available facilities of US$55.8 million, comprising US$22.0 million at Gem Diamonds and US$33.8 million at Letšeng. The increase in net debt is mainly due to lower revenue generated, investment in working capital and waste stripping and tax payments.

The Group-wide revolving credit facilities at Letšeng (LSL450.0 million and ZAR300.0 million) (US$42.2 million) (and Gem Diamonds (US$30.0 million) expire in December 2026.

Letšeng has a LSL100.0 million general banking facility that is reviewed annually. The Group engages regularly with lenders and credit providers to ensure access to funding and to manage the Group's cash flow requirements.

Summary of loan facilities as at 30 June 2025:

Taxation

The Group applies all relevant principles in accordance with prevailing legislation when assessing its tax obligations. The Group's forecast effective tax rate for the full year is 13.1% (31 December 2024: 29.4%) and has been applied to the actual results, resulting in a tax benefit being recognised for the Period. Most of the Group's taxes are incurred in Lesotho, which has a corporate tax rate of 25%. The effective tax rate is forecast below the Lesotho statutory tax rate mainly due to permanent differences arising from the impairment of goodwill which is not deductible for tax purposes and the impact of deferred tax assets not recognised on losses incurred in other operations. Refer Note 8, Income tax benefit/(charge) for more detail.

The Group continues to pursue a long-standing legal matter relating to an amended tax assessment that was issued to Letšeng by the Revenue Services Lesotho in December 2019, contradicting the application of certain tax treatments in the current Lesotho Income Tax Act, 1993. The Group expects to pursue this matter in the courts in H2 2025. The Group has sought senior legal counsel and their advice indicates good prospects for success.

GOING CONCERN

The projections of the Group's current and expected profitability, considering reasonable possible changes in operations, key assumptions and inputs, indicate that the Group will be able to operate as a going concern for the foreseeable future. Refer to the financial statements on page 10.

LOOKING AHEAD

Due to the prolonged weakness in global diamond prices, compounded by a weak US dollar and ongoing US tariff uncertainties, the Group has implemented further decisive measures to preserve cash resources and protect shareholder value.

The short-term cash flow optimisation initiatives discussed in the Interim Business Review are expected to be completed by the end of September 2025 and will result in an estimated LSL30.0 million (US$1.7 million) cost saving per month at Letšeng. The once-off implementation costs, consisting mainly of employee retrenchment payments, is estimated at LSL15.0 million (US$0.8 million).

PRINCIPAL RISKS AND UNCERTAINTIES

The Group's principal risks and uncertainties, both current and emerging, that could have a material financial, operational and compliance impact on its performance and long-term growth, are presented in the Annual Report and Accounts 2024 (pages 21 to 26). The Group's risk management strategy has been implemented to manage Group risk so as to minimise threats and maximise opportunities.

The Group's principal risks as presented in the Annual Report and Accounts 2024 remain unchanged in the medium to long term and take into consideration current market and operational conditions of the Group's operations and global markets to determine whether any changes occurred in the perceived risk level associated with each principal risk.

The assessed risk levels for (i) rough diamond demand and prices and (ii) variability in cash generation, as presented in the Annual Report and Accounts 2024, have increased from the previous year. The increase in the level of risk is attributed primarily to macro-economic and geopolitical uncertainty, increasing inflationary pressures, US tariff uncertainty, a weak US dollar and the prolonged weakness in global diamond prices.

Clifford Elphick

Chief Executive Officer

HALF-YEAR FINANCIAL STATEMENTS

RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE HALF-YEAR REPORT AND FINANCIAL STATEMENTS

PURSUANT TO DISCLOSURE AND TRANSPARENCY RULES (DTR) 4.2.10

The Directors confirm that, to the best of their knowledge, this condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting and that the Half-Year Report includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R, namely:

• an indication of important events that have occurred during the first six months of the financial year and their impact on this condensed set of financial statements; and
• material related-party transactions in the first six months of the year and any material changes in the related-party transactions described in the Gem Diamonds Limited Annual Report 2024.

