Market Update - Quarter to 31 March 2017

Released : 12 May 2017 07:00:00

RNS Number : 9288E
Gemfields PLC
12 May 2017
 

Gemfields plc

 

("Gemfields" or the "Company")

 

Market Update - Quarter to 31 March 2017

 

12 May 2017

 

 

Gemfields plc (AIM: GEM) is pleased to present an operational update for the three-month period ending 31 March 2017, the third quarter of the 2017 financial year. All figures are approximate and unaudited. Unless otherwise stated, the term "carats" includes both emerald and beryl in relation to the Kagem emerald mine, and both ruby and corundum in relation to the Montepuez ruby mine.

 

Highlights

 

Emeralds

·     Production summary for 75%-owned Kagem Mining Limited ("Kagem") in Zambia for the quarter ending 31 March 2017:

§ Production of 4.5 million carats of emerald and beryl with an average grade of 193 carats per tonne (versus 7.1 million carats with an average grade of 297 carats per tonne in the quarter ending 31 March 2016), with the difference being attributable to the varied nature of the emerald mineralisation, exceptionally high rainfall combined with a renewed focus on opening new areas for future production;

§ Total operating costs(a) of USD 9.6 million (versus USD 11.2 million in the quarter ending 31 March 2016) supported by improved efficiencies and ongoing cost saving initiatives;

§ Unit operating costs(b) of USD 2.13 per carat (versus USD 1.58 per carat in the quarter ending 31 March 2016), while on a cash basis(c) unit operating costs were USD 1.73 per carat (versus USD 0.96 per carat in the quarter ending 31 March 2016) with the difference being attributable to the lower number of carats recovered in the quarter; and

§ Cash rock handling unit costs of USD 3.55 per tonne (versus USD 2.62 per tonne in the quarter ending 31 March 2016) primarily due to the reduction in total rock handling on account of the higher rainfall experienced.

·     An auction of predominantly higher quality rough emeralds extracted from the Kagem mine was held in Lusaka, Zambia in February 2017. The auction generated revenues of USD 22.3 million at an average realised value of USD 63.61 per carat, the third highest price achieved to date.

·     The next auction of predominantly commercial quality rough emeralds from Kagem is scheduled to take place in Jaipur, India, from 15 to 18 May 2017. 

·     The lower production achieved to date at Kagem is expected to reduce the targeted total production for the 2017 financial year to between 20 and 25 million carats. The Company, however, remains confident that it will deliver on the longer-term production ramp up over the coming years.

 

Rubies

·     Production summary for 75%-owned Montepuez Ruby Mining Limitada ("Montepuez") in Mozambique for the quarter ending 31 March 2017:

§ Production of 1.2 million carats of ruby and corundum with an average grade of 7.0 carats per tonne (versus 2.0 million carats with an average grade of 30 carats per tonne in the quarter ending 31 March 2016) largely as a result of the lower grade but higher value ore being processed, with the quantity of premium quality rubies recovered increasing by 92%;

§ Total operating costs(a) of USD 6.5 million (versus USD 5.8 million in the quarter ending 31 March 2016);

§ Unit operating costs(b) of USD 5.42 per carat (versus USD 2.90 per carat in the quarter ending 31 March 2016) as a direct result of the decrease in carats produced. On a cash basis(c), unit operating costs were USD 4.08 per carat (versus USD 2.40 per carat in the quarter ending 31 March 2016); and

§ Cash rock handling unit costs of USD 5.37 per tonne (versus USD 10.18 per tonne in the quarter ending 31 March 2016), mainly attributable to almost doubling of total rock handling while costs were maintained at similar levels as comparative period.

·     The next mixed quality auction of rough rubies and corundum from Montepuez is expected to take place in June 2017, in Singapore.

·     Given that the production focus will be on processing predominantly lower grade but considerably higher value ore for the remainder of the financial year, the targeted total production is now estimated to be between 8 to 10 million carats of rough rubies and corundum (compared to previous guidance of 10 to 12 million carats).

