Source - RNS
RNS Number : 2703L
Gemfields PLC
30 September 2016
 

Gemfields plc

("Gemfields" or "the Company")

Results - Jaipur Emerald and Amethyst Auction

30 September 2016

 

Gemfields plc (AIM: GEM) is pleased to announce the results of its auction of predominantly commercial quality rough emerald extracted by Kagem Mining Ltd (which is 75% owned by Gemfields and 25% by the Government of the Republic of Zambia) in Zambia.

 

The auction also included higher quality amethyst from Kariba Minerals Ltd in which Gemfields has a 50% interest, with the balance also belonging to the Government of the Republic of Zambia and with the revenues and royalties being similarly treated.

 

The auction, at which no beryl was placed on offer, was held in Jaipur, India, from 26 - 29 September 2016.

 

 

Highlights - Emerald Auction

 

·     Auction revenues of USD 10.7 million;

·     A robust USD 3.28 per carat for the specific auction mix offered;

·     Of the 4.05 million carats offered for sale, 3.27 million carats were sold (81%); and

·     23 Kagem auctions held since July 2009 have generated USD 437 million in total revenues.

 

Highlights: The Amethyst Auction

 

·     Auction revenues of USD 0.4 million;

·     The average realised price was 3.73 US cents per carat; and

·     Of the 13.6 million carats offered for sale, 11.6 million carats were sold (86%).

 

 

The Kagem Emerald Auction

 

A total of 30 companies placed bids in Gemfields' first auction of Kagem production in the current financial year.

 

The auction saw 4.05 million carats of commercial quality emerald extracted from Kagem placed on offer, with 15 of the 19 lots offered being sold, generating auction revenues of USD 10.7 million. The auction realised a pleasing overall average value of USD 3.28 per carat, a robust figure considering  the specific quality mix of goods placed on offer at the auction.

 

The Company's 23 auctions of emeralds and beryl mined at Kagem since July 2009 have generated USD 437 million in total revenues. The proceeds of this auction will be fully repatriated to Kagem Mining Ltd in Zambia, and with all royalties due to the Government of the Republic of Zambia being paid on the full sales prices achieved at the auction.

 

The results of the five most recent commercial quality Kagem auctions are summarised in the table below. Additional historic information regarding auctions of similar quality goods can be found in the 'Further Information' section of this announcement:

 

 

 

 

 

 

AUCTION RESULTS 

(COMMERCIAL QUALITY)

 

AUG '14 AUCTION

FEB '15 AUCTION

NOV '15 AUCTION

MAY '16 AUCTION

SEP '16 AUCTION

Dates

5-8 Aug 2014

24-27 Feb 2015

18-21 Nov 2015

17-20 May 2016

26-29 Sep 2016

Location

Lusaka, Zambia

Lusaka, Zambia

Jaipur, India

Jaipur, India

Jaipur, India

Type

Commercial Quality

Commercial Quality

Commercial Quality

Commercial Quality

Commercial Quality

Carats offered

12.11 million

10.13 million

5.07 million

3.67 million

4.05 million

Carats Sold

11.58 million

3.90 million

4.45 million

 2.78 million

 3.27 million

No. of companies placing bids

21

21

29

26

30

Average no. of bids per lot

7

5

6

7

7

No. of lots offered

21

26

23

18

19

No. of lots sold

17

19

18

14

15

Percentage of lots sold

81%

73%

78%

78%

79%

Percentage of lots sold by weight

96%

39%

88%

76%

81%

Percentage of lots sold by value

88%

88%

95%

79%

82%

Total sales realised at auction

USD 15.5 million

USD 14.5 million

USD 19.2 million

USD 14.3 million

USD 10.7 million

Average per carat sales value

USD 1.34/carat

USD 3.72/carat

USD 4.32/carat

USD 5.15/carat

USD 3.28/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 variations in mined production and market demand. Each auction naturally contains a degree of variation in overall quality composition, which is typically reflected in the average per carat sales value and means that the results of each auction are not always directly comparable.

 

The Kariba Amethyst Auction

 

In addition to the auction of gemstones mined by Gemfields at Kagem, the Jaipur event was also used to host an auction of higher quality amethyst mined by Kariba Minerals Ltd (in which Gemfields has a 50% interest).

