Gem Diamonds Limited

Good morning, ladies and gentlemen, and welcome to Gem Diamonds Half Year Results Presentation for the 6 months ended 30 June 2025. Our presenters today are Clifford Elphick, CEO of Gem Diamonds; Michael Michael, CFO; and Brandon de Bruin, COO.

[Operator Instructions] I will now hand over to Clifford.

Good morning, everybody, and welcome to Gem Diamonds' Half Year Results for 2025. I'm sure you have the page up in front of you.

This is the disclaimer. I'd ask you all at your leisure, please to read through this.

As Jannine said, it's me, as the CEO, Michael, CFO; and Brandon, the COO. We are now on Page 4, a quick snapshot of the first half of 2025.

Carats recovered at some 47,000. That's slightly less than what we would normally do, but on plan.

The important point to note is the dollar per carat achieved at just over $1,000. And this, of course, drives the revenue figure on the right-hand side $45.5 million.

We have a negative EBITDA of $2.6 million, which is extremely disappointing for Gem, but nevertheless, this is a function of the price issues which are in the diamond industry at the moment. That, therefore, drives a loss per share of $0.084.

We have net debt of $28 million, but immediately below that bottom right-hand corner, you'll see we have some undrawn facilities of close to $56 million. Bottom left, our all injury frequency rate.

It's an important point. We're very proud of that.

We have trended, as you will see, Brandon will deal with this later in the presentation. But the trend is down and it really is an excellent figure.

And on our decarbonization target, we are, again, trending very well towards our target. I can have a general commentary in these 3 columns.

First of all, what's happening in the global economy, well, there's a lot of uncertainty, and I'm talking here with reference to the diamond industry. There's a lot of uncertainty because of U.S.

tariffs. You may all be aware that President Trump took a decision to put penalty tariffs on India because they buy oil from Russia and the impact of that is that their total tariff is 50%.

Now some 95%, 90% to 95% of all diamonds are polished in India currently. And you can imagine what this has caused, the panic that this has caused in that part of the diamond industry.

And of course, we're all interlinked. And so it comes back to us as well at a mine level.

2 very important countries who are major participants in the diamond industry, Russia and Israel are at war, not with themselves, obviously, but separate wars. And the result of that is to create tension and uncertainty in the diamond industry.

There are sanctions placed on Russian goods, but the Russians managed to get around these goods and of course, many Indian customers are buying those goods because India doesn't have sanctions on Russia. And this adds to the problem.

Subdued growth and in particular, the Chinese economy, which -- difficulties in the Chinese economy, the spend on Diamond came to a rapid halt over the course of the last few years. I'm happy to say that that's just starting to unblock and many of the Chinese diamond businesses and particularly the larger ones based out of Hong Kong, Chow Sang Sang, those sorts of companies, big chains, brands, that seems to -- there is some green shoots that we are seeing there.

They're reporting growth, increased sales and increased diamond consumption. As far as the diamond market is impacted by all of this, we are still feeling this pressure on rough and polished and in particular, at the bottom end, I'm talking about the sort of goods which come out of Catoca, Luele, Liqhobong, which is now closed, those sorts of lower-priced goods are in particular, feeling the pressure, but we are not immune at the top end.

And we, too, have had our dollar per carat drag down as a result of this. All of you will know that not just the junior diamond producers, but the majors are also under significant pressure.

Obviously, De Beers and Debswana, those problems are well-understood in the market, well-flagged, well-discussed. But all of our peers, Petra, Lucara, Lucapa, Ekati, Burgundy, you know what's happened to Mothae that as announced, it's on care and maintenance.

Liqhobong is closed. So these businesses and companies, the mines are all under pressure.

We, in Gem, think, believe that given the quality of what it is that we produce, that we are likely to not have the same sustained pressure because there has been in the recent past some distinction between synthetic diamonds, factory-made diamonds and those that are mined. We're starting to see in the market as a whole, on social media, in more informed commentary that the marketing message around natural and in particular, larger and bigger quality natural is starting to make inroads, making a dent into the consumers' mindset and that the sustained drop in factory made, in manmade, diamonds, synthetic diamonds that the continued sort of straight line plummet in those prices is causing a lot of people to question the point of buying those sorts of goods.

