LONDON (Alliance News) - Gemfields PLC Thursday said it sold 99% of the carats taken to an auction in Jaipur, India, which were extracted from the Montepuez ruby deposit in Mozambique, generating over GBP16 million in revenue.
The diamond miner said it sold just under the 4.0 million carats taken to the auction, selling them for an average price of USD4.03 per carat to raise a total of USD16.1 million.
Approximately 40 companies attended Gemfields' third auction of rough rubies from the Montepuez ruby deposit. The company said the material sold in this auction was "predominantly lower quality material" compared to the other auctions held.
"The differences in auction mixes are a direct result of the company's desire to build its understanding of the downstream market in order to optimise its long-term ruby auction format. Auction attendees were drawn from Austria, China, India, Israel, Sri Lanka, Thailand, the United Kingdom and the USA," said the company.
"Customer response in the Jaipur market, where this was the first ever offering of such a considerable volume of non-domestic rough ruby has been overwhelming, as can be seen in the excellent auction results," said Chief Executive Ian Harebottle.
The proceeds from the auction will be repatriated to Montepuez Ruby Mining Ltda in Mozambique, in which Gemfields owns a 75% stake, and to pay royalties to the government of Mozambique on the full sales price achieved at the auction, it said.
In addition, the Jaipur auction also was used to concurrently offer rough emeralds from Zambia and Brazil sourced by Gemfields on the open market, meaning they were not obtained directly from the company's own mining operations. This material generated USD1.6 million of gross revenue over and above the auction revenue from ruby and corundum, said Gemfields.
The diamond miner's next auction will consist of higher quality material from Montepuez and will take place before June 30, 2015.
Gemfields shares rose 0.3% to 65.95 pence per share on Thursday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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Gemfields Grou. (GEM)