On 31 March 2025, Michael Lynch-Bell, the Senior Independent Non-Executive Director retired from the Board following his nine-year tenure and in line with UK Corporate Governance principles. With effect from 1 April 2025, Janet Blas was appointed to the Board as a Non-Executive Director, the Audit Committee Chair and a member of the Remuneration Committee; and Non-Executive Director, Rosalind Kainyah, was appointed as the Senior Independent Director and Chair of the Remuneration Committee. The names and functions of the other Directors of Gem Diamonds Limited are listed in the Annual Report for the year ended 31 December 2024.

For and on behalf of the Board

Michael Michael

Chief Financial Officer

INTERIM CONSOLIDATED STATEMENT OF PROFIT OR LOSS FOR THE SIX MONTHS ENDED 30 JUNE 2025

1 Unaudited

* The prior year figures have been re-presented, as Gem Diamonds Botswana (Proprietary) Limited (Ghaghoo Diamond Mine) was classified as a discontinued operation during the current financial reporting Period. Refer Note 14 , Discontinued operation.

INTERIM CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED 30 JUNE 2025

Other comprehensive income/(loss) that will be reclassified to the interim Consolidated Statement of Profit or Loss in subsequent periods:

1 Unaudited

INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2025

1 Unaudited

2 Audited

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2025

Attributable to the equity holders of the parent

1 Other reserves relate to Foreign currency translation reserves and Share-based equity reserves.

INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED 30 JUNE 2025

1 Unaudited

* The prior year figures have been re-presented, as Gem Diamonds Botswana (Proprietary) Limited (Ghaghoo Diamond Mine) was classified as a discontinued operation during the current financial reporting Period. Refer Note 14 , Discontinued operation.

CONDENSED NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2025

CORPORATE INFORMATION

1.1 Incorporation and authorisation

The financial information shown in this report relating to Gem Diamonds Limited and its subsidiaries (the Group) was approved by the Board of Directors on 3 September 2025, is not audited or reviewed by the auditor and does not constitute statutory financial statements. The report of the auditor on the Group's 2024 Annual Report and Accounts was unqualified.

The Group is principally engaged in operating diamond mines.

BASIS OF PREPARATION AND ACCOUNTING POLICIES

2.1 Basis of preparation

The condensed consolidated interim financial statements for the six months ended 30 June 2025 (the Period) have been prepared in accordance with IAS 34 Interim Financial Reporting. The condensed consolidated interim financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group's Annual Financial Statements for the year ended 31 December 2024. The condensed consolidated interim financial statements are unaudited and do not constitute statutory accounts as defined in section 434 of the Companies Act, 2006. The financial information for the year to 31 December 2024 included in this report was derived from the statutory accounts for the year ended 31 December 2024, a copy of which has been delivered to the Registrar of Companies. The auditor's report on those accounts was unqualified, did not include a reference to any matters to which the auditor drew attention by way of an emphasis of matter and did not contain a statement under sections 498(2) or (3) of the Companies Act, 2006.

Going concern

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out on pages 1 to 3. The financial position of the Group, its cash flows and liquidity position are described in the Group Financial Performance on pages 5 to 8. The Group's net debt at 30 June 2025 was US$28.2 million (31 December 2024: US$7.3 million). The Group's available undrawn facilities at 30 June 2025 amounted to US$55.8 million (31 December 2024: US$69.0 million), resulting in liquidity (defined as net debt/cash and available undrawn facilities) of US$27.6 million (31 December 2024: US$61.7 million). The gross liquidity position of the Group (defined as gross cash and available undrawn facilities) as at 30 June 2025 is US$62.5 million (31 December 2024: US$81.9 million). The Group's Revolving Credit Facilities (RCF), which total US$72.2 million when fully unutilised, mature on 21 December 2026. In addition, there is a US$5.6 million general banking facility with no set expiry date, which is reviewed annually (refer Note 14, Discontinued operation).

The impact of the current diamond market conditions, the persistent geopolitical tensions, the uncertainty surrounding US tariffs and the weaker US dollar were considered in assessing future cash flows. Taking into account management's actions in response to the current operating environment, which include the various cost reduction initiatives and revision to the waste mining activities being implemented, and its impact on the forecasts, timing of cash flows and sensitivity analyses, the Directors have a reasonable expectation that the Group has adequate financial resources, with the continued access to the Group's RCFs, for the Group to be able to meet its liabilities as they fall due for the foreseeable future. For this reason, the Directors continue to adopt the going concern basis in preparing this half-year report of the Group.

