Gemfields – recalibrating supply for a softer market

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The company delivered results in line with expectations and is positioning itself for further growth.

White diamonds versus coloured gemstones

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We publish courtesy of The National
Author: Harvey Jones

Dev Shetty, chief operating officer at Gemfields, the world’s largest producer of coloured gemstones, says the coloured gemstones market is young and fast-growing.

“Diamonds are a rare commodity, but emeralds are 20 times rarer than diamonds,” he says.

Gemfields mines and markets Zambian emeralds and amethysts and Mozambican rubies, and will soon start mining sapphires in Sri Lanka. Mr Shetty says while the South African miner De Beers Group’s brilliant marketing push in the 1960s and ‘70s was hugely successful in building the white diamond market, retail prices have flattened in recent years.

“Diamonds are a mature market with a 200-year history, whereas coloured gemstones marketing only really started in earnest five years ago. Unlike diamonds, the pricing matrix isn’t as defined, but prices are growing rapidly. In July 2009, our high-quality rough emeralds were selling at an average of $4.40 per carat at auction. Now they fetch closer to $59 per carat.”

This means you can get started with much smaller sums of money than in the white diamond market. But you can also spend big. This month, Sotheby’s in Geneva sold an 8.62-carat Burmese ruby for $8.6 million, a record $997,727 per carat.

In 2011, the same auction house sold a 12.01-carat Colombian emerald for $1.44m, nearly $119,000 per carat. By comparison, the most expensive ever white diamond, a 118-carat piece, sold for more than $30m at Sotheby’s in Hong Kong last year, at $254,143 per carat.

“Collectors are investing significant money in coloured gemstones,” says Mr Shetty. “We are working hard to create support and demand, boost consumer awareness and develop the market.”

Gemfields plans to open a sales office in Dubai next year, selling coloured gemstones directly to jewellery manufacturers, retailers and private investors. Wherever you buy gemstones, you must get the right certification, key to protecting your investment.

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Gemfields falls 27% as Zambia imposes ban on gemstones sales

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Source: MINING

Author: Cecilia Jamasmie

Precious stones miner Gemfields (LON: GEM), the world’s biggest emerald producer, said theZambia government’s ban on overseas auctioning of gemstones would hurt revenue at its flagship Kagem emerald mine in north Zambia.

Shares in the company plummeted as much as 27% on the news, hitting the steepest decline in more than four years.

“Gemfields believes that any outright limitation on selling emeralds in other countries could have the potential to materially constrain Kagem’s revenues,” the company said in a written statement Monday.

The company, which currently sells its emeralds at auctions in Singapore and India, produced 21 million carats of the precious stones from its Kagem mine last year. Gemfields said it has written to Zambia’s minister of mines, energy and water development to request clarification of the terms of the new measures.

Emerald production from Kagem has been sold exclusively outside Zambia since 2009, generating $160 million of revenue from 11 auctions abroad.

Kagem had revenue of $77.6 million in 2012, compared with $8.8 million in 2008, when Gemfields acquired the mine.

The ban would also affect Gemfields’ Kariba amethyst mine in south Zambia, in which the company has a 50% stake, the firm said.

GEMFIELDS PLC – July 2010 Auction Results and Operational Update

We  publish courtesy of istockanalyst.com

Jul. 28, 2010 (PR Newswire UK Disclose) -- Gemfields PLC
July 2010 Auction Results and Operational Update

London: Gemfields PLC ("Gemfields" or "the Company", Ticker "GEM") is pleased to present the results of its July 2010 rough emerald auction as well as an

operational update for the three month period ending 30 June 2010. All figures are unaudited. Highlights July 2010 rough emerald auction realises sales of USD 7.5 million, the highest auction revenue to date. Demand for Zambian emeralds, and more specifically Gemfields' Kagem emeralds, has seen a steady increase across all sectors over the past year. Per carat prices improved 83% over the last auction of higher quality material held in November 2009. Four auctions held since July 2009 generated revenues totalling USD 26.2 million. Quarter ending 30 June 2010 saw solid production volumes, good grades and the lowest quarterly unit production costs achieved to date. The year ending 30 June 2010 saw Kagem's operating costs fall 42%, with gemstone production down just 38%, representing real achieved economies of scale. Graphical production update available at http://www.gemfields.co.uk