 

Fabergé

·     Fabergé highlights for the quarter ending 31 March 2017:

§ The number of pieces sold during the quarter ending 31 March 2017 increased by 63% when compared to the quarter ending 31 March 2016, supported by an 18% increase in the number of sales transactions during the same period;

§ Sales orders agreed(d) during the quarter ending 31 March 2017 declined by 39% when compared to the quarter ending 31 March 2016;

§ Total operating costs for the quarter ending 31 March 2017 fell by 13% when compared to the quarter ending 31 March 2016; and

§ Fabergé launched the third men's timepiece in the Fabergé Visionnaire collection, further cementing its position within this highly profitable sector.  The Visionnaire Chronograph was showcased alongside new jewellery pieces at Baselworld 2017, the World Watch and Jewellery Show, and has already received considerable acclaim.

 

Corporate and cash

·     Cash and cash equivalents of USD 4.6 million at 31 March 2017; and

·     Total debt outstanding of USD 60.1 million at 31 March 2017.

 

Ian Harebottle, CEO of Gemfields, commented:

 

"From an operational perspective the quarter under review delivered mixed results but we remain delighted that demand for coloured gemstones continues to increase as the sector strengthens.

 

Montepuez has once again performed extremely well, with a significant increase in the quantity of ore and the quality of the gemstones produced. The upgrade to the existing wash plant is also showing an increase in processing rates, and while it is yet to achieve optimal levels of performance, it has already delivered an approximate 170% increase in ore processed, when compared to the quarter ending 31 March 2016. The remainder of the FY17 will focus on processing lower grade but higher quality and value ore.

 

The inclement weather during the period, varied nature of the mineralisation and a focus on opening new areas for future mining have resulted in Kagem delivering lower volumes of production. The team on site have worked tirelessly to counteract this with further improvements to operational efficiencies, a reduction in total operating costs, and continuing exploration and bulk sampling activities. It is pleasing to see that these efforts have been rewarded by an improvement in production levels post period end.

 

Importantly, the lower production experienced during the quarter at both Kagem and Monetpuez, and the changes to the targeted total production figures for financial year 2017, will not impact on the Company's upcoming auction schedule.

 

Post an internal review Gemfields has made the decision to withdraw from the Coscuez transaction in Colombia and its operations in Sri Lanka. The Company truly believes that its portfolio of high quality assets in Africa, as well as other potential expansion opportunities within Zambia, Mozambique and Ethiopia, are all likely to deliver considerably higher returns, with shorter payback periods, than some of the other jurisdictions it had previously been evaluating. By way of example, bulk sampling is expected to commence as early as July 2017, in Ethiopia.

 

I look forward to sharing with you the outcome of our next auction of predominantly commercial quality emeralds and beryl, scheduled to take place in Jaipur, India, later this month, and the continued improvement in the coloured gemstone sector."

 

Explanatory Notes:

 

(a)       Total operating costs include mining and production costs, selling, general and administrative expenses, depreciation and amortisation, but exclude capitalised costs and mineral royalties.

(b)       Unit operating costs are calculated as total operating costs divided by the total gemstone production during the period.

(c)       Cash operating costs include mining and production costs, capitalised costs, selling, general and administrative expenses, and exclude property, plant and equipment capital expenditure, depreciation, amortisation and mineral royalties.

(d)       Sales orders agreed are sales that Fabergé has agreed and confirmed with customers during the reporting period. Payment and/or delivery may take place later.

 

KAGEM EMERALDS

 

Production and Operations Update

 

The 75%-owned Kagem emerald mine remains the single largest producing emerald mine in the world. The key production parameters by quarter are summarised below:

 

KAGEM Quarterly Summary to March-17


Quarter

Units

Jun-15

Sep-15

Dec-15

Mar-16

Jun-16

Sep-16

Dec-16

Mar-17

PRODUCTION










Gemstone Production (Emerald+Beryl)

million carats

8.1

7.5

8.2

7.1

7.2

6.0

4.7

4.5

Ore Production (Reaction Zone)

