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Gemfields, which owns 75 per cent of the Kagem Mine – the world’s largest emerald mine – in Lufwanyama District in partnership with the Zambian government, has revealed very strong first-half financial results, with a 137 per cent increase in revenues to US$65.7 million and a pleasing EBITDA figure for the period of US$18 million.

The company also highlighted that Kagem is now a fully tax paying entity and distributed its first dividend to Zambian Government in December.

Demand for coloured gemstones remained upbeat as clearly indicated by the record per carat prices the company continues to achieve at its auctions in Lusaka.

Financial Highlight 

  • Revenue for the period of US$65.7 million (2012: US$27.7 million);
  • EBITDA for the period of US$18.0 million (2012: US$19.5 million);
  • Net profit after tax for the period US$1.4 million (2012: US$4.7 million);
  • Cash in hand at 31 December 2013 of US$14.8 million (30 June 2013: US$11.2 million); and
  • Estimated cost of inventory at hand, excluding fuel and other consumables, of US$69.3 million (30 June 2013: US$76.3 million).

 Operational Highlights


  • Production summary for 75% owned Kagem Mining Limited (“Kagem”) in Zambia for the period:
    • Production of 10.4 million carats of emerald and beryl (2012: 14.5 million carats);
    • Grade of  267 carats per tonne (2012: 271 carats per tonne);
    • Unit production costs of US$0.85 per carat (2012: US$0.57 per carat). On a cash basis, production costs increased to US$1.32 per carat (2012: US$1.12 per carat); and
    • Cash rock handling unit costs of US$3.52 per tonne (2012: US$3.36 per tonne).
    • Rough sales and auctions:
      • July 2013 auction of predominantly higher quality rough emeralds, held in Lusaka, Zambia, yielded aggregate revenues of US$31.5 million, the second highest aggregate auction revenues achieved to date and with a record average price of US$54.00 per carat;
      • September 2013 auction of traded rough emeralds (not obtained directly from the Company’s own mining operations) yielded US$8.5 million;
      • Kagem finalised a US$3.5 million direct sale in respect of 11,286 kilograms of Kagem’s lowest two grades of beryl in October 2013; and
      • November 2013 auction of predominantly lower quality rough emerald and beryl set records for aggregate revenues at US$16.4 million and unit prices at US$3.32 per carat, a 27% unit price increase over the previous record for similar quality gemstones.
      • In October 2013, the Mines Safety Department of Zambia awarded Kagem a certificate recognising more than 2.8 million reportable injury-free shifts, believed to be a record in the Zambian mining industry; and
      • In December 2013, Kagem paid its first ever dividend of US$8 million, of which US$2 million was paid to the Government of the Republic of Zambia, a 25% shareholder in Kagem.


  • Bulk sampling summary for 75% owned Montepuez Ruby Mining Limitada (“Montepuez”) in Mozambique for the period:
    • Approximately 5.1 million carats of ruby and corundum extracted (2012: 0.16 million carats) taking the total ruby and corundum extracted to 7.0 million carats;
    • Total rock handling was 525,307 tonnes, made up of 232,745 tonnes of ore and 292,562 tonnes of waste (2012: 12,371 tonnes); and
    • Total cash operating costs of US$4.8 million (2012: US$2.0 million); and
    • ‘First-of-a-kind’ comprehensive grading and sorting framework for rough rubies completed, with ongoing refinement.


  • Wholly-owned Fabergé Limited (“Fabergé”) saw revenue derived from sales and sales orders agreed during the key Christmas shopping month of December increased by 89% year-on-year;
  • Robert Benvenuto joined Fabergé as President and COO on 28 October 2013;
  • New advertising campaign entitled ‘The Art of Colour’ unveiled, supporting the Gemfields coloured gemstone strategy; and
  • Preview for long-lead press in October 2013 of “The Fabergé Big Egg Hunt” which is scheduled to take place in New York from 1 to 26 April 2014 in collaboration with leading artists and designers, and which will see up to 300 egg sculptures displayed throughout the city to raise funds for charities ‘Studio in a School’ and ‘Elephant Family’.


  • Partnership with Mila Kunis enjoyed increased visibility during the period, with the advertising campaign running from March to December 2013 in luxury consumer titles, digital and trade publications in the UK, US, India, South Africa and Zambia;
  • Mila Kunis wore jewellery featuring Gemfields emeralds at premieres and film festivals;
  • International promotional initiatives implemented with retailers Couture Lab, Stone & Strand, and Stephen Webster; and
  • Gemfields worked alongside Thames & Hudson in the promotion of its recently published book, ‘Emerald’.

Outlook and post reporting period events

  • Successful high quality emerald auction held in Lusaka, Zambia, in February 2014 achieving record revenues of US$36.5 million and record average price per carat of US$59.31;
  • An additional emerald auction and our first ruby auction are scheduled for the second half of the financial year ending 30 June 2014;
  • Revenues at Fabergé, derived from sales and sales orders agreed during the month of January continued the trend experienced in December 2013, showing an increase of 198% year-on-year;
  • Other key Fabergé events for the second half of the financial year are:
    • Presentation of some of our newest jewellery collections at the ‘Doha Jewellery and Watches Exhibition’ from 24 February to 2 March 2014 at the Qatar National Convention Center in the Qatari capital was well received; and
    • “The Fabergé Easter” promotional and sales event scheduled to take place from 1 to 21 April 2014 in the world famous Harrods department store, where Fabergé will be well represented in addition to its existing retail footprint via an exclusive salon and added exhibition space; and
    • The “mine and market” strategy continues to gain traction as is evidenced by the record prices achieved at the recent auctions.

Ian Harebottle, CEO of Gemfields, commented:

“Gemfields has delivered a very strong first half with a 137% increase in revenues to US$65.7 million and a pleasing EBITDA figure for the period of US$18 million. We have absorbed not only the increased cash requirements from our more recent growth projects, but also the fact that Kagem is now a fully tax paying entity and has distributed its first dividend to our partners in Kagem, the Government of the Republic of Zambia. Demand for coloured gemstones remained upbeat as is clearly indicated by the record per carat prices we continue to achieve.

Production at our Kagem mine in Zambia performed to expectations and the inclusion of Fabergé into the Gemfields group has seen the levels of our inventory stock reach US$69 million. In Mozambique, our bulk sampling programme at our Montepuez project had an excellent first half producing over five million carats of rubies and corundum. As a result, our strategy of offering rubies to our customers via our auction platform remains on track for the second half of this financial year.

Gemfields’ next chapter as a leading producer, marketer and retailer of emeralds, rubies and other precious coloured gemstones is set to be accelerated in the short term and we look forward to building on our successes to date, underpinned by our broadening footprint, encouraging consumer demand  and our exceptional team, to whom I am eternally grateful.”

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