July 22 (Reuters) - Gemfields Plc said anindependent report confirmed that its 75 percent-owned Montepuezruby mine in Mozambique has enough reserves to last more thantwo decades.
The Competent Persons Report (CPR), which gives an officialestimate of what is considered the largest deposit of rubies inthe world, projects production of 432 million carats over 21years.
Hollywood actress Mila Kunis is brand ambassador forGemfields, which has been trying to create a stable market forcoloured gemstones, much like what Anglo American Plc's De Beers did for diamonds.
Gemfields, the world's largest rough emerald producer,expects trading in gemstones to account for a "sizeable chunk"of its revenue over the next five to 10 years.
The CPR split the Montepuez mine's probable reserves intoprimary ore reserves of 253 million carats at a 114.9 carats pertonne and secondary reserves of 179 million carats at a lowergrade of 7.07 carats per tonne.
It estimated indicated and inferred mineral resources at 467million carats of ruby and corundum.
Gemfields, which also owns the famed Faberge jewellerybusiness, plans to increase Montepuez's capacity to 5.6 milliontonnes from 3.3 million tonnes and expects about $64 million incapital spending over the next two years.
"An impressive sized resource and good to see an economicmodel with very good returns from relatively modest capital,"Sanlam Securities analyst Charles Long said in a note.
Analysts, however, cautioned against the lack of clarity onthe size of the ruby market and pricing of the gemstones, whichare sold via auctions.
"Some investment risk does remain as ruby auctions completedso far have not demonstrated a consistent price and take-up ofthe goods by the market," finnCap analyst Martin Potts said in anote.
Gemfields shares were up 3.9 percent at 60.75 pence at 0908GMT on the London Stock Exchange.
(Reporting by Abhiram Nandakumar in Bengaluru; Editing byAnupama Dwivedi)