2.2 Material accounting policies

The accounting policies adopted in the preparation of the condensed consolidated interim financial statements are consistent with those followed in the preparation of the Group's Annual Financial Statements for the year ended 31 December 2024.

New accounting pronouncements which became effective on 1 January 2025 are detailed below and will be adopted in the 2025 Annual Report and Accounts. These amendments will have no impact on the Group's accounts.

New and amended standards and interpretations

Standards issued but not yet effective

The standards, amendments and improvements that are issued, but not yet effective, up to the date of issuance of the Group's consolidated interim financial statements are listed in the table below. The standards, amendments and improvements have not been early adopted and it is expected that, where applicable, these standards and amendments will be adopted on each respective effective date. The impact of the adoption of these standards cannot be reasonably assessed at this stage.

* Annual periods beginning on or after.

2.3 Critical accounting estimates and judgements

The estimates and judgements adopted in the preparation of the condensed consolidated interim financial statements are largely consistent with those followed in the preparation of the Group's Annual Financial Statements for the year ended 31 December 2024. The current diamond market, ongoing global conflicts and foreign currency movements were considered during the Period. The outcome of this review required the impairment of goodwill and certain non-current assets and the write down of consumables and stockpile balances. Refer Note 11, Intangible assets for further detail on the goodwill impairment.

Further details on estimates and judgements applied during the Period are detailed in the Going concern section on page 17, Note 11, Intangible assets and Note 16, Share-based payments.

SEGMENT INFORMATION

For management purposes, the Group is organised into geographical units as its risks and required rates of return are affected predominantly by differences in the geographical regions of the mines and areas in which the Group operates or areas in which operations are managed. The below measures of profit or loss, assets and liabilities are reviewed by the Board of Directors. The main geographical regions and the type of products and services from which each reporting segment derives its revenue from are:

During the Period, the Ghaghoo mine, which forms part of the Botswana operating segment which had previously been placed on care and maintenance, was reclassified from continuing to a discontinued operation. This follows the relinquishment of the associated mining license and the formal handover of the mine site to the Botswana Ministry of Minerals and Energy, through the Department of Mines. As of 1 June 2025, the Department of Mines has assumed full responsibility for the mine and the Company has no further obligations or commitments related to the license or the mine.

Segment revenue is derived from mining activities, polished diamond manufacturing margins and diamond analysis and manufacturing services.

The following tables present revenue from contracts with customers, profit/(loss) for the Period, underlying EBITDA and asset and liability information from operations regarding the Group's geographical segments:

1 Unaudited

2 Audited

3 No revenue was generated in BVI and Cyprus.

4 Segment operating (loss)/profit is after the impairment of goodwill of US$10.7 million.

5 This includes the adjustment to align the forecast effective tax rate for the full year, to the actual results for the Period. Refer Note 8, Income tax benefit/(charge).

Included in revenue for the Period is revenue from three customers who individually contributed 10% or more to total revenue. This revenue in total amounted to US$20.4 million (30 June 2024: US$43.2 million from two customers) arising from the sales reported in the Belgium segment.

Segment assets and liabilities do not include deferred tax assets and liabilities of US$4.1 million and US$69.9 million respectively (31 December 2024: deferred tax asset US$4.3 million, deferred tax liabilities US$69.3 million).

Total revenue for the Period is lower than that of the prior period, driven by the prolonged depressed rough diamond market and the overall lower quality of production together with a decrease in both the number and quality of diamonds larger than 100 carats recovered. The dollar per carat achieved was US$1 008 compared to the prior period of US$1 366 per carat, and carats sold of 44 360 were 22% lower than the prior period of 56 994 carats.

1 Unaudited

2 No revenue was generated in BVI and Cyprus.

3 This includes the adjustment to align the forecast effective tax rate for the full year, to the actual results for the prior period. Refer Note 8, Income tax benefit/(charge).