'000 tonnes

36.5

31.7

30.1

23.9

39.0

34.4

30.2

23.3

Grade (Emerald+Beryl/Reaction Zone)

carats/tonne

222

237

272

297

185

174

156

193

Waste Mined (including TMS)

million tonnes

3.6

4.0

2.8

2.6

3.1

2.9

2.6

2.1

Total Rock Handling

million tonnes

3.6

4.1

2.8

2.6

3.1

3.0

2.6

2.2

Stripping Ratio


99

126

93

109

79

84

86

90

CASH COSTS (a)










Total (Cash) Operating Costs (a)

USD million

10.5

8.4

8.0

6.8

8.1

7.1

7.5

7.8

Gemstone (Cash) Unit Cost (Emerald+Beryl) (a)

USD/carat

1.30

1.12

0.98

0.96

1.13

1.18

1.60

1.73

Ore / Reaction Zone (Cash) Unit Cost (a)

USD/RZ tonne

288

265

266

285

208

206

248

335

Rock Handling (Cash) Unit Cost (a)

USD/tonne

2.92

2.05

2.86

2.62

2.61

2.37

2.88

3.55

ACCOUNTING COSTS (b) (d)










Total Operating Costs (b) (c) (d)

USD million

12.8

11.4

12.1

11.2

12.6

10.2

10.2

9.6

Gemstone Unit Cost (Emerald+Beryl) (b) (d)

USD/carat

1.58

1.52

1.48

1.58

1.75

1.70

2.17

2.13

Ore / Reaction Zone Unit Cost (b) (d)

USD/RZ tonne

351

360

402

469

323

297

338

412

Rock Handling Unit Cost (b) (d)

USD/tonne

3.56

2.78

4.32

4.31

4.06

3.40

3.92

4.36

CAPITAL EXPENDITURE










Property, Plant and Equipment

USD million

1.8

0.2

0.5

2.6

0.4

0.6

0.1

0.7

Capitalised Waste Stripping (d)

USD million

4.7

2.5

-

-

-

-

-

-

(a)       Cash operating costs include mining and production costs, capitalised waste stripping costs, selling, general and administrative expenses, and exclude property, plant and equipment capital expenditure, depreciation, amortisation and mineral royalties.

(b)       Total operating costs include mining and production costs, selling, general and administrative expenses, depreciation and amortisation, but exclude capitalised waste stripping costs and mineral royalties.

(c)       As at 31 March 2017, a total of approximately USD 62.4 million of waste moving costs was capitalised and is being amortised as and when the associated ore is mined. The balance of capitalised waste moving costs, net of amortisation, as at 31 March 2017 amounted to USD 12.3 million.

(d)       Following the updated JORC Reserves and Resource Statement in September 2015, Kagem changed its mine plan from previously undertaking significant high wall pushbacks to now undertaking continuous waste removal and mining. The previous high wall pushback campaigns whose costs were capitalised as deferred stripping costs ceased in September 2015. The results of the three quarters to March 2016 have been restated, to reflect this change in accounting treatment.

 

 

Total rock handling during the quarter ending 31 March 2017 was 2.2 million tonnes delivering total production of 4.5 million carats (versus 2.6 million tonnes of rock handling with total production of 7.1 million carats in the quarter ending 31 March 2016). Exceptionally high rainfall during the quarter resulted in reduced working hours, affecting both the volume of total rock excavated and development of the production levels. This, together with the fluid nature of the ore deposit and a current focus on opening new areas for future ore production resulted in an overall reduction in volumes achieved.

 

Added focus was placed on the continuous improvement in operational efficiencies, containment of costs, and exploration and bulk sampling activities at the Fibolele and Libwente sectors. These efforts have begun to deliver some positive results, with production volumes trending upwards post period end.

 

Health, Safety, Environment and Community Update

 

Supported by a high-level commitment to the wellbeing of our employees, Kagem continues to maintain an excellent safety record, with no reportable lost time injuries being recorded. Kagem commenced the process required for the establishment and certification of an integrated Health, Safety, Environment ("HSE") and Quality management systems to comply with ISO9001, ISO14001 and OHSAS18001 standards. Team champions have been appointed and an appropriate training and education process has been put in place.

