GEMFIELDS RAISES RECORD US$36.5M IN LUSAKA HIGHER QUALITY EMERALD AUCTION

GEMFIELDS RAISES RECORD US$36.5M IN LUSAKA HIGHER QUALITY EMERALD AUCTION

 

Deputy Minister of Mines, Energy and Water Development Hon. Charles Zulu receives a copy of a book on emeralds from Ian Harebottle, CEO of Kagem Mining and Gemfields Plc
Deputy Minister of Mines, Energy and Water Development Hon. Charles Zulu receives a copy of a book on emeralds from Ian Harebottle, CEO of Kagem Mining and Gemfields Plc

The following statement was issued by Gemfields plc via the London Stock Exchange’s Regulatory News Service this morning:

Gemfields plc

(“Gemfields” or the “Company”)

Results – Lusaka Rough Emerald and Beryl Auction

Gemfields plc (AIM: GEM) is pleased to announce the results of its auction of predominantly higher quality rough emerald and beryl held in Lusaka, Zambia from 21 to 25 February 2014.

Highlights

  • Auction revenues of USD 36.5 million, a record for any Gemfields auction;
  • Average price of USD 59.31 per carat, a 10% increase on the previous Kagem auction record;
  • Of the 0.84 million carats offered, 0.62 million carats were sold;
  • Fifteen Kagem auctions held since July 2009 have generated USD 260 million in total revenues;
  • Financial year-to-date auction revenues (including one auction of traded material) stand at USD 92.9 million; and
  • Including a direct sale of the two lowest grades of beryl, total revenues in the financial year-to-date from rough emerald and beryl sales have reached USD 96.4 million, marking a record revenue year for Gemfields.

A total of 34 companies attended and bid in what was the third auction during the current financial year of gemstones mined by Gemfields from the Kagem emerald mine in Zambia.

The auction saw 0.84 million carats of emerald and beryl extracted from Kagem placed on offer, with 15 of the 17 lots offered being sold, generating record auction revenues of USD 36.5 million.

The auction yielded an overall average value of USD 59.31 per carat, a 10% increase on the prior record for Kagem auctions. Market conditions for higher qualities remain robust, yielding solid increases in quality-for-quality per carat prices.

Aggregate auction revenues for the financial year-to-date (which ends 30 June 2014) – and inclusive of the Jaipur auction of traded emeralds – stand at USD 92.9 million. Adding a direct sale of the two lowest grades of beryl, total revenues from the sale of rough emerald and beryl have reached USD 96.4 million. As such, Gemfields has exceeded its record annual revenue figure of USD 83.7 million, set in the year ending 30 June 2012. Two further auctions are presently scheduled to take place before the end of the financial year including the inaugural auction for rough rubies and corundum from the Montepuez ruby deposit in Mozambique.

The Company’s fifteen auctions of emeralds and beryl mined at Kagem since July 2009 have generated USD 260 million in aggregate revenues. In addition, the Company ran an auction of traded rough emeralds (emeralds obtained by Gemfields in the open market from various sources and excluding emerald or beryl mined, processed, graded and exported by, or belonging to, Kagem Mining Limited) in Jaipur, India in September 2013, yielding gross auction revenues of USD 8.5 million.

The results of the nine higher quality Kagem auctions held to date are summarised in the two tables below:

AUCTION RESULTS  (HIGHER QUALITY)Table 1 of 2 JUL ’09 AUCTION NOV ’09 AUCTION JUL ’10 AUCTION DEC ’10 AUCTION   JUL ’11 AUCTION   MAR ‘ 12 AUCTION
Dates 20-24 Jul ‘09 23-27 Nov ‘09 19-23 Jul ‘10 6-10 Dec ‘10 11-15 Jul ‘11 19-23 Mar ‘12
Location London, UK Johannesburg, SA London, UK Johannesburg, SA Singapore Singapore
Type Higher Quality Higher Quality Higher Quality Higher Quality Higher Quality Higher Quality
Carats offered 1.36 million 1.12 million 0.85 million 0.87 million 1.07 million 0.77 million
Carats Sold 1.36 million 1.09 million 0.80 million 0.75 million 0.74 million 0.69 million
No. of companies placing bids 23 19 37 32 38 29
Average no. of bids per lot 10 13 18 16 16 11
No. of lots offered 27 19 27 19 25 23
No. of lots sold 26 14 24 18 18 20
Percentage of lots sold 96% 74% 89% 95% 72% 87%
Percentage of lots sold by weight 99.8% 97% 94% 86% 69% 89%
Percentage of lots sold by value 82% 76% 87% 99% 91% 94%
Total sales realised at auction USD 5.9 million USD 5.6 million USD 7.5 million USD 19.6 million USD 31.6 million USD 26.2 million
Average per carat sales value USD 4.40/carat USD 5.10/carat USD 9.35/carat USD 26.20/carat USD 42.71/carat USD 38.25/carat

 

AUCTION RESULTS 

(HIGHER QUALITY)