1 Unaudited

The revenue from partnership arrangements of US$0.3 million (30 June 2024: US$0.6 million) represents the additional uplift from partnership arrangements for which revenue is recognised when the significant constraints are lifted or resolved and the amount of revenue is guaranteed. At Period end 1 236 carats (30 June 2024: 1 881 carats) have significant constraints in recognising revenue relating to the additional uplift.

Other operating income is categorised separately as it relates to income which is minor or irregular and is sourced outside of normal operations.

1 Unaudited

* The prior year figures have been re-presented, as Gem Diamonds Botswana (Proprietary) Limited (Ghaghoo Diamond Mine) was classified as a discontinued operation during the current financial reporting Period. Refer Note 14 , Discontinued operation.

• UNDERLYING EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND MINING ASSET AMORTISATION (UNDERLYING EBITDA) BEFORE DISCONTINUED OPERATION

1 Unaudited

2 Operating (loss)/profit includes the write-down of consumable and stockpile inventories from continuing operations of US$1.7 million.

* The prior year figures have been re-presented, as Gem Diamonds Botswana (Proprietary) Limited (Ghaghoo Diamond Mine) was classified as a discontinued operation during the current financial reporting Period. Refer Note 14 , Discontinued operation.

SEASONALITY OF OPERATIONS

The Group's sales environment with regard to its diamond sales is not materially impacted by seasonal and cyclical fluctuations. The mining operations may be impacted by seasonal weather conditions. Appropriate mine planning and ore stockpile build-up ensures that operations can continue during adverse weather conditions.

1 Unaudited

During the Period, the Group reported a loss before tax of US$20.0 million from continuing operations, which resulted in a tax benefit of US$2.4 million.

The forecast effective tax rate for the full year is 13.1% (31 December 2024: 29.4%) and has been applied to the actual results.

The effective tax rate is below the Lesotho statutory tax rate of 25% primarily as a result of permanent differences arising on the impairment of goodwill which is not deductible for tax purposes and the impact of deferred tax assets not recognised on losses incurred in non-trading operations.

PROPERTY, PLANT AND EQUIPMENT

During the Period, the Group invested US$2.2 million (30 June 2024: US$1.4 million) into property, plant and equipment, all of which related to Letšeng (30 June 2024: US$1.3 million).

Letšeng's capital spend was incurred mainly on the purchase of front-loading earth moving vehicles to improve material feed into the plants and a new drill, totalling US$1.5 million.

Letšeng further invested US$8.1 million (30 June 2024: US$12.3 million) in deferred stripping costs which were capitalised. Amortisation of the deferred stripping asset (waste stripping cost amortisation) of US$13.6 million (30 June 2024: US$17.8 million) was charged to the Interim Consolidated Statement of Profit or Loss during the Period. The amortisation is directly related to the areas that were mined during the Period and their associated waste to ore strip ratios.

Depreciation and amortisation of US$5.2 million (30 June 2024: US$5.0 million) was charged to the Interim Consolidated Statement of Profit or Loss during the Period.

In addition to the above, foreign exchange movements on translation affecting property, plant and equipment increased the asset balances by US$15.3 million (30 June 2024: US$0.1 million).

Right-of-use assets

1 Unaudited

2 Audited

Plant and equipment mainly comprise of pit dewatering and back-up power generating equipment utilised at Letšeng. Motor vehicles mainly comprise vehicles utilised by contractors at Letšeng. Buildings comprise office buildings in Maseru, Antwerp, London, Gaborone and Johannesburg.

Right-of-use assets are depreciated on a straight-line basis over the shorter of the estimated useful life and the lease term.

Movements within right-of-use assets mainly relates to the cancellation of the lease for the majority of the office buildings in Maseru. The original contract was cancelled and all associated assets and liabilities were derecognised. Refer Note 18, Lease liabilities.

