Member Info for relephant

That's what they have them down as in the accounts. Maybe they are just including them conservatively at cost of mining rather than trying to come up with a reasonable valuation as to what the might be saleable for?

Thanks oufc for revised conversion.

Inventories listed as up by only $18,000 to $154,000

The current low costs of production (and could decline further in Q3 as presumably less capex required) and progress with future marketing and sales is going to be key as you indicate. Also have to hope the ethical environmentally responsible approach gains traction and contributes to boosting prices.

As Quindell writes key will be what prices can be obtained in future for treated cut and polished or treated high quality material and how many cts can be sold to sightholders, plus what can be obtained from the big stones in due course. With sapphires, prices increase/ct for larger stones. Unfortunately no indication given in RNS as to how much high quality material they have stockpiled to date compared to sold. Can prices start to increase markedly for the green material going forward as hoped.

Apologies but not got much time right now to properly evaluate these RNS's. For what they are worth, put down my somewhat hasty initial reactions. Good progress with ramp up to over 1.25m cts in Q2 and avg grade encouragingly continues to improve with 16.5 and 17.5 cts/t for 1H and 2H. While prices are up for medium and high, costs still not being covered but getting close to breakeven with over 95% of production and operating costs now being covered. As usual insufficient information provided to allow shareholders to properly assess the mine and business. Why have sales of high been lumped with medium? Avg prices for med/high still very low but maybe still have most quality stockpiled awaiting sale to sightholders in future? . Is this because only a few high quality cts were sold during H1? or because they are not fetching much even when treated and or cut/polished? Still note management confident of Q3+ being profitable. Good but why? Are they expecting increased sales of higher quality beneficiated material at higher prices to new sightholders in Q3?, or increased prices as marketing continues?, or because costs/ct mined will be even lower in Q3 (presumably less capex needed in Q3 as company has now achieved ramp up)? No mention of big stones. No breakdown by size and colour and quality and proportion of each mined and sold for what cost. No detailed breakdown by treatment. Avg project level cost/ct continues to decline significantly (good). Not clear if there has been sightholder sale yet. Only $332,000 cash equivalents left after some capex to complete ramp up in 1H. Equity actually increased slightly. Small sales from website hardly surprising seeing as so few sapphires are ever shown for sale on it. Why no breakdown for sapphires vs tanzanites? Why so few sapphires ever been on sale on website? As for JORC - While 87.5m cts is considerable (and only a little below the initial capricorn JORC), the information has no detail as to quality breakdown and whether this excludes the stuff too small to sort and sell. More information could have perhaps been given as to variability in grade. Note that JORC grade given in gms/LCM when updates generally discuss cts/tonne. The Sanlam analyst used a conversion of 1 LCM = approx 2 tonnes. If correct, grade of new JORC using this conversion is only equivalent to 8.75cts/t which is about half of what was achieved at Capricorn in 1H. If double the grade is still not yet profitable, then unless the quality profile is radically different in the new area or there are above avg higher grade areas to target, or much higher prices are still to be obtained for quality mined in future, then (at current prices/ct sold) whole of new area may not be economic to mine. Q3 update going to be very interesting. As for JORC - The original JORC was for 109m cts with a grade of 8gms/LCM (equivalent to 20 cts/T assuming 2T-1LCM).

Buzz on BB's will appeal more to shorter term speculators and traders but investors will want to see the numbers that can confirm the story. IMO it is the results that can really move the sp. provided they are sufficiently good and moving in the right direction. Some results have been (grade, price/Ct mined, production, total cts sold). What investors will be looking for is the missing piece in the jig saw so far - news confirming quality sales (critical for profitability).

Apologies for double posting but got message there had been a problem loading and ended up posting a slightly revised version soon afterwards thinking it would be the first time it had been posted.

Sillyness of the current price will be apparent in the course of time; but it could be be silly either way depending on what scenario pans out. If the hoped for and projected return to profitability in the near future materialises, then this will mean the company will have finally started to sell sufficient quality material at a reasonable price which will bode very well for the future. Shareholders will be smiling and the BOD will have earned a big pat on the back for finally managing to find and develop a suitable marketing and sales approach. On the other hand if sufficient quality sales at a reasonable price continue to be delayed and/or fail to materialise; and further dilutive cash raising is necessary to provide working capital; this would be very bad for existing shareholders, and the sp is likely to drop even further. I am concerned about the newly increased ability of the company to potentially issue so many new shares in the future. Let's hope there is no immediate plan for more placings. Of course this may simply have been done to create some "dry powder" and perhaps help allow for a possible partial equity financing of some company expansion sometime in the future after a return to profitability has been established. I am still a bit concerned as to why there has been so little news of sales of higher quality material, and so few stones on the website. Lets hope this is about to change with the next update. The exclusive sales agreement to supply the green stones to one sightholder could be a game changer encouraging the marketing of these to consumers and ultimately significantly boosting prices achieved for these stones should marketing of green to consumers succeed. As ever, eagerly await the next update which should come sometime over the next few weeks. Let's hope the results support the silly current price too-low scenario.

Sillyness of the current price will be apparent in the course of time; but it could be be silly either way depending on what scenario pans out. If the hoped for and projected return to profitability in the near future materialises, then this will mean the company will have finally started to sell sufficient quality material at a reasonable price which will bode very well for the future. Shareholders will be smiling and the BOD will have earned a big pat on the back for finally developing a marketing and sales channel. On the other hand if sufficient quality sales at a reasonable price continue to be delayed and/or fail to materialise; and further dilutive cash raising is necessary to provide working capital; this would not be good for existing shareholders, and the sp is likely to drop even further. I am concerned about the newly increased ability of the company to potentially issue so many new shares in the future. Let's hope there is no immediate plan for more placings. Of course this may simply have been done to create some "dry powder" and perhaps help allow for a possible partial equity financing of some company expansion sometime in the future after a return to profitability has been established. I am still a bit concerned as to why there has been so little news of sales of higher quality material, and so few stones on the website. Lets hope this is about to change with the next update. The exclusive sales agreement to supply the green stones to one sightholder could be a game changer encouraging the marketing of these to consumers and boosting of prices achieved, if the marketing and sales of green succeed. As ever, eagerly await the next update which should come sometime over the next few weeks.

Would of course be great if the company has indeed managed to make some significant sales of quality material in Q2. I have no idea if they have and await the next update/1H report with interest. We however, mustn't forget management are also busy running a business (with limited staff to keep it lean and mean) and perhaps pressing sales or mining issues that have cropped up etc. could have required their immediate focused priority attention delaying any reporting a little. Am sure a report will come sometime in the next few weeks.

My point was they may have fallen short of a return to profitability in 1H, as setting up marketing and sales may have taken a little longer than they would have liked. However by waiting a little, the company may be in a position to give some positive news to shareholders in this regard by commenting on any post period sales early in Q3. A wait to be able to provide post period positive sales info (should there have been some) would allow them to say that while profitability was not reached in 1H, losses have slowed and initial post period sales results of x provide very positive evidence to suggest a return to profitability is on the cards next Qtr or this year. If they had had bumper sales in Q2 I suspect they would have been keen to publicise this good news asap. A slight delay in reporting on Q2 may however allow them to report on positive developments early in Q3 if there have been some.

While the company has generally been pretty good at releasing updates quarterly, the exact dates of these have I think always varied a bit. For all I know they may be waiting for a planned sight sale to complete outside the reporting period so they can add that as an addendum. If so this could delay the release of the quarterly update/half year report.

And meanwhile in South Africa .. http://www.fin24.com/Companies/Mining/sa-mining-industry-on-its-knees-as-woes-grow-20170727-2. Wonder what the future holds for Pallinghurst's operations in Zambia and Mozambique.

It just continues to get worse for miners in Tanzania. Thank goodness Richland managed to get out of there to operate in a much more investor friendly country. While Bernard O and his team have had new challenges with the development of the Capricorn project they must be loving operating in a more predictable and investor friendly country. https://www.dailymaverick.co.za/article/2017-07-17-the-sadc-wrap-magufuli-marches-on-against-mines/#.WXhlnYh97IU

I should have added that the well-publicised Tanzanian problems led to significant losses and company also ended up selling Tanzanian operations for very little in the end, compared to what the mine had once been worth in its heyday. But better to get out with something and the opportunity to start again in a new more investment friendly country than to have lost everything.

Of course strategically with working capital having been so limited, the priority will have been to get the marketing and sales of beneficiated material going and to increase production and grade while lowering costs/ct mined. It may simply be that, given these other pressing priority needs, there has been insufficient cash available to really invest in the online sales platform and its marketing. Maybe this is something on the backburner for the future once the other priority issues have been addressed. Gemfields had millions to spend on marketing - Richland hasn't got that advantage thanks to well publicised Tanzanian problems that made it impossible to operate there, and some poor capital allocation decisions in the past (Massive dividend payouts and Tsavorite) that destroyed what once were significant capital reserves.

I disagree - the website costs money to run and is a potential way to generate additional revenue and did so in the past with Tanzanite sales. Only putting so few stones on the site over such a long period doesn't exactly showcase what the company can produce or give the impression that the company could supply sufficient quantities on a regular basis. If you are marketing and selling so few cts on the web then is this arm of the business even justified or should whoever is managing it be changed ? Also stones sold by the company on the web should have much bigger potential margins as they sell at retail prices while wholesale prices to industry will be a lot lower. We have not yet had any firm reports of quality sales of anything but a tiny number of cts. Agree the beneficiation route is the way to go, and clearly prices offered for untreated rough can't have been good enough to justify its sale necessitating a shift in strategy. In this case it would make sense not to sell and stockpile and wait till you have a beneficiated product to sell and have done the marketing promoting ethical Australian to get some buyers. However this has come at the cost of serious dilution of existing shareholders. Two sightholders is a start, but more will be needed in future to help ensure the company gets good prices. From the positive comments from management lets hope the company is now finally able to show it has finally been able to sell treated material at good prices. Hopefully this can change the company from loss-making to profitability (if not this Qtr, then hopefully by end of year). I fully agree with you that proving you can be a reliable supplier of good amounts of quality material will be important to future pricing. Also the green sapphire market is new and hopefully marketing and sales efforts will bear fruit. As you say once sales of this material are proven, company pricing power increases. However we still await evidence of sufficient turnover from the quality material. Let's see what the next operational update reveals. It would be good as shareholders to get some idea how much quality material is being produced and has been stockpiled and what it can/is being sold for. Hopefully the next operational update and 1H results will confirm that the Capricorn mine is not a lemon, and it is onwