Gemfields share price shines despite Covid-19 pressure on operations

Gemfields, the UK-headquartered company that specialises in producing coloured gemstones, flagged that the financial results for the six months to June would be robust. Photo: File

Gemfields, the UK-headquartered company that specialises in producing coloured gemstones, flagged that the financial results for the six months to June would be robust. Photo: File

Published Jul 12, 2021

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GEMFIELDS, the UK-headquartered company that specialises in producing coloured gemstones, flagged that the financial results for the six months to June would be robust.

Gemfields, which owns the Kagem emerald mine in Zambia and the Montepuez ruby mine in Mozambique, said on Friday that it was not aware of the reasons its share price had climbed since the beginning of the month. The share has surged by 35.56 percent in the past seven days. It closed 2.56 percent higher at R2.50 a share on the JSE on Friday.

“The company notes the recent spike in its share price and confirms that there is no disclosable unpublished price-sensitive information relating to the company at the present time,” said Gemfields.

Guernsey-registered Gemfields reported that operations in both Mozambique and Zambia remained materially uninterrupted, and said it expected revenue to be in the region of $95 million (R1.35 billion) for the six months ended June 2021.

“The company is closely monitoring the global Covid-19 situation and presently expects to hold three further gemstone auctions this year,” said the group.

Kagem and Montepuez were reopened during the six months ended June after being suspended in March last year.

“The company expects to announce robust financial performance for the six months ending June 30, 2021, as a result of the strength of gemstone auctions held in March and April 2021, combined with the cost-cutting measures which were in place until end March 2021, including the suspension of principal operations at its emerald and ruby mines,” said Gemfields.

The group was brought to its knees in 2020 due to the Covid-19 pandemic. It swung to a $93m annual loss during the year ended December 2020 compared with the $39.1m profit a year earlier.

Revenue fell to $34.5m from $216.2m in 2019. Gemfields said while it welcomed the increase in the price, the stock still traded at a significant discount to its net asset value.

At its virtual AGM last month, shareholders rejected a resolution which would have granted the company’s board consent to issue, at its discretion, up to 5 percent of the company’s share capital at the higher of R3 a share and the then-prevailing 30-day volume-weighted average price

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