Suffice it to say that our prices at $1,000 a carat, it's a historical low for us. We've had to react pretty quickly to this.

And I like to say that we have been pretty ruthless. We've gone at this with the mindset of positioning the business for the recovery, which will inevitably come.

So we are constantly assessing our mine plan to try and optimize whatever we can do there. And we've got some significant changes, which we will run through.

I'm happy to say that those changes are flexible. We're able to implement them in the short term.

We are able to change them if prices start picking up again, which is what we anticipate. All costs and capital controls have been implemented at every level, every single contract is scrubbed every piece of capital is looked at and turned over and over and over again before a decision is made to implement it.

And I would say that frankly, the mine has never looked better. It has never been run more efficiently.

Our team is motivated. There's strong leadership and I think we're in good shape for when the market does turn.

And as I say, I have no doubt that, that will happen. So what is it that we have done?

Well, we've had to really move very quickly. Conserving cash protecting shareholder value is the order of the day.

And as I've just talked about, the short, the medium and the long-term mine plan have been tweaked in the short term, change quite substantially in the medium and in the long term, but flexibility has been maintained there. There is often a comment that when you start messing around with waste stripping and waste mining that you're putting the long-term future of the mine at risk.

I'm happy to say that because of getting through the bottleneck in the mine plan, that has -- that is not what has happened here, but we'll go through that in some detail. Unfortunately, in cutting costs, it quite quickly comes to people.

And we have, during the month of September. We have -- and August, we have unfortunately had to take 240 people out of our workforce.

That process is complete. And going into September, we are positioned to benefit from the lower cost base that comes as a result of this.

And our guiding light has been we -- our dollar per carat. We really -- our costs have to be below our dollar per carat.

And that is to ensure that we are a business which produces cash, which doesn't consume cash. And in that way, we can sustain ourselves and see out this current position that the mining -- that the diamond mining industry faces itself.

Whilst we have reduced waste mining activities, nevertheless, our throughput remains at 5 million tonnes per annum. So that's the point I've been trying to hammer on here.

Corporate costs, too, not just at the mine, but everywhere and senior executives have led from the frontier, taken salary reductions, temporary salary reductions in order to ensure that we get through all of this. We get monthly average savings.

As I say, we've completed this at the end of August. But going into September, it beds down.

And from October, we get $1.5 million a month of savings. We have been aggressive about this, but I think it was absolutely the right decision, and I'm happy to say we haven't put the long-term future of the ore body at risk.

Right. Let me hand over to Brandon to talk about the sustainability.

Thank you, Clifford. Good morning, everyone.

In terms of our safety performance, as Clifford has mentioned, we're proud of it. Our safety culture has matured significantly over the past years.

As you can see in our all injury frequency rate, on a downward trend and at a record low 0.51 for H1 2025. And I'm pleased to say that year-to-date, we're sitting at 0.44 also 0 LTIs, no lost time injuries.

We unfortunately had 3 at the beginning of last year, but this year trending well, and we obviously keep very focused on our safety throughout. .

We've also had no major or significant environmental or social incidents. Our CSI strategy is in line with our 2022 5-year needs analysis and is on track.

And of course, much needed assistance to our communities is also important to us and to them. Our total carbon emissions, as Clifford mentioned, we are tracking towards our 30% reduction again by 2030 against our 2021 baseline.

It's tracking well. We've ended last year at 27% towards that target.

And I'm pleased to say that for the first half as compared to H1 2024, we're 3% down on that. This has predominantly due with lower volumes, in particular, waste mining, and we'll touch on that a little bit later.

Our tailings facilities are in very good condition. I'm pleased to say they are well managed, and we've appropriately aligned our management of them to the GISTM.

We continue working hard on our integration of our adopted UN SDGs, and that is something that obviously integrates into how we operate. Moving on to our operations.

In the review on that. We had a very pleasing H1 operationally.