Goodwill 1

US$'000

1 Goodwill allocated to Letšeng Diamonds.

2 Unaudited

3 Audited

The recoverable amount (value in use) of Letšeng was assessed at Period end and an impairment of US$10.7 million (US$7.5 million after tax and non-controlling interest) was recorded in the Interim Consolidated Statement of Profit or Loss to bring the carrying value in line with the recoverable amount. The recoverable amount substantiated the carrying value of the Property, Plant and Equipment associated to the Letšeng Cash Generating Unit and therefore the impairment was allocated solely to goodwill, which is now fully impaired. The reduction in the recoverable amount is primarily driven by lower prices than previous forecasts. Impairments of goodwill are not eligible for reversal in future periods.

Value in use inputs:

The following key inputs were used in the valuation:

The carrying amounts above approximate their fair value due to the nature of the instruments.

Analysis of trade receivables based on their terms and conditions

1 Unaudited

2 Audited

3 Other non-current receivables relates to a financing arrangement provided to a third party to assist with possible expansion opportunities.

4 Trade receivables include a balance of US$4.6 million relating to the sale of diamonds which concluded prior the end of the Period, with the funds clearing through the bank shortly after Period end. This sale has been included in the revenue for the Period.

Based on the nature of the Group's client base and the negligible exposure to credit risk through its client base, insurance asset and other financial assets, the expected credit loss is insignificant and has no impact on the Group.

1 Unaudited

2 Audited

At 30 June 2025, the Group had US$55.8 million (31 December 2024: US$69.0 million) of undrawn facilities, representing the LSL300.0 million (US$16.9 million) (31 December 2024: LSL450.0 million (US$23.8 million)) and ZAR200.0 million (US$11.3 million) (31 December 2024: ZAR300.0 million (US$15.9 million)) of the secured revolving credit facility at Letšeng, ZAR100.0 million (US$5.6 million) (31 December 2024: ZAR100.0 million (US$5.3 million)) of the Letšeng general banking facility, and US$22.0 million (31 December 2024: US$24.0 million) of the Company's secured revolving credit facility. For further details on these facilities, refer Note 17, Interest-bearing loans and borrowings.

The general banking facility at Letšeng is held with Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division). This facility is reviewed annually. During the Period the facility was utilised from time to time based on cash flow requirements but repaid in full by Period end.

DISCONTINUED OPERATION

The Ghaghoo diamond mine, part of the Group's Botswana operations, was placed on care and maintenance in 2017 due to operational and market-related challenges.

Following a strategic review and several unsuccessful attempts to sell the asset, the Group initiated discussions with the Department of Mines, dating back to February 2023, to address safety and remediation activities, including the removal of the processing plant and associated civil infrastructure, with the objective of surrendering its mining license.

The mine site was formally handed over to the Botswana Ministry of Minerals and Energy through the Department of Mines during the Period. Formal confirmation of the acceptance of the mining license surrender was received from the Department of Mines on 28 April 2025. Effective 1 June 2025, the Department of Mines assumed full responsibility for the site, and the Company no longer holds any obligations or commitments related to the mine or its associated license.

In accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations, the subsidiary was classified as a discontinued operation which was abandoned, following the relinquishment (for no consideration) of the underlying mining license which represented the subsidiary's principal business activity.

The results of Gem Diamonds Botswana (Ghaghoo diamond mine), the discontinued operation, for the Period prior to abandonment and the comparative period are presented below:

1 Unaudited

The Interim Consolidated Statement of Financial position includes the below balances relating to Gem Diamonds Botswana:

The net cash flows attributable to the discontinued operation are as follows:

1 Unaudited

2 Audited

3 Financing provided by Gem Diamonds Botswana (Proprietary) Limited's holding company, being Gem Diamonds Limited, to fund care and maintenance costs.

ISSUED CAPITAL

Share capital

1 Unaudited

2 Audited

3 Represents share repurchased by Gem Diamonds.

SHARE-BASED PAYMENTS

Employee Share Option Plan 2017 Award (ESOP) - 10 April 2025 award

On 10 April 2025, 375 970 nil-cost options were granted to certain key employees under the ESOP of the Company. The value of the award was determined based on the Group performance for the prior 2024 financial year. The vesting of the options will be subject to the satisfaction of certain service conditions which are classified as non-market conditions. The award is subject to malus and clawback conditions in line with the Group's ESOP.

