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LONDON (Alliance News) - Gemfields PLC Monday said it saw strong revenues in its first half despite a fall in production levels and grade in the second quarter.
The rare coloured gemstones mining company, with operations in Zambia and 100% ownership of Faberge Limited, said its emerald and beryl production at its 75%-owned Kagem Mining Ltd, Gemfields' only operating emerald mine, fell to 3.9 million carats in the three months ended December 31, 2013 from 6.6 million carats in the same quarter the previous year.
The company also said its overall ore production fell during the quarter to 17,200 tonnes from 23,100 tonnes, and its average realised grade was 224 carats per tonne rather than 288 carats per tonne the previous year.
Gemfields noted that illegal mining activity within the boundary of the Kagem licence has not yet been resolved, and the company continues to work with key ministries in Zambia to try and solve the problem.
However the company said that in the six months ended December 31, 2013, its revenues from auctions and direct sales was USD59.9 million, surpassing by 24% the all-sources revenue of USD48.4 million achieved in the full financial year to June 30, 2013.
The company also noted that it has two more emerald auctions and its first ruby auction scheduled to occur before June 30.
Gemfields said Kagem paid a dividend of USD8 million during the recent quarter, of which USD2 million was paid to the government of Zambia, 25% holder of Kagem. Gemfields said it believes this is the first dividend paid by the Kagem mine in its 29-year history and the first dividend payment to the Zambian government by any gemstone operator in the country.
Gemfields shares were down 2.1% to 35.00 pence Monday.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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