 

Local stakeholders continued to be engaged to assist in identifying community needs and jointly developing the Company's ongoing project plans, roles and responsibilities. The Chapula Secondary School and Nkana Clinic continued to be supported during the period and were handed over to the community following a small number of further improvements. The Masasa Bridge connecting the Lumpuma chiefdom was rehabilitated and work with the agricultural societies continued to be strengthened with additional training and technical support.

 

 

 

 

Emerald Auction Update

 

The February 2017 auction of predominantly higher quality rough emeralds was held in Lusaka, Zambia. The auction saw 349,935 carats being sold, which represented 95% of the value and 84% of the weight offered. The auction generated revenues of USD 22.3 million at an average realised value of USD 63.61 per carat, the third highest price achieved to date.

 

The auction results are summarised below:

 

 

KAGEM AUCTION RESULTS

February 2017

Dates

13-17 February 2017

Location

Lusaka, Zambia

Type

Higher quality

Carats offered

0.42 million

Carats sold

0.35 million

No. of companies placing bids

33

Average no. of bids per lot

7

No. of lots offered

19

No. of lots sold

17

Percentage of lots sold

89%

Percentage of lots sold by weight

84%

Percentage of lots sold by value

95%

Total sales realised at auction

USD 22.3 million

Average per carat sales value

USD 63.61/carat

 

The next auction of predominantly commercial quality rough emeralds from the Kagem mine is scheduled to take place in May 2017 in Jaipur, India.

 

MONTEPUEZ RUBIES

 

Production and Operations Update

 

The ongoing mining and bulk sampling operations continued during the period at the Montepuez ruby deposit in Mozambique, in which Gemfields has a 75% interest. The key production parameters by quarter are summarised below:

 

MONTEPUEZ Quarterly Summary to March-17


Quarter

Units

Jun-15

Sep-15

Dec-15

Mar-16

Jun-16

Sep-16

Dec-16

Mar-17

PRODUCTION










Gemstone Production (Ruby+Corundum)

million carats

0.7

0.5

1.6

2.0

6.2

4.5

1.1

1.2

Ore Production (Primary+Secondary)

'000 tonnes

119.5

136.9

132.9

65.1

175.5

177.4

196.0

169.9

Ore Processed (Primary+Secondary)

'000 tonnes

75.5

72.8

71.7

67.6

83.1

102.6

89.4

181.8

Grade (Ruby+Corundum/Ore Processed)

carats/tonne

9

7

22

30

75

44

12

7

Waste Mined

'000 tonnes

859.7

996.8

922.0

406.3

693.2

923.0

927.3

742.6

Total Rock Handling

'000 tonnes

979.2

1,133.7

1,054.9

471.4

868.7

1,100.4

1,123.3

912.5

Stripping Ratio


7.2

7.3

6.9

6.2

3.9

5.2

4.7

4.4

CASH COSTS (a)










Total (Cash) Operating Costs (a)

USD million

6.0

5.1

5.3

4.8

6.2

4.7

5.5

4.9

Gemstone (Cash) Unit Cost (Ruby+Corundum) (a)

USD/carat

8.57

10.20

3.31

2.40

1.00

1.04

5.00

4.08

Ore Production (Cash) Unit Cost (a)

USD/tonne

50.21

37.25

39.88

73.73

35.33

26.49

28.06

28.84

Rock Handling (Cash) Unit Cost (a)

USD/tonne

6.13

4.50

5.02

10.18

7.14

4.27

4.90

5.37

ACCOUNTING COSTS (b)










Total Operating Costs (b)

USD million

7.0

6.1

6.9

5.8

7.4

5.8

6.6

6.5

Gemstone Unit Cost (Ruby+Corundum) (b)

USD/carat

10.00

12.20

4.31

2.90

1.19

1.29

6.00

5.42

Ore Production Unit Cost (b)

USD/tonne

58.58

44.56

51.92

89.09

42.17

32.69

33.67

38.26

Rock Handling Unit Cost (b)

USD/tonne

7.15

5.38

6.54

12.30

8.52

5.27

5.88

7.12

CAPITAL EXPENDITURE










Property, Plant and Equipment

USD million

2.3

3.3

1.8

1.6

0.8

3.6

5.2

0.6

 

(a)       Cash operating costs include mining and production costs, capitalised costs, selling, general and administrative expenses, and exclude property, plant and equipment capital expenditure, depreciation, amortisation and mineral royalties.