Table 2 of 2

 

NOV ’12 AUCTION

 

 

JUL ’13 AUCTION

 

 

FEB ’14 AUCTION

 

Dates

29 Oct – 2 Nov ‘12

15-19 Jul ‘13

21-25 Feb ‘14

Location

Singapore

Lusaka

Lusaka

Type

Higher Quality

Higher Quality

Higher Quality

Carats offered

0.93 million

0.58 million

0.84 million

Carats Sold

0.90 million

0.58 million

0.62 million

No. of companies placing bids

35

36

34

Average no. of bids per lot

11

8

13

No. of lots offered

19

18

17

No. of lots sold

16

18

15

Percentage of lots sold

84%

100%

88%

Percentage of lots sold by weight

98%

100%

74%

Percentage of lots sold by value

90%

100%

86%

Total sales realised at auction

USD 26.8 million

USD 31.5 million

USD 36.5 million

Average per carat sales value

USD 29.71/carat

USD 54.00/carat

USD 59.31/carat

 

The specific auction mix and the exact quality of the lots offered at each auction vary in characteristics such as size, colour and clarity on account of mined production and market demand. Each auction is thus made up of somewhat differing overall quality compositions.

For ease of reference, the results of the six lower quality Kagem auctions held to date are summarised below:

 

  AUCTION RESULTS (LOWER QUALITY)

MAR ’10 AUCTION

MAR ’11 AUCTION

NOV ’11

AUCTION

JUN ’12

AUCTION

APR ’13

AUCTION

NOV ’13

AUCTION

Dates

11-15 Mar 2010

10-14 Mar 2011

21-25 Nov ‘11

9-13 Jun ‘12

15-19 Apr ‘13

11-15 Nov ‘13

Location

Jaipur, India

Jaipur, India

Jaipur, India

Jaipur, India

Lusaka, Zambia

Lusaka, Zambia

Type

Lower Quality

Lower Quality

Lower Quality

Lower Quality

Lower Quality

Lower Quality

Carats offered*

28.90 million

16.83 million

10.83 million

10.85 million

17.34 million

5.62 million

Carats Sold

22.80 million

12.98 million

9.82 million

3.47 million

6.30 million

4.94 million

No. of companies placing bids

25

44

27

20

25

20

Average no. of bids per lot

8

14

9

3

6

7

No. of lots offered

56

35

26

33

28

21

No. of lots sold

49

34

19

17

23

19

Percentage of lots sold

88%

97%

73%

52%

82%

90%

Percentage of lots sold by weight

79%

77%

91%

32%

36%

88%

Percentage of lots sold by value

89%

99%

80%

60%

76%

91%

Total sales realised at auction

USD 7.2 million

USD 10.0 million

USD 11.0 million

USD 9.0 million

USD 15.2 million

USD 16.4 million

Average per carat sales value

USD 0.31/carat

USD 0.77/carat

USD 1.12/carat

USD 2.61/carat

USD 2.42/carat

USD 3.32/carat

        * A larger volume of material was placed on offer in March 2010 following Gemfields extensive inventory building exercise during 2008 and 2009.

Ian Harebottle, CEO of Gemfields, commented:

“Gemfields has now completed four successful auctions in Zambia, all during the last eleven months. We have achieved two new records – the highest aggregate revenue and the highest average per carat price.

 Our commitment to our vision for precious coloured gemstones, our operational investments, the acquisition of Fabergé and our ever expanding international marketing endeavours are clearly furthering the momentum we have built during the last five years. Zambia’s role in the global emerald market has never been more important, with Zambian emeralds now favoured by many as the emerald of choice.

 Taking into account the four auctions held thus far this financial year, being one auction of traded material and three of material mined at our Kagem mine, Gemfields’ year-to-date auction revenues now stand at USD 92.9 million, with total sales from rough emerald and beryl having reached USD 96.4 million. This means we have, with four months and two further auctions remaining in this financial year (including our inaugural auction of rough rubies and corundum from Montepuez in Mozambique), already beaten Gemfields’ best ever revenue year.”

Gemfields plc is the leading coloured gemstone miner listed on the AIM market of the London Stock Exchange (ticker: GEM). The Company’s principal asset is the 75% owned Kagem emerald mine in Zambia, the world’s single largest emerald mine. In addition to the Kagem emerald mine, Gemfields has a 50% interest in the Kariba amethyst mine in Zambia.

In July 2009 Gemfields commenced a formal auction programme for Zambian emeralds mined at Kagem. To date, the Company has held 15 auctions which have generated revenues totalling USD 260 million.

The Company also owns a 75% stake in the highly prospective Montepuez ruby deposit in Mozambique and licences in Madagascar including ruby, emerald and sapphire deposits.

Gemfields acquired the Fabergé brand in January 2013 with a view to creating a globally recognised coloured gemstone champion. Fabergé provides Gemfields with direct control over a high-end luxury goods platform and a global brand with exceptional heritage.