In addition, 2 226 929 nil-cost options were granted to certain Executive employees and the Executive Directors on the same terms as detailed above. These options were granted in line with the adopted Gem Diamonds Incentive Plan (GDIP) in 2021, which integrated annual bonus awards with awards under the ESOP. These options are also subject to a two-year holding period after the vesting date.

All the options vest over a three-year period in tranches of 1/3 commencing on 10 April 2026 and ending on 10 April 2028. The options are exercisable between the respective vesting dates and 10 April 2035. If the service conditions are not met, unvested options lapse. The fair value of the award is based on the observable Gem Diamonds Limited share price on the date of the award with no adjustments made to the price. The Company's share price on the date of the award was £0.08 (US$0.10). The option grants are settled by issuing shares.

The expense disclosed in the Interim Consolidated Statement of Profit or Loss is made up as follows:

The expense recognised for employee services received during the Period is shown in the following table:

1 Unaudited

INTEREST-BEARING LOANS AND BORROWINGS

The carrying amounts and maturities of the revolving credit facilities, project debt facilities and premium financing facilities within the Group are disclosed in the note below.

1 Unaudited

2 Audited

LSL450.0 million and ZAR300.0 million (US$42.2 million) secured bank loan facility at Letšeng Diamonds

The Group, through its subsidiary Letšeng Diamonds, has a LSL450.0 million (US$25.3 million) and ZAR300.0 million (US$16.9 million) revolving credit facility (maturing on 21 December 2026) jointly with Nedbank Lesotho Limited, Standard Lesotho Bank Limited, First National Bank of Lesotho Limited, Firstrand Bank Limited (acting through its Rand Merchant Bank division) and Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division).

The LSL450.0 million facility is subject to interest at the Central Bank of Lesotho rate plus 3.25% and the ZAR300.0 million facility is subject to South African JIBAR plus 3.00% (31 December 2024: South African JIBAR plus 3.00%). At Period end LSL150.0 million (US$8.4 million) and ZAR100.0 million (US$5.6 million) respectively had been drawn down resulting in LSL300.0 million (US$16.9 million) and ZAR200.0 million (US$11.3 million) remaining available.

The remaining balance of the credit underwriting fees capitalised is US$64.0 thousand (31 December 2024: US$79.0 thousand). The capitalised fees are amortised and accounted for as finance costs in profit or loss over the term of the facility.

US$30.0 million secured bank loan facility at Gem Diamonds Limited

This facility is a secured revolving credit facility jointly with Nedbank Limited (acting through its London branch), Standard Bank of South Africa Limited (acting through its Isle of Man branch) and Firstrand Bank Limited (acting through its Rand Merchant Bank division) for US$13.5 million, US$9.0 million and US$7.5 million, respectively. All draw downs are made in these ratios.

At Period end, US$8.0 million (31 December 2024: US$6.0 million) had been drawn down resulting in US$22.0 million (31 December 2024: US$24.0 million) being available. The remaining balance of the previously capitalised credit underwriting fees is US$45.0 thousand (31 December 2024: US$60.0 thousand) at Period end. The capitalised fees are amortised and accounted for as finance costs in profit or loss over the period of the facility.

The US$-based interest rate for this facility at 30 June 2025 was 9.51% (31 December 2024: 9.54%) which comprises term SOFR plus a 0.21% credit adjustment spread and 5.00% margin.

Total interest for the Period on this interest-bearing RCF was US$0.6 million (31 December 2024: US$1.3 million).

The facility includes an additional US$20.0 million accordion option for Gem Diamonds, the utilisation of which is subject to all necessary credit and other approvals from the lenders. There was no utilisation of this facility in the current or prior period.

ZAR132.0 million (US$7.4 million) unsecured project debt facility at Letšeng Diamonds

This loan is an unsecured project debt facility with Nedbank and underwritten by the Export Credit Insurance Corporation (ECIC) which was entered into on 29 November 2022 to fund the replacement of the primary crushing area (PCA) at Letšeng. The loan is repayable in equal quarterly payments which commenced in March 2024. The outstanding balance at Period end was ZAR75.4 million (US$4.3 million) (31 December 2024: ZAR94.3 million (US$5.0 million)). This loan expires on 27 May 2027.

