Gem Diamonds Limited (LSE:GEMD, OTC:GMDMF) shares fell 15% following a challenging first-half trading update and the announcement of cost-cutting measures.
The company reported a 43% decline in revenue to $44.7 million, with carats sold down 22% to 44,360 and the average price per carat falling 26% to $1,008.
It attributed the drop to continued weakness in global diamond prices, a weak US dollar, and tariff uncertainties.
In response, Gem Diamonds is reducing waste mining volumes and plans to cut around 250 jobs, about 20% of its workforce, alongside corporate cost reductions, including temporary salary cuts for executives.
The company has also relinquished its Ghaghoo mining license, handing the site back to Botswana’s government.
Despite meeting production targets, it revised its 2025 guidance downward but remains committed to its long-term strategy and aims to recover as market conditions improve.
Reacting to the update, Panmure Liberum said: "The measures being introduced should see [Gem Diamonds] navigate the current weak market, without compromising the longer-term mine plan (no resource sterilisation), and the upside potential remains intact."
The broker reiterated its 'buy' call and 30p price target. In early afternoon trading, the stock was off 0.92p at 5.12p.