Gem Diamonds announces resource increase at S. Kalimantan mine

London Stock Exchange-listed diamond miner Gem Diamonds Limited said on Thursday that resource at its Cempaka mine in South Kalimantan had been increased from the previously estimated total diamond resource of 1.3 million to 2.6 million carats.

The company also reported that level of confidence in this deposit has improved with reserves increased from 1.8% to 8.6% of the resource. The company did not reveal the reason for the increase.

“This resource increase lends support to the company’s plans to initiate mass mining operations at Cempaka. In this regard specialist consultants were engaged to investigate the feasibility of dredging and a decision on the most appropriate mining method is expected to be made by the end of the financial year,” the company said.

The company also said US$16 million was being invested initially on Cempaka mine to improve mining efficiencies, infrastructure and plant, to allow production to ramp up to 80 000 bcm per month.

Gem Diamonds acquired BDI Mining Corp., the owner of Cempaka mine in May this year. The company said during the first half of 2007, Cempaka only produced a low 8, 441 carats due to previous owner’s lack of working capital. (alex)