(b)       Total operating costs include mining and production costs (including security costs), selling, general and administrative expenses, depreciation and amortisation, but exclude capitalised costs and mineral royalties.

 

In the quarter ending 31 March 2017, a total of 169.9 thousand tonnes of ore was mined (versus 65.1 thousand tonnes for the quarter ending 31 March 2016). The stripping ratio decreased to 4.4 (versus 6.2 for the quarter to 31 March 2016) due to the mining of exposed ore in Mugloto and Glass pits for which stripping had been completed in previous quarters.

 

The current quarter saw 181.8 thousand tonnes processed, an increase of almost 170% over the 67.6 thousand tonnes processed in the quarter ending 31 March 2016. This increase, is attributable to the completion of the upgraded processing plant which, despite not yet reaching its target capacity, attained an average operational rate of 132 tonnes per hour during the quarter under review. This represents a 127% increase when compared to the 58 tonnes per hour achieved in the quarter ending 31 March 2016 when the previous plant was still utilising jigs. The upgraded processing plant includes a new scrubber, de-grit unit and DMS unit. The processing of pre-screened material and an overall reduction in plant stoppages also contributed to the achievement of these record tonnages.

 

The average grade during the quarter ending 31 March 2017 decreased to 7.0 carats per tonne (compared to 30 carats per tonne in the comparative period) producing a total of 1.2 million carats of rough rubies and corundum (versus 2.0 million carats in the quarter to 31 March 2016). The decrease is due to the processing of a greater proportion of lower grade, but significantly higher value, alluvial ore and was partially offset by the higher processing throughput.

 

The construction of the Montepuez camp is proceeding to plan and is expected to be fully completed by June 2017.

 

Security Update

 

Additional security measures have been put in place to support the expansion of the mining operations and upgraded processing plant. A comprehensive risk analysis was carried out to identify high security risk areas and additional cameras were installed to cover all key zones. A design for a Personnel Control Centre ("PCC") included within the proposed integrated sort house has been finalised. Security improvements have been made to the stockyard, including the installation of 16 additional flood lights and concertina coil at the bottom of the fence. Work on the erection of the boundary wall at the housing area has been completed and CCTV cameras have been installed in the office complex and at the main gates. Refresher training on human rights and voluntary principles has been completed for all security staff and additional training requirements have been identified. New training modules are being delivered and will include training on tactical information gathering and working with indigenous forces. A mobile based application has been implemented and is being utilised by the patrol teams to generate real time incidents reports. A similar application is also being tested for use at the wash plant and sort house.

 

Health, Safety, Environment and Community Update

 

Montepuez has made various improvements in HSE Community training, policies and procedures during the quarter. Regular employee training sessions covering human rights, conflict resolution, housekeeping procedures and operation and maintenance of heavy earth moving machinery continued during the quarter. Hazardous and non-hazardous waste removal from the mine and camp, by a waste management contractor, was put in place and forms part of a wider waste management strategy that is being developed and implemented. The construction of a concrete wash-bay and a bio-remediation area has also been completed. The process for the establishment and certification of an integrated HSE and Quality management system to comply with ISO9001, ISO14001 and OHSAS18001 standards has started, with the consultant now selected. Work on the management system will commence in the new financial year. A dump truck simulator has been delivered on site, installed and commissioned. This allows better training on the use of dump trucks and improve safety procedures.

