Gemfields revenues up despite fall in emerald output

Gemfields’ first half revenues rose despite production of emeralds by its 75%-owned Kagem Mining in Zambia totalled 3.9 million carats of emerald and beryl in the three months to the end of December – down from 6.6 million carats a year ago.

Unit production costs were $1.17 per carat versus $0.66 per carat in the 2012 quarter. On a cash basis, production costs increased to $1.76 per carat versus $1.16 last time.

Cash rock handling unit costs increased by less than 1% (well below the national inflation rate) to $3.46 per tonne versus U$3.43 per tonne in the 2012 quarter.

The company’s 75%-owned Montepuez Ruby Mining in Mozambique extracted 2.3 million carats of ruby and corundum in the quarter during the ongoing bulk sampling operation versus 0.16 million carats in the 2012 quarter. This took the total ruby and corundum extracted at Montepuez to 7.0 million carats.

Total rock handling was 288,746 tonnes, made up of 150,941 tonnes of ore and 137,806 tonnes of waste (versus 12,371 tonnes in the quarter to 31 December 2012).

Gemfields’ first ruby auction is expected to occur before 30 June.

Gemfields’ wholly-owned Fabergé Ltd saw revenue derived from sales booked during the key Christmas shopping month of December increase by 89% year-on-year.

Revenue derived from sales booked during the quarter ending 31 December 2013 increased by 26% compared to the same quarter in the prior year.

On a corporate basis, Gemfields said revenues from auctions and the direct sale of beryl during the first six months of the financial year to 31 December totalled $59.9m, surpassing by 24% the all-sources revenue of $48.4m achieved in the full financial year to 30 June 2013.

Chief executive Ian Harebottle said: “Gemfields is pleased to report on another quarter of solid progress. With our first-half revenues comfortably exceeding our prior full year figure, we look forward to the two forthcoming emerald auctions and the first auction of rough rubies from Montepuez all to be held before the end of June this year.

“While Kagem experienced reduced production this quarter – demonstrating the characteristic grade volatility in coloured gemstone mining – we are confident that this will improve in the near term. We were extremely pleased with the record-setting emerald auction held in Lusaka, Zambia in November2013 and are buoyed by the ongoing increase in global demand for emeralds and other coloured gemstones – much of which is a direct result of Gemfields’ concerted marketing efforts.

“The concrete progress being made at Fabergé is evident in the robust December sales growth and we are delighted to welcome Robert Benvenuto as president & COO of Fabergé. His long-standing experience in the sector and at Harry Winston is clearly already bearing fruit.”

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