We are exceptionally pleased that in 2019 the extension of our mining lease was agreed upon with the Government of the Kingdom of Lesotho. The renewal commits to a ten-year extension of the lease, until 2029, with the exclusive right at that stage to extend the lease for a further ten years.

From a sustainability point of view, this is an invaluable achievement as it allows us to make forward-looking business decisions. It also provides us with a firm endorsement of Gem Diamonds’ established economic and social contribution to the country. 

The renewed lease stipulates a revised approach to corporate social investment (CSI) spending, with an annual contribution set at M5m or 1% of dividends, whichever amount is higher. The license-renewal agreement also makes provision for windfall contributions arising from the discovery of exceptional stones, as took place after the discovery of the 910 diamond in 2018. The contribution from that diamond funded the 910 project, which, following extensive community consultation, took the form of support for an egg-production and distribution project.

This revised CSI framework allows us to expand and formalise our investment programme. Our CSI focus has, for many years, been on community-directed initiatives to ensure sustainability post the life of our mines. From 2020, we’ll be adopting rolling five-year CSI cycles, allowing for greater forward-planning. We will also be expanding our support to an additional region, Thaba-Tseka, which is one of the most impoverished areas in Lesotho. Our support there is anticipated to have a profound impact.

In my view, it’s our commitment to impact, not process. That shift in mindset requires humility, patience and understanding. But first and foremost, it requires an ability and willingness to communicate; to listen and not just to talk.

We listen to those we know are affected by our actions, and we take time to understand the barriers they're facing and the root causes of the issues we're attempting to mitigate or address. This commitment to real communication and a willingness to learn are both traits that I see again and again amongst Gem Diamonds’ employees.

On our GDL CSI sub-committee, we have two community representatives, elected by our communities. Our CSI manager at the mine holds bi-annual community gatherings for those in the surrounding area to give their input on social matters. Board and management make frequent visits to our site to ensure transparent communication, and that the needs and concerns of local stakeholders are taken seriously.

From a health and safety perspective, our performance over the year was not what we, as those charged with governance and oversight of this area, would deem acceptable. Tragically, we experienced a fatality during the year, along with seven lost-time injuries, resulting in an unacceptable increase in the severity of our safety incidents.

This is concerning. In light of this, we’ve done much work to implement safety improvement plan. After a detailed examination of the incident reporting and following in-depth investigations on the ground, we’ve realised that progress needs to be made in terms of culture and compliance, which doesn't change overnight. We have, with this in mind, put in place detailed, actionable, and comprehensive measures to urgently improve this performance in the future.  

Without in any way marginalising the seriousness of those incidents, it is worth noting, however, that 2019 also saw a reduction in our overall injury frequency rate to its lowest value ever, which we believe is a result of the safety processes we have already put in place. We had fewer injuries of any sort than ever before. Clearly, however, more needs to be done to prevent the severity of the injuries we have seen.

Our relationships and communication with our communities remain strong. We had no significant or major community complaints in 2019. We remain aware of the importance of consistent, proactive communication and reaching a real understanding of community needs and concerns.

The drought in Lesotho reached critical proportions in 2019, reminding us that not even the world's most water-rich nations are inoculated against the effects of climate change. While we were able to assist local communities with access to our water resources during the year, we realise that we need to integrate planning of this nature into our resource-management strategy going forward.

From 2020, we’ll be adopting six United Nations Sustainable Development Goals (UN SDGs) at a time in rolling three-year cycles in order to integrate business-wide approaches to their support. One of the first SDGs adopted in this manner will be UN SDG 6: Sustainable Management of Water and Sanitation. It’s our hope that thinking about the issue in a broader context will assist us in putting in place plans and measures that allow us to offer continued support in a holistic manner, and in co-ordination with the emergency response plans of the Lesotho Government.

A vast amount was done in 2019 in terms of proactive dam safety management. Piezometers were installed in the Patiseng tailings storage facility (TSF), which gives us useful insight into water pressure and seepage. We saw some slumping in the TSF that our external auditor decided required a change in slopes – which we adhered to given our uncompromising focus on dam safety. The good news is that these reduced slope angles mean we can begin the rehabilitation process earlier than we originally anticipated.

We’re satisfied with our dam-safety processes thus far, believing we have gone above and beyond to ensure we’re not only compliant but in line with international best practice. We've not only gone to great lengths to ensure that our dams are safe, but have the infrastructure in place to let us know if they become unsafe and to ensure we’re prepared in the event of a catastrophe.

I want to thank Johnny Velloza and the rest of the Board for their support. I'd also like to thank our employees on the mine for their hard work in a harsh climate. And finally, I'd like to thank Danielle Kriel, our Group Health, Safety, Corporate Social Responsibility and Environmental Superintendent, for the work she has done to position Gem Diamonds as a world leader in terms of our approach and commitment to sustainability.