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Market Developments

Gemfields production at Kagem mine falls 45 percent

May 06, 2014

London--Precious gemstone miner Gemfields reported Friday that production of emerald and beryl at its Kagem mine in Zambia was 3.6 million carats in the third quarter, down from 6.5 million carats in the prior-year period.

The company attributed this decline to unseasonably high rainfalls in Zambia during the quarter, adding that operations at the mine remain “robust” and that it is positioned to benefit from an anticipated improvement in grades.

Gemfields also noted that the during the three-month period ending March 31, the company extracted 1.2 million carats of ruby and corundum during the ongoing bulk sampling operations at the Montepuez ruby mine in Mozambique. That is more than double the 500,000 carats extracted in the third quarter 2013.

The company is continuing to test and refine its comprehensive grading and sorting framework for rough rubies, as well as looking into various downstream ruby and corundum enhancement processes, with its first ruby auction scheduled to take place in Singapore in mid-June. 

Meanwhile, revenue from sales for Fabergé, which Gemfields acquired early last year, jumped 134 percent year-over-year, continuing the momentum from the previous quarter. Sales were supported by the brand’s exhibits at Baselworld, where new collections and designs were unveiled, and at the Doha Jewellery & Watches Exhibition in Qatar.

Fabergé also had two major promotions immediately after the quarter ended, a three-week long display and exhibit at Harrods in London and the “Big Egg Hunt” initiative in New York City.

“Underlying gemstone markets remain healthy, supported by the ongoing increase in global demand for emeralds and other colored gemstones,” CEO Ian Harebottle said.

RELATED CONTENT: Gemfields emerald, beryl auction nets $36M

In February, Gemfields’ auction of predominantly higher-quality rough emerald and beryl in Lusaka, Zambia realized $36.5 million, a company record for any auction.

An auction of traded rough emeralds, meaning stones not obtained directly from the company’s own mining operations, took place May 2 in Jaipur, India.

London-based Gemfields has a 75 percent stake in the Kagem mine in Zambia, as well as a 50 percent stake in the Kariba amethyst mine in Zambia, a 75 percent interest in the Montepuez ruby deposit in Mozambique, and licenses for ruby, emerald and sapphire deposits in Madagascar.