Our production volumes were in line with our planned output and we have seen significant cost savings realized from in-sourcing key activities, in particular, our mining, our treatment and our housekeeping. Clifford mentioned our drive for cost containment over this period, and we've done that by significantly looking at our waste profiles and the ability to reduce immediate waste stripping and adapted our mine -- our long-term mine plan as well.

Our waste tonnage for H1 was 1.7 million tonnes, down from 2.3 million tonnes in H2 last year and 3.2 million tonnes in H1 2024. So we focused quite hard on reducing waste mining and the cost related there too.

But at the same time, we have maintained our ore profile at 5 million tonnes per annum. I'm pleased to say for H1, we've achieved that target, having treated approximately 2.5 million tonnes of ore.

In terms of our carats recovered, 47,000 carats approximately were recovered in H1 as opposed to 49 carats in H2 2024. This has largely to do with the higher volume of lower grade Main Pipe material that was treated approximately 68% of our treated ore, the 2.5 million tonnes in H1 came from the Main Pipe.

We had approximately 800,000 tonnes of satellite ore in the mix. This does impact our overall carat recovery.

But from a grade perspective, we did achieve the expected grades from the ore body. Main Pipe also delivers a lower volume of high-value diamonds.

And this week, we saw throughout and also had an impact on our overall dollar per carat along with the more significant impact from the market that Clifford had mentioned earlier. Pleased to say that year-to-date, we have recovered 7 greater than 100-carat diamonds, number of them, not the best color or quality.

Certainly, the majority coming from the Main Pipe. But in terms of recoveries, as you can see in the table below, we're in line with our large diamond recoveries compared to our overall yearly averages on the right-hand column.

Clifford mentioned the significant negative impact on revenue that we experienced in H1 and this has resulted in a decisive action to conserve cash in the immediate term and to adapt our long-term and short-term mine plan to be able to do this in a manner that is responsible when taking into account the future of the ore body and is also flexible to allow us to adapt when prices are -- when you see improvement in prices in the market. The flexibility in our short to long-term mine plan has allowed us to do this and to adapt quickly to our current circumstances and an immediate drive on our costs.

This has largely been driven, as I mentioned earlier, by a reduction in our waste mining. The first part of this imposes probably the most significant change to the long-term mine plan is that we revisited and revised the next Main Pipe cutback, which was Main Cut 4 West on the western side of the pit.

Originally, the profile was approximately 37 million tonnes of ore as against -- which would unlock approximately 37 million tonnes of -- sorry, other way around, 37 million tonnes of waste, which would unlock 37 million tonnes of ore at a strip ratio of 1:1, on current economics and foreseeable economics, this was proving marginal. The issue, however, is that our waste profile over the next 5 to 6 years was in excess or around the 10 million tonne per annum mark.

Obviously, in the earlier years, there is a significant constraint on cash. We therefore relook this cutback and designed a smaller cutback in the interim, which delivers approximately 11 million tonnes of ore for only 1.4 million tonnes of stripped waste.

Therefore, in the overall mine plan, we've reduced the waste profile by about 35 million tonnes. This obviously results in a reduction of ore, and that was about 25.1 million tonnes.

This change in both the short and the longer term significantly improves cash flows on our current economic circumstances that we're facing and in the longer term from an NPV profile. The -- it also results in a reduction of the life of mine by 4 years.

However, as Clifford mentioned, and happy to say that the flexibility in our mine plan will allow us to reintroduce a larger Main Pipe cutback when prices do improve, and we see the value in doing so. The upfront waste stripping, obviously, is our current concern.

We also reduced our short-term waste mining to minimum levels. for the next 12 to 18 months.

This has been done whilst maintaining our ore throughput of 5 million tonnes per annum. And the majority of the mine over the next 3- to 5-year -- majority of the ore over the next 3 to 5 years will be coming from Main Pipe and we are through the bottleneck, as Clifford mentioned, on the eastern pack, and that allows us to maintain our ore profile at 5 million tonnes per annum.

