Gemfields reports a positive result from its latest auction in Jaipur with 81% of the gems offered successfully sold but sees a softening in demand for some of the lower qualities in some markets.
Highlights - emerald auction
- Auction revenues of $10.7 million
- A robust $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%)
Highlights: amethyst auction
- Auction revenues of $0.4 million;
- The average realised price was 3.73 US cents per carat
- Of the 13.6 million carats offered for sale, 11.6 million carats were sold (86%).
A total of 30 companies placed bids in Gemfields' first auction of Kagem production in the current financial year.
Gemfields said 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 $10.7 million. The auction realised a pleasing overall average value of $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.
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.
Chief executive Ian Harebottle said: "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."
At 8:17am: (LON:GEM) Gemfields PLC share price was -1.12p at 51.88p