Could dividends be on the cards for emerald to rubies producer Gemfields (GEM:AIM)? The business is 'comfortably cash generative' says FinnCap which calculates the miner can afford its planned capital expenditure programme.

'At some point in the not too distant future, it will be in a position to consider returning cash to shareholders, says the broker.

Shares put the question to Gemfields chief executive Ian Harebottle in an exclusive interview on the company's broader plans.

Watch the video to discover his thoughts on dividends, pricing power for both rubies and emeralds, tax risks for its flagship mine and whether Faberge has a long-term future within the group.

FinnCap forecasts a significant uplift in pre-tax profit over the coming years. In the 12-month financial period ending June 2015, it forecasts a 65% gain to $60 million. This rises to $95.5 million in 2016 and $117.2 million in 2017.

Numis analyst Phil Swinfen was among the swathe of analysts who visited Gemfields' operations in April.

'We came away with renewed confidence in the open pit mine plan and the expansion/exploration potential,' he says, referring to Gemfields' Kagem emerald mine in Zambia.

Style: "70's look"

Swinfen also believes the group's Montepuez project in Mozambique has the potential to become the largest ruby deposit in the world.

That's a project we discuss in depth in the video and it has been one of the key factors behind the company's share price appreciation over the past few years.

We've highlighted the company's attractions many times over the years including this article.


Issue Date: 08 May 2015