This, again, we've deferred Satellite Pipe, our next cutback, cut 6 to 2027, we will start stripping and our Main Pipe cutbacks to 2028 with minimal waste being mined in -- for the rest of 2025 and '26. This, again, is flexible when prices do improve, as Clifford mentioned, we expect them to, we are able to bring this forward and we will revise the mine plan and adapt accordingly.

We also were able to unlock an additional 1 million tonnes of Satellite Pipe ore and we'll be mining that in H2 this year and H1 next year to approximately 100,000 tonnes per month. This is, of course, high value ore, and we expect to see some good recoveries coming out of that and improve our dollar per carat.

Clifford mentioned, the revised mine plan has resulted in a further resizing of the workforce and our fleet. And we've managed to implement that in the time from the end of Q1 to the end of August.

Stockpiles, we expect our stockpile levels. They've been well managed and are growing to be at approximately 2.4 million tonnes at the end of life of mine.

And this has also been included in the long-term mine plan in 2034 and a portion of in 2035. This slide really just shows what I've been talking about.

You can see the waste profile is low in 2025 and 2026 with minimal waste being mined, and we ramped up in 2027 with satellite waste stripping and then in 2028 with both Satellite and Main Pipe waste stripping, coming to a maximum levels in '29 and 2030 of approximately 5.5 million tonnes. Just as a comparison, our previous mine plan, which we released in December, had waste levels of approximately 10 million tonnes for the 5-year period to 2030.

So a significant reduction in West, a change in the ore profile. And this is, as I've explained on the previous slide, this just depicts what the picture looks like.

So on that, I can say that demand plan is continuously being reviewed and the prevailing and foreseeable economic and market factors and useful to know that this mine plan is flexible as those change and as anticipated for the better. If I can then hand back to Clifford for the sales and marketing.

Yes. So this is the normal chart which we put up.

You'll see the average dollar per carat of $1,000. I've spoken about that.

That's low for us. Last year, we were about $1,400 a carat for comparison.

During this period, 3 diamonds were greater than 100 carats and we're tracking -- we're sold, and we're tracking online for our large diamond recoveries. We continue to supply the premium luxury brands who have a strong demand for our product.

We are growing this part of our business. And I think in the next 5 to 10 years, it's going to become an important part as the bifurcation, if I can call it that, of the diamond market grows even more importantly as bottom end goods compete with factory-made synthetic diamonds.

And as the larger, more valuable, more important stones are increasingly targeted at the top-end luxury market. The revenue per size fraction, 71% is low.

Historically, we've been 75% to 78%. So 71% for 10.8 carat diamonds revenue contribution is a little bit lower than normal, but it's not something we are concerned about.

It's a function of where we've been mining in the ore body. Over to you, Mike.

Thank you, Clifford, and good morning, everyone. I guess the backdrop of that tough marketing environment, diamond market environment, we generated revenue of $45.5 million, and that was based off the sale of 44,360 carats at an average dollar per carat as we saw on the previous slide of $1,008 per carat.

That in comparison to the previous year's sale of 56,994 carats at $1,366 per carat, giving us a revenue of $78 million. The drop in carats was driven by the change in mix as Brandon alluded to earlier on, with a higher proportion of Main Pipe coming through in this period compared to the prior H1 '24 and the Main Pipe having a lower grade and therefore, lower output.

Royalties and selling costs represents 10% royalty to the government of Lesotho plus the sales and marketing costs that we incur in Antwerp on the tenders held there. Cost of sales, you'll see it dropped by $6.8 million.

That's 15% year-on-year, period-on-period. Lower costs driven by some of the in-sourcing and other cost initiatives we implemented in that -- at the end of 2024, we've in-sourced the treatment contract, and that has seen some benefit of costs.

And we've already had the ongoing in-sourcing of the mining, which the benefit of that is also been seen during the period. And that's notwithstanding a stronger rand in the period.

$18 39 was the average exchange rate that we experienced in 2025, and that's compared to $18.73 of H1 2024. Again, similarly, a lot of cost initiatives at the corporate office resulted in a 22% or just under $1 million drop in the corporate costs, bringing that down to $3.1 million.

