Gemfields announces Interim Report
Brian Gilbertson, Chairman-Gemfields says at the occasion of Interim report, now given that we have put to bed the myriad of administrative matters necessary for completing the reshaping of the Company, our team has been focussing on what Gemfields does best: supplying precious coloured gemstones from Africa to global markets.
The first six months of 2019 have seen Gemfields Group Limited (GGL) deliver profitable but varied performance. When compared with the first half of 2018, total rock handling has increased by some 20%, but the recovery of emeralds and rubies in the premium category has fallen by approximately 37% as we navigate areas yielding lower premium carat grades, particularly in respect of rubies.
Flagship operations in Mozambique and Zambia generated revenues of US$50.0 million and US$33.2 million, respectively, in contrasting market circumstances. The clients of our emerald auctions, predominantly in Jaipur, India, continued to experience difficulties in accessing finance in their home market. In addition, we have seen our competitors selling their Zambian emeralds in the market at artificially low prices, whereas we have retained auction lots that we believe deserve higher prices than those presently offered by the market.
There are, however, encouraging signs of recovery and new customers have appeared at our emerald auctions, among them one of our well-established ruby customers, Chatree Gems of Thailand, which successfully participated in its first Gemfields emerald auction in Singapore in May. We continue to experience strong demand for our Mozambican rubies, with one lot at the June auction setting a new, all-time price-per-carat record for any Gemfields auction.
Kagem Mining Limited (Kagem) continues its robust run of emerald recovery – albeit at somewhat lower levels than in the first half of 2018 – with production in the premium emerald category reaching 80,900 carats and overall production amounting to 15.6 million carats in the first six months of 2019. Progress continues to be made on the amalgamation of Mbuva-Chibolele and other wholly owned Zambian licences into our 75%-owned
Kagem operation in order to create a larger company with greater economies of scale that is better equipped to smooth out volatile qualities and grades by having a larger number of operating pits.
Production at Chibolele for the period was 3.0 million carats, thus supporting the encouraging signs observed to date at that operation. Montepuez Ruby Mining Limitada production during the same period was largely unaffected by cyclones Idai and Kenneth, delivering 1.1 million carats, of which just 34,500 carats were in the premium ruby category.
Due to the nature of coloured gemstone geology, it is common to experience considerable volatility of both grade and quality and our team remains confident that premium grade ruby production will improve from the muted levels experienced during the first half of the year. More can find in the detailed published!
