In an interim report to shareholders, the gemstone miner reported that it had narrowed its loss in the six months ended December 31, 2009, to £6,4-million, compared with a loss of £186,6-million in the first half of the previous financial year.
Revenues from emerald sales increased by £12,1-million, compared with £344 000 the year before, despite its total emerald and beryl production having declined by 47% to 7,82-million carats, compared with 14,7-million carats the year before.
Emerald production at the company’s only producing gemstone mine, Kagem, had dropped by 46%, owing to a 28% decline in the grade, as well as a 28% decline in the ore mined.
Mascall commented that there were encouraging signs of a sustainable increase in demand for emeralds across all key markets, including from India, China and the Middle East.
Nevertheless, the gemstone miner would continue to limit its capital, project development and exploration expenditure to key projects only.
Gemfields planned to continue expanding the underground mining operations at Kagem by including new target sites, while also expanding the opencast mining activities to new target sites.
Another priority would be the upgrading of its security in an effort to deal with illegal mining activities at the Kagem licence area.
It would also continue to focus on improving its mining efficiencies and reducing its operating costs.
“While Gemfields’ performance has been, and is likely to continue to be, significantly lower than projected at the time of readmission to Aim in June 2008, the goal now is to establish a solid base. A base which will be able to support future growth and profitability in line with improvements in our operating environment,” stated Mascall.
Meanwhile, the gemstone miner was hoping to resolve the issue of the future ownership of its 50%-owned Kariba amethyst mine, in Zambia, by the end of September.
While production had continued at modest levels throughout the past year, a privatisation agreement for Gemfields to buy a further 26% stake in the project remained unsigned by the Zambian government.