Included in our cost of sales though was an impairment on the inventory stockpile using current pricing and base that on the lower grade stockpile we have, a portion of it we had to consider $1.8 million provision against that, and that's included in the $39.7 million. Disappointingly, as Clifford said, all of that results in an underlying loss of EBITDA of $2.6 million.

Some other key points just to highlight there. The depreciation of mining asset is fairly consistent.

We've now had the mining fleet for both periods. So our depreciation is relatively consistent during the period and will be going forward.

Other operating income, we also did a review of our lease in Maseru, Lesotho. And we've exited that lease, and that's resulted in a $0.5 million gain on the lease adjustment that takes place there.

The next item, the impairment of goodwill. That relates to the impairment of goodwill following the assessment that we did at period end and taking into account the prevailing market conditions, diamond prices and exchange rates, we assessed that there was a difference between our carrying value and our recoverable amount in terms of the balance sheet and we allocated that impairment or the differential on those to goodwill.

The goodwill now is fully impaired at $10.7 million. We had a small foreign exchange gain and then following that, we had a $2.1 million cost interest -- net interest cost, slightly less than the prior year.

But you will see when we go to the cash review that we've extended our drawdowns compared to December 2024. We've ended up at a loss of $20 million for the period, and then bringing in a tax element at Letseng, which is 25% and accounting for a credit as a result of those losses, we've ended up with a $2.4 million credit to our income tax charge.

Following through then to noncontrolling interest, that represents 30% of the government portion in Letseng. And again, that flows through as a contribution from the minority interest into that with a credit of $4.3 million and ending with an attributable loss of $13.3 million.

Ghaghoo, in terms of Ghaghoo, the mining license was formally handed back to the Botswana ministry during the period, and as a result they have assumed full responsibility for the mine, and the group now has no further obligations and commitments relating to that -- to the license or the mine. Following that, we reversed our environmental provision, which was about $2.3 million.

And then just the care and maintenance cost up until that point in time, resulted in a net gain on the discontinuing operation of Ghaghoo of $1.6 million. We then ended up the year with an $11.7 million attributable loss and taking into account 140 million shares in issue that results in the loss of $0.084 per share, Clifford mentioned on the first slide.

Going on to the detailed cost analysis, ore tonnes treated profile was very similar 2.5 million tonnes in each period. Our total operating costs in gross maloti in H1 '25 was LSL 699 million.

That was down 14% from the prior year of LSL 809 million. In dollar terms, that equates to $38 million versus $43.2 million.

You'll see that our costs now overall is 5% down. And that is a benefit of the in-sourcing that I mentioned, notwithstanding inflation running in the suit of about 5% per annum.

Non-accounting charges represents waste stripping, cost amortized, inventory and stockpile adjustments and finance lease increase adjustments. And that has dropped down to LSL 60 a tonne from LSL 100 a tonne in the previous period.

And that's mainly driven by the lower waste amortization of $30.6 million in this period, down from $17.8 million in the previous period, and that's again driven by the lower satellite contribution in the period, the Satellite Pipe has a higher strip ratio overall and it results in a higher amortization rate. And as a result, this charge dropped due to the higher Main Pipe contribution.

On the waste side, we've had lower volumes. You can see that drop by 46% to 1.7 million tonnes, and that will obviously reduced going into H2 based on the short-term -- short- to medium-term initiatives we've implemented.

Waste costs in total was LSL 116 million and that was down 39% from LSL 189 million in the prior period. Total waste costs actually increased though to LSL 68 a tonne, up 15%, and that's driven by the lower volumes and the fixed cost element in that driving the unit cost up notwithstanding that we reduced the costs by 39%.

In dollar terms, you can see that the cost increased, and that was due to the higher stronger rand. Just on the financial position, balance sheet at the end of the period.

We converted our balance sheet at LSL 17.77, which is the closing rate of the period compared to LSL 18.26 of the prior year. There were no material differences on the balance sheet.

One point to highlight, though, the provisional taxes, you'll see there's a $1.9 million receivable under the total assets versus in the prior period, we had an income tax payable of $6.8 million. And that's just virtue of the fact that we paid some provisional taxes during the period, which will be refundable in the following year.