 

The auction saw 13.6 million carats of higher quality amethyst extracted from Kariba placed on offer, with 10 of the 14 lots offered being sold, generating auction revenues of USD 0.4 million from the 11.6 million carats sold. The amethyst auction realised an overall average value of 3.73 US cents per carat.

 

Gemfields has hosted only four prior rough amethyst auctions which took place in Jaipur in March 2011, Lusaka in February 2015, Singapore in September 2015 and Lusaka in April 2016.

 

Next Auction

 

Gemfields' next auction is expected to take place in December 2016 in Singapore. The auction will predominantly comprise of mixed quality rough ruby from the Montepuez ruby deposit in Mozambique.

 

Ian Harebottle, CEO of Gemfields, commented:

 

"With 81% of the gems offered successfully sold, Jaipur has yet again delivered a positive result in support of Gemfields' vision and reflecting the fact that the platform upon which the growth of the coloured gemstone sector is being built remains encouraging. While there is evidence of a softening in demand for some of the lower qualities in some markets, the overall average price per carat achieved was impacted on by this auction not having the benefit of some of the larger-size, higher quality gems that were placed on offer in our May 2016 auction.

 

As always, we thank our partners in the Zambian Government for their vision and support in building and internationalising the Zambian gemstone sector by promoting transparent and globally-competitive practices."

ENQUIRIES:

Gemfields

[email protected]

JJ Williams, Company Secretary

+44 (0)20 7659 4965

 

 

Grant Thornton UK LLP          

 

Nominated Adviser

 

Philip Secrett/Richard Tonthat/Jamie Barklem

+44 (0)20 7383 5100

 

 

J.P. Morgan Cazenove 

 

Joint Broker

 

Jamie Riddell / James Deal       

+44 (0)20 7742 4000

 

 

BMO Capital Markets Limited

 

Joint Broker

 

Jeff Couch/Neil Haycock/Tom Rider/Jenny Wyllie

+44 (0)20 7236 1010

 

 

Macquarie Capital (Europe) Limited

Joint Broker

Raj Khatri/Nick Stamp/Guy de Freitas

 

 

+44 (0)20 3037 2000

 

 

Tavistock

 

Jos Simson/Emily Fenton/Barnaby Hayward

+44 (0)20 7920 3150

 

Notes to Editors:

Gemfields plc is the world's leading supplier of responsibly sourced coloured gemstones and is quoted on the AIM division of the London Stock Exchange (ticker: GEM) where it is a constituent of the AIM50 index.

 

Gemfields is the operator and 75% owner of both the Kagem emerald mine in Zambia (believed to be the world's single largest producing emerald mine) and the Montepuez ruby mine in Mozambique (one of the most significant recently discovered ruby deposits in the world). In addition Gemfields also holds a 50% interest in the Kariba amethyst mine in Zambia, as well as controlling interests in various other gemstone mining and prospecting licenses in Zambia, Mozambique, Colombia, Ethiopia, Madagascar and Sri Lanka.

 

Gemfields' outright ownership of Fabergé - an iconic and prestigious brand of exceptional heritage - enables Gemfields to optimise positioning, perception and consumer awareness of coloured gemstones, advancing the wider group's "mine and market" vision.

 

Gemfields has developed a proprietary grading system and a pioneering auction and trading platform to provide a consistent supply of quality coloured gemstones to the global downstream markets. This is a key component of the Company's business model which the Directors believe has played an important role in the appropriate distribution and associated resurgence of the global coloured gemstone sector.

 

www.gemfields.co.uk

 

 

Further Information:

 

The results of earlier lower quality Kagem auctions are summarised below:

 

  AUCTION RESULTS (COMMERCIAL QUALITY)

Table 1 of 2

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 2011

9-13 Jun

2012

15-19 Apr 2013

11-15 Nov 2013

Location

Jaipur, India

Jaipur, India

Jaipur, India

Jaipur, India

Lusaka, Zambia

Lusaka, Zambia

Type

Commercial Quality

Commercial Quality

  Commercial Quality

Commercial Quality

Commercial Quality

Commercial 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

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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