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(Alliance News) - Gemfields Group Ltd on Monday said it plans to resume operations at its mines in the first quarter of 2021 as coronavirus hurt its performance in 2020.
The gemstones supplier said it had cash balances of USD44.3 million as of December 11, a gross debt position of USD58.9 million, a resulting net debt position of USD14.6 million and, in addition, USD12.0 million of auction receivables due from gem auction customers.
Monthly cash operating expenditure has dropped to an average of below USD5.0 million per month in the three months ending November 30 from USD12.1 million per month on average during 2019, thanks to the cost-saving measures implemented across the group.
Gemfields said it presently holds sufficient rough gemstone inventory to be able to host one auction of each of mixed-quality rubies, higher-quality emeralds and commercial-quality emeralds.
Subject to market conditions and Covid-19 developments, Gemfields said it expects that two larger auctions - one each of mixed-quality rubies and higher-quality emeralds – will take place in the first quarter of 2021.
Turning to operations, the company said work at both the Kagem emerald mine and the Montepuez ruby mine have been suspended since March and April, respectively. It predicted that mining operations will resume by end March 2021, subject to market conditions and Covid-19 developments, the company noted.
"2020 has been unlike any year Gemfields has faced to date. Our gemstone auction revenues have fallen almost 89% from 2019's record high of USD201 million. The widespread quarantine, travel and congregating restrictions arising from the Covid-19 pandemic have had a serious impact on Gemfields' ability to host gemstone auctions in our regular format," said Chief Executive Sean Gilbertson.
"We believe that the decisions we have taken in 2020 best position the group, and our sales of emeralds and rubies, for an optimal recovery in 2021," added Gilbertson.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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