Gemfields Second Quarter Emerald Production Up, But Rubies Lower

LONDON (Alliance News) - Gemfields PLC on Tuesday said emerald and beryl production rose in the second quarter of its financial year while sales for its Faberge business increased, though ruby and corundum production was held back.

The company said emerald and beryl production from the Kagem mine in Zambia, in which it holds a 75% stake, hit 8.2 million carats in the fourth quarter to the end of December, significantly higher than the 5.8 million carats produced a year earlier.

The average grade also increased significantly, up to 272 carats per tonne from 190 carats per tonne the year before, while operating costs for the group fell.

Ruby and corundum production in the quarter dropped, however, to 1.6 million from 3.4 million a year earlier due to a focus on processing additional volumes of higher-quality alluvial resource at the Montepuez mine in Mozambique, in which Gemfields also holds a 75% stake.

The average grade of the rubies and corundum mined fell to 22 carats per tonne, down from 34 per tonne a year earlier, while operating costs rose due to an increase in the scale of production at the project.

For its Faberge business, which designs and makes various products from jewels, sales orders for the quarter were up 13% year-on-year, while its gross margin on the orders improved significantly, up to 49% from 31%. Total unit sales were up 48% year-on-year, but operating costs rose, mainly due to a higher advertising spend.

Gemfields shares were up 2.3% to 45.5 pence.

By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance

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Gemfields Grou.