The South African rand-based interest rate for the facility at 30 June 2025 was 10.06% which comprises South Africa JIBAR plus 2.50%.

Total interest for the Period on this interest-bearing loan was US$0.2 million (31 December 2024: US$0.7 million).

LSL200.0 million (US$11.3 million) secured term loan facility at Letšeng Diamonds

The loan is repayable in equal monthly instalments which commenced in May 2024. The outstanding balance at the end of the Period was LSL153.3 million (US$8.6 million). This loan expires on 30 April 2029.

The interest rate on the loan is 9.75%, representing the Central Bank of Lesotho prime rate minus 1.50%.

Total interest for the Period on this interest-bearing loan was US$0.4 million (31 December 2024: US$0.6 million).

Loan covenants

The Group's revolving credit facilities, Letšeng Diamonds' ZAR132.0 million (US$7.4 million) project debt facility and LSL200.0 million (US$11.3 million) secured term loan facility are subject to certain financial covenants and these are assessed at the end of each quarter. The loans may become immediately repayable if these covenants are breached. The Group monitors its forecasts for covenant compliance and engages with its Lenders regularly.

Insurance premium finance for Multi-Aggregate and Asset All Risk Insurance policies

During the Period, all outstanding insurance premium finance balances were fully repaid. The total interest paid during the Period relating to these liabilities was US$19.0 thousand (31 December 2024: US$0.1 million).

1 Unaudited

2 Audited

Lease payments comprise principal payments of US$0.9 million (31 December 2024: US$2.7 million) and repayments of interest of US$0.2 million (31 December 2024: US$0.4 million).

Refer Note 10, Right-of-use assets for details on new leases entered into and leases derecognised during the Period.

1 Unaudited

2 Audited

3 These amounts are non-interest bearing and are settled in accordance with terms agreed between the parties.

Royalties consist of a levy payable to the Government of the Kingdom of Lesotho on the value of rough diamonds sold by Letšeng. Withholding taxes mainly consist of taxes payable to the Revenue Services Lesotho relating to dividends and other services. The carrying amounts above approximate fair value.

1 Unaudited

* The prior year figures have been re-presented, as Gem Diamonds Botswana (Proprietary) Limited (Ghaghoo Diamond Mine) was classified as a discontinued operation during the current financial reporting Period. Refer Note 14 , Discontinued operation.

COMMITMENTS AND CONTINGENCIES

The Board has approved capital projects of US$3.1 million (31 December 2024: US$3.5 million) at Letšeng, mainly relating to the purchase of a front-end loader, a mobile rotary trommel screen and continued investment in residue storage expansion.

Of the total approved capital projects, US$1.8 million has been contracted at 30 June 2025, relating to the above-mentioned items of mining and processing equipment.

The Group has conducted its operations in the ordinary course of business in accordance with its understanding and interpretation of commercial arrangements and applicable legislation in the countries where the Group has operations. In certain specific transactions, however, the relevant third party or authorities could have a different interpretation of those laws and regulations that could lead to contingencies or additional liabilities for the Group. Having consulted professional advisers, the Group has identified possible disputes approximating US$0.7 million (31 December 2024: US$0.6 million).

The Group monitors possible tax claims within the various jurisdictions in which it operates. It is noted that tax legislation is highly complex and subject to interpretation of the application of the law. It is common for tax authorities to review tax returns, and in some instances, disputes may arise over the interpretation and application of the prevailing tax legislation. Due to the complexity of the legislation, significant judgement is required to determine any effects of uncertainties in accounting for and disclosure of income taxes. When uncertain tax positions have been determined as being probable, they have been provided for and disclosed. There have been no uncertain tax positions that arose during the Period and therefore there has been no change in judgement applied and the accounting treatment compared to that disclosed in the 2024 Annual Report and Accounts. While it is difficult to predict the ultimate outcome in some cases, the Group, does not anticipate that there will be any material impact on the Group's results, financial position or liquidity.

1 Unaudited

EVENTS AFTER THE REPORTING PERIOD

No events have occurred between the end of the reporting period and the date of approval of these financial statements that require adjustment to, or disclosure in, the financial statements.