Emerald and Beryl Auctions
Gemfields held an auction of (predominantly higher quality) rough emeralds in London from 19 to 23 July 2010. The auction was attended by 37 companies drawn
from India, Israel, Germany and the United States. The auction saw 0.85 million carats offered, with 0.80 million carats being sold, raising USD 7.5 million.
Gemfields has now completed 4 auctions in the past 13 months, realising revenues totalling USD 26.2 million.
The results of the July 2010 auction are summarised below, together with those from the previously published auctions held in London, Johannesburg and Jaipur:

   AUCTION RESULTS      JULY '09     NOVEMBER '09     MARCH '10     JULY '10  
       SUMMARY          AUCTION         AUCTION        AUCTION      AUCTION   

Dates                  20-24 July   23-27 November   11-15 March   19-23 July 
                          2009           2009            2010         2010    

Location                London,      Johannesburg,     Jaipur,      London,   
                        England      South Africa       India       England   

Type                     Higher     Higher Quality      Lower        Higher   
                        Quality                        Quality      Quality   

Carats offered        1.36 million   1.12 million       28.90     0.85 million
                                                       million                

Carats Sold           1.36 million   1.09 million       22.80     0.80 million
                                                       million                

No. of companies           23             19              25           37     
placing bids                                                                  

Average no. of bids        10             13              8            18     
per lot                                                                       

No. of lots offered        27             19              56           27

Gemfields sets records with USD 7.2 million sale at rough emerald and beryl auction

It was largest auction for Gemfields in terms of sales, and weight of gemstones sold

This article has been published courtesy of: Diamond World

Gemfields PLC had organised its first rough emerald and beryl auction for this year, in Jaipur, India, between 11-15 March 2010, and the auction has turned out to be a record breaking event for the company. The auction was orchestrated by Gemfields’ Product Director Adrian Banks.

Altogether 28.9 million carats of principally lower quality rough emeralds and beryl were offered in 56 separate lots at the auction. This was the largest auction for Gemfields in terms of sales realised and weight of the gemstones sold. Also, the sales figures at the auction amounted to USD 7.2 million, with 89 percent (by value) of material sold, which was also considered a world record in terms of the volume of Zambian emerald and beryl on offer by weight (with 5.78 tonnes of material on offer). Twenty-five companies from India attended the auction, which indicated a healthy consumer participation and product demand, underlining the strengthening of the emerald market.

Ian Harebottle, CEO of Gemfields, commented: “Gemfields is pleased to have delivered a successful auction at the start of the Indian IPL cricket season, demonstrating that the emerald pipeline from Zambia through to the end consumer is showing a steady increase in demand. Jaipur marked our first low grade auction and the improvement in market sentiment was palpable. We were particularly pleased to further cement our relationships with our various customers, laying the path for Zambian emeralds to take the lead in the supply of ethical gemstones of guaranteed provenance. The popularity of Zambian emeralds was reinforced by the bespoke 46664 Nelson Mandela bracelet worn by Morgan Freeman at last week’s Oscars.”

Gemfields sets undisclosed reserve prices for each lot in advance of its auctions where participation is by invitation only. Gemfields has undertaken marketing efforts to promote the Zambian emeralds, which has even resulted in celebrities like Morgan Freeman wearing them at the Academy Awards in bespoke Nelson Mandela “46664” bracelets.

Gemfields looking at beneficiation in Zambia

JOHANNESBURG (miningweekly.com) – In the year ahead, Aim-listed Gemfields plans to open a rough gemstone trading business, in Kitwe, in Zambia, as well as establish a trial cutting facility at its Zambian Kagem mine to determine the feasibility of local beneficiation, chairperson Graham Mascall said on Wednesday.

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.

KARIBA OWNERSHIP

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.

courtesy of: Miningweekly