 

Notable progress has been made regarding the process of obtaining land rights, ("DUAT") and the Resettlement Action Plan ("RAP") approvals. During the second quarter, DUAT for an area of 7,642 hectares was approved by the Government of Mozambique. DUAT application for the remaining area of about 18,000 hectares is awaiting approval of the Council of Ministers and is expected to be approved by the end of the financial year. The RAP application is in the final stages of provincial and district government approval and is expected to be approved later this year.  

 

Montepuez increased its farming support through an expansion of its conservation farming initiative with demonstration plots being set out in each of the six main villages within the concession. This initiative encourages cooperatives to farm higher value crops using traditional and more productive farming methods. At present, over 200 farmers benefit from the project. Montepuez also enhanced its support for women's livelihoods with the launch of a second chicken farm, located at Namanhumbir village. A new women's co-operative has started a first cycle of rearing 2,000 chicks. A mobile clinic unit was officially launched at a health fair in Namanhumbir. In the first two months of its outreach program, in partnership with the Government of Mozambique, the clinic offered health services relating to malaria, diarrhoea, coughs, paediatric care and vaccinations and was attended by nearly 8,000 people. The rehabilitation and development of three new primary schools were completed and inaugurated by the President of Mozambique in May 2017.

 

Ruby Auction Update

 

Gemfields' next mixed quality auction of rough rubies and corundum is expected to take place in June 2017 in Singapore.

 

FABERGÉ

 

Fabergé saw a significant increase in both the number of sales transactions achieved as well as the number of pieces sold during the quarter ending 31 March 2017. Total operating costs for the quarter ending 31 March 2017 fell by 13% when compared to the quarter ending 31 March 2016. These metrics provide encouraging evidence that the rationalisation of the cost base and the improving product mix continue to move the business forward.

 

Fabergé remains focused on digital marketing and print advertising, presenting a Valentine's collaboration with Luxury Lifestyle Influencer, Peony Lim alongside print campaigns in The Telegraph and the Financial Times newspapers during the quarter. Additional covers were also provided in more traditional fashion magazines such as Tatler and Vanity Fair.

 

Fabergé's third men's timepiece in the Fabergé Visionnaire collection, the Visionnaire Chronograph, was launched at Baselworld 2017, alongside new jewellery pieces, in March 2017. The timepiece received an excellent reception from the watch industry's press and media and provides wholesale partners with another innovative addition to the Fabergé watch product line.

 

ETHIOPIA

 

The geochemical analysis and interpretation of the drilled diamond core samples from the Dogogo south block has been completed. The level plan at 1,300 metres Reduced Level (about 25 metres below surface), produced from the drilling data, confirms the presence of three sets of pegmatitic bodies. The geochemical analysis confirms the presence of chromium in the ultramafic TMS formation, and reaction zones were visually observed in the drilled core. TMS and pegmatite samples from all three pegmatitic bodies were sent to a laboratory for further chemical analysis, and the results are being reviewed.

 

Preliminary ground work for a bulk sampling exercise scheduled to commence in July 2017 is underway. These preparations include the selection of a mining contractor, recruitment of key personnel, and camp and civil infrastructure upgrades. Following the positive progress of the exploration and the good standing of the project to date, the exploration licence was successfully renewed in January of this year for a further year, without having to relinquish 25% of the licence area, which would otherwise have been the standard practice.

 

An exploratory pitting exercise was carried out in the Dogogo north block at the potential contact zones exposed during the trenching exercise. The depth of the pits ranges from 1 to 1.5 metres, and measure 1.5 x 1.5 metres wide. Beryl samples were recovered from some of the pits.

 

A detailed geological mapping exercise was completed in the Nana block. The block measures 2.6 km2 and covers 2 km of prospective strike length of emerald mineralisation.

 

COLOMBIA

 

Gemfields and its prospective project partner, New-Esmeracol S.A made the joint decision to withdraw from the Coscuez transaction on the grounds that not all of the conditions precedent to the existing share purchase agreement were able to be satisfied within the stipulated timeframe.  

 

Gemfields would like to pay tribute to New-Esmeracol S.A., and to the current licence holder, Esmeracol S.A., for their efforts and the friendship they have extended throughout the project.

