Gemfields Posts 40% Growth in Gemstone Output

(IDEX Online News) – Gemfields plc recorded a 48.7 percent increase in rough emerald and beryl output during the three-month period ending December 31, 2014. The miner produced 5.8 million carats from its 75 percent-owned Kagem emerald mine in Zambia compared to 3.9 million carats in the corresponding period a year ago.

Total operating costs during the quarter were up 61.1 percent to $11.6 million, largely on account of increased mining activity across the mining license area.

The company held an auction of predominantly highrer quality rough emerald and beryl in Lusaka, Zambia, in November, which generated revenues of $34.9 million. The next Lusaka auction will be of predominantly lower quality rough emerald and beryl in the last week of February.

Meanwhile, the company’s ruby and corundum production from its 75 percent-owned Montepuez mine in Mozambique totaled 3.4 million carats for the period, signifying a 47.8 percent increase year over year. Total operating costs jumped 148 percent to $5.7 million, due to increased mining activity.

The company’s December auction in Singapore of predominantly higher quality rough ruby generated revenues of $43.3 million at an average price of $688.64 per carat, representing the highest ever pirce achieved at any of Gemfields’ auctions.  The next auction of Montepuez production will take place in Jaipur, India, in March and will be of predominantly lower quality rough goods.

The company’s wholly owned Fabergé unit recorded a 12 percent decrease in sales during the period, citing “a material decrease in sales arising from Ukraine and Russia.”  Operating costs for the unit fell 5 percent year over year. Despite losses, however, the company said that it will unveil new high jewelry and time pieces throughout the second half of the fiscal year.

“With a clear focus on increasing the scale of operations across all divisions, including product design and brand positioning at Fabergé as well as exploration and mining activity at both Kagem and Montepuez, quarterly gemstone production was up by more than 40% compared to the same quarter last year, providing Gemfields with another robust production quarter,” said Ian Harebottle, CEO of Gemfields.

“The results of the two auctions held during the quarter – one of emeralds and one of rubies – demonstrated the ongoing firmness in global demand for coloured gemstones and associated jewellery. We remain upbeat about the growth and development of our sector and look forward to the results of our two forthcoming auctions and the various luxury events scheduled to take place over the next few months,” Harebottle added.