If I just look then to the next slide, which is the group management. We've got a waterfall of how our cash flows have moved during the period.

We ended the year with group cash of $6.8 million, net debt of $28.2 million. That compares to December of $7.3 million.

So you can see we've had to utilize additional facilities during the period. as we manage through this current market condition.

Our available facilities, as Clifford mentioned, is $55.8 million at period end. So just to go through the cash flow, Letšeng generated $19 million of free cash, pre-waste investment and capital.

We drew down $12 million on our RCF facilities. We actually drew down $14 million, but we repaid $2 million of the longer-term debt, which is the primary crushing area debt facility we have and the fleet debt we have.

So we paid $2 million during the period as well. Working capital increased.

We've had inventory and receivable investment. Our stockpile increased from period on from the previous period as we've increased our stockpile volumes together with the higher cost of diamond inventory because of the lower throughput of production.

We also had a receivable of $4.6 million from our previous tender, which given to them in our bank accounts on period end and flowed a couple of days later, which increased our working capital. Net income tax paid, it's a high number and that relates to about $7 million relating to the 2024 tax year.

In Lesotho, you pay your final tax bill in March for the previous year. So that was assessed at that point in time, and we paid $7 million there.

And then going forward, the current year's provisional taxes are based on the last year's tax. And as a result, we had to pay $2 million in June which is the refundable amount that we're looking at now based on the forecast tax position to the end of the year.

Investment of $8 million, that was a $1.7 million waste costs we spoke about earlier. Corporate costs at $3 million, net finance cost at $2 million, as we spoke about, a small investment of $2 million in property, plant and equipment.

There have been stringent application to reduce debt as we go forward. So that's been well contained.

And then net cost of Ghaghoo at the end with regards to those care and maintenance costs after we -- or before we reverse the provision. That results then in cash available at the end of the period of $7 million and available facilities of $55 million.

And then on the last slide, we're just reiterating the guidance that we published on the 23rd of July, which takes into account the revised short-term mine plan program implemented together with the average effect of the savings that we're looking at and that we spoke about under the third slide when we spoke about the savings going forward of $1.5 million. So that's factored in here.

And this is how we see the year end at this stage, ending up in terms of guidance.

All right. Thanks, everybody.

That's the formal part of the presentation done. Just going to the questions.

The first question is, I am encouraged by the uptick in the rough diamond index reported by Zimnisky. Yes, Duncan, we are.

We had a very good feeling in June and July as we started to see prices where we're picking up quite nicely. We had a sale which did better than what we had budgeted for, and we're anticipating.

But that was set back shortly thereafter with the tariff which President Trump instituted on India became apparent that there was a problem there. So we saw a brief uptick, but I'm afraid to say that after that, there was some significant uncertainty introduced into the market.

We are selling goods in the near future. And so we're going to see what comes about after that because it's now been a couple of weeks, a week or 2.

And the market is already -- I mean, I have to say, traders, manufacturers are ingenious people, and they're already talking about moving production capacity around and finishing goods elsewhere. So I'm sure that they will find a way to ameliorate that problem.

Share price down 30% today. Market cap is their consideration to delist Gem.

I can't answer that question right now. Of course, share price down 30% in a day.

Personally, I think that's a huge overreaction, and I'm sure that, that will come back in due course that the company is in good shape to weather the storm. Our costs are less than what our dollar per carat is.

And I've got no doubt that this will turn around. The manager shareholders are disappointed in the share price.

We discussed this with them often and there are references to all of our peer groups, all of us suffering the same problem. Diamonds are unloved at the moment.

I have been in this industry for some 30 years. And I have seen times when diamonds are unloved.

We do have a major crisis that we are dealing with. And that is what is the future in terms of man-made, factory-made diamonds.

I believe that, that matter is slowly but surely being resolved in the market. Consumers -- there are certain consumers who want to buy cheap diamond lookalikes but there are other consumers who are not interested in that.

I mean, a good example is Taylor Swift. Now of course, there's not a lot of people with a couple of billion dollars, not that Travis Kelce has got a couple of billion dollars.

