The release of the firm's financial results for the six months ended December at the weekend was overshadowed by doubts about its ability to continue operating as a going concern.

The group said its ability to maintain sufficient liquidity and in the medium term continue as a going concern depended on the successful conclusion of the proposed Ifa Lesizwe transaction.

The group was selling 50% of its issued shares to empowerment group Ifa Lesizwe for R50m.

'It is the board's opinion that this transaction will be successfully completed,' said the group.

'Should this transaction not be concluded successfully, it will constitute a material uncertainty which may cast doubt (on) the ability of the firm to realise assets and settle its liabilities in the normal course of business,' it said.

The interim results for the six months ended December show the group has reduced its headline losses a share from 4,3c of the previous comparable six months period to 0,3c.

Loss before taxation came at about R1m down from R14,1m and finance charges were quoted at R611000.

Revenue was R1,4m down from R5,2m against operating expenses of about R1,5m from R14,9m. The group has sold most of its property assets, and was now pursuing mining interests via some mining rights.

Gilboa said it had reached an agreement with mining engineering group Bateman to start the development of the diamond deposits of the Rooiwal Bay area on Namagroen concession 8a on the west coast of SA.

It said the intention was for Bateman to invest a sum not exceeding R5m in form of a loan to a new Gilboa subsidiary, Gilboa Diamonds/Rooiwal Bay.

Bateman would also have a 50% share in this operation. The Bateman deal is subject to Gilboa injecting the same funding into Rooiwal Bay as Bateman. Gilboa's share closed at 6c on the JSE Securities Exchange SA on Friday.