Gemfields Group generated strong auction revenues and pricing for both emeralds and rubies from its 75%-owned Kagem emerald mine, its 75%-owned Montepuez ruby mine and from its brand Fabergé.
Total auction revenues of the JSE- and London-listed miner came to $242 million (R4.5 billion), the second-highest year in Gemfields’ history, despite the withdrawal of November 2023’s auction of higher quality emeralds, an operational update for the six-month period to December 31 said yesterday.
“Kagem experienced a general improvement in both the quality and quantity of premium emeralds recovered in recent months,” the company said.
Gemfields had passed the $2bn milestone in cumulative emerald and ruby auction sales since its first auction in 2009, with more than $400m in taxes being paid to the Mozambique and Zambia governments.
Some 30.15 million carats were produced at the Kagem mine in the six months, while ruby production came to about 1.28 million carats.
The company had net cash of $11.1m before auction receivables of $38.9m, at December 31, 2023.
During 2023, $45m was returned to shareholders by way of May 2023’s $35m dividend and a $10m share buy-back completed in October 2023.
An auction of commercial quality emerald was planned for the first quarter of 2024, followed by a higher quality emerald auction and a mixed quality ruby auction in the second quarter.
The company had held three auctions in the first half of 2023 and taxed profit amounted to $18.14m versus $56.69m a year before. The annual results are expected to be published in March this year.
The Kagem emerald mine in Zambia is believed to be the world’s single-largest emerald producing mine, while the Montepuez ruby mine in Mozambique is one of the most significant recently discovered ruby deposits in the world.
Gemfields also holds controlling interests in various other gemstone mining and prospecting licences in Zambia, Mozambique, Ethiopia and Madagascar.
Gemfields has developed a proprietary grading system and an auction platform to provide a consistent supply of coloured gemstones to downstream markets, a key component of Gemfields’ business model.
Gemfields’ share price traded 1.03% higher at R2.93 yesterday afternoon on the JSE, a price that had declined steadily by more than 21% over the past 12 months from R3.74 on the same day a year before.