 

Gemfields would also like to thank the Government of the Republic of Colombia for its help and guidance in relation to Gemfields' potential investment in Colombia. Gemfields will continue to review potential investment opportunities within the country and remains cognisant of its immense potential.

 

SRI LANKA

 

Following on from the internal review of the Sri Lankan operations, and comparing this to the expansion opportunities that are currently available to the Company in other jurisdictions, a decision was made not to progress its trading and associated operations. The related facilities in Ratnapura and Colombo have since been closed.

 

However, when considering the longer-term potential inherent within Sri Lanka, Gemfields will look to build on the solid working relations it has managed to establish with key stakeholders to date, while maintaining interest in its exploration licences covering diverse minerals.

 

MOZAMBIQUE

 

Megaruma Mining Limitada ("Megurama") holds two ruby mining titles located in the Montepuez district of Mozambique. These titles each share a boundary with the existing Montepuez Ruby Mining deposit, and cover approximately 19,000 hectares and 15,000 hectares respectively. Exploration activities such as high resolution aeromagnetic survey, geological mapping and core drilling totalling 497 meters in 8 holes have been completed in the area. The exploration input will be helpful in completing the environmental impact analysis process which is in progress.

 

The exploration licence 5061L held by Eastern Mining Limitada, a joint venture company registered in Mozambique with Gemfields holding 75% interest, was converted and issued by the Ministry of Mines as a mining title with identification number 8277C on 29 November 2016, valid for 25 years. The licence covers an area of 116 km2 and shares its western boundary with the southern licence of Megaruma. The transaction for this acquisition has been completed and the joint venture relationship is now operational. 

 

MARKETING

 

This quarter saw Gemfields attend the iconic Baselworld show. Gemfields announced its partnership with Gubelin Laboratory in relation to the launch of a new type of nano-particle technology that allows for full traceability of emeralds from mine-to-market.  The announcement generated much excitement and received widespread global press coverage. Baselworld also played host to the first European Gemfields Ruby Masterclass, after successful sessions were held with retailers in China and the U.S..Various press and market influencers attended the introductory session to learn more about these incredibly rare gemstones.

 

A partnership with Vogue targeted a younger audience with a trio of films featuring influencers from around the world.  Presenter, author and style maven Louise Roe, actress and model Immy Waterhouse and stylist and photographer Margaret Zhang all took time to talk through their jewellery choices and rituals.

 

CORPORATE & CASH

 

At 31 March 2017, the Group's cash and cash equivalents were USD 4.6 million (versus USD 5.6 million at 31 March 2016). The total debt outstanding at 31 March 2017 was USD 60.1 million (versus USD 49.0 million at 31 March 2016), which includes USD 10.1 million with Macquarie Bank Limited (UK Branch), USD 5.1 million with Pallinghurst Resources Limited, Kagem's outstanding debt balance of USD 20.0 million with Barclays Bank and USD 24.9 million outstanding with BCI bank and Barclays in Mozambique for Montepuez.

 

In April 2017, the Kagem revolving credit facilities with Barclays were extended for another 3 years with an increased available amount of up to USD 35 million.

 

Total selling, general and administrative expenses were USD 14.2 million for the quarter to 31 March 2017 (versus USD 14.6 million in the quarter to 31 March 2016).

 

 

ENQUIRIES:

 

Gemfields

janet.boyce@gemfields.co.uk

Janet Boyce, CFO

+44 (0)20 7518 7283

 

Grant Thornton UK LLP

Nominated Adviser

Philip Secrett/Richard Tonthat/Jamie Barklem

+44 (0)20 7383 5100

 

JP 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 a leading supplier of responsibly sourced coloured gemstones and is quoted on the AIM market of the London Stock Exchange (ticker: GEM).

 

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

 

Gemfields' outright ownership of the Fabergé brand - an iconic and prestigious brand of exceptional heritage - enables Gemfields to optimise positioning, perception and consumer awareness of coloured gemstones, advancing the 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

"The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulations (EU) No. 596/2014."


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