But nevertheless, you're not really going to get away with handing over a diamond, which is manufactured effectively in a microwave in China to your fiancé or to somebody that you really care about for an important occasion. This may well work for some custom jewelry, you're going out to a show or whatever, we've seen this.

You can buy a Rolex watch in the market in Turkey for a couple of hundred dollars. But actually, people buy the real thing.

And I think that's going to become apparent in the diamond industry soon. The salary reduction, yes, I took a 25% -- 30% salary reduction, should I say, I thought that was appropriate.

The CFO was 25%. And so it's scaled down amongst the management.

So let's see, the extent of the salary reduction compared to the 240 lay-off employees, I don't quite know what I'm comparing to. But I think I've answered your question.

Would you buy the shares today? Yes, I think so.

Management has a big stake in the company, and we believe that, that is going to turn around. So those are the questions which are up at the moment, let me move to the next.

Which companies are making a profit in the current diamond market? I don't think any.

We know De Beers has made a $300-odd million loss. Lucara was -- off the top of my head, it was $37 million or something of that order of magnitude, we can look it up.

So Burgundy just announce big losses. So nobody is making a profit in the current diamond market is the answer.

I mean, I'm talking about mining companies. The next question is at what stage would you consider shutting, Letšeng?

Well, no, it's -- we don't consider shutting Letšeng. Letšeng is an extraordinary asset in this industry.

And as I say, we have -- it's unsustainable to keep losing money for much longer. Well, we haven't been losing money for much longer.

The half year, yes, we have shown a loss. Let's see what the future brings.

I think that the question behind this, if I understand you correctly, is does there come a point where you should rather keep the diamonds in the ground than mine them at a loss. And I think that is an important point.

That time does arise if the diamond prices continue dropping, then we will arrive at a point where you cannot keep cutting costs forever. We believe and I'm sure there will be a commentary on this.

We believe we have really gone after this in an aggressive manner. But we are close to where we can no longer expect big numbers when it comes to cost cutting.

We -- you get to a point where you simply cannot cost cut yourself to a profit. So I think that's the answer.

But then you will be deeply in debt if you wait too long. No, we don't believe that's the case.

As we've tried to show you, dollar per carat is $1,000, and our costs are trending below $900 at the moment. So I think that's the answer to that question.

And we certainly aren't deeply in debt. If you -- again, let me just point to other companies in our bailiwick, $300-odd million of debt, $500-odd million of debt of companies of a similar size to us, I think we are well positioned.

We made the point that should anything -- should the prices turn around, and our particular diamonds, and again, I'd like to make that point. We believe we are in the best position to turn around and will -- from a diamond point of view, we will benefit the most from that turnaround.

So I -- it probably sounds very optimistic, but I have to say, ,I'm a realist. I've been around this industry for a very long time, but I am a realist.

And I do think that we will start seeing towards the back end of this year, some price improvement in our favor. As I said to an earlier question, we started to see that in June and July, but that I hope, as I say, well, those early green shoots were dashed by the tariff introduction.

There is a conversation which is going on between the world diamond jewelry association and the U.S. government that diamonds should be exempt from tariffs much like gold is and copper to an extent.

There are no diamond mines in the U.S.A. The U.S.A.

is the biggest consumer of diamond jewelry. And so there is an argument to be made that perhaps this should be considered.

I have no indicators that, that is going to be an outcome. But certainly, those discussions are happening.

And clearly, if such a thing did happen, there would be, I suppose, a mini boom in a sense. But anyway, I remain optimistic but we are not foolish in the sense of continuing to mine the ore body if it can't deliver a profit.

Thank you, everybody. Very happy to take any more questions if anybody would like to put anything up on the screen.

And also, if you wanted to ask something that felt it's more appropriate, not in open session. Don't hesitate to call, to send an e-mail either to myself, to Mike or to Brandon.

I see no more questions coming up. Okay.

Thank you very much, everybody. Appreciate your attention and hope to come and see you next time with much better news.

Thank you, everyone, for your attendance today. Goodbye.