Gemfields market update

Healthy production result for the world-class Kagem

Healthy production result for the world-class Kagem
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Gemfields plc (AIM: GEM) recently presented an operational update for the three month period ending 30 June 2013.

Ian Harebottle, CEO of Gemfields, commented: “Gemfields is pleased to report on another healthy quarter and a strong annual production result for the world-class Kagem emerald mine. Emerald and beryl production increased 42% year-on-year and were further supported by better grades and lower unit costs.

We achieved record revenues from our most recent auction of lower quality rough emerald and beryl, despite a small drop in the average per carat price achieved. The outcome of our auction of higher quality rough emeralds, which took place after the end of the financial year, yielded record per carat prices and is clearly indicative of the continued increase in demand for consistently supplied high quality coloured gemstones.

We continue to seek guidance and to interact with the Government of Zambia – our fellow shareholders in Kagem – with respect to possible restrictions on the ability of Gemfields and Kagem to freely choose the locations of its auctions and thereby our ability to sustain the current levels of growth in demand for Zambia’s magnificent and long undervalued gems.

In that light, and in order to further a broader understanding of the emerald sector, we were pleased to sponsor the first-of-its-kind ‘2013 Zambian Emerald Summit’ in Lusaka at the end of May and to facilitate highly interactive discussion among some of the global emerald sectors leading stakeholders.

While the two auctions held in Lusaka this year have certainly been successful, the key question of course remains what they would have generated had they been held abroad (where competing and undermining sources of supply, frequently illegal, are not readily available to our customers) and their potential impact on the long term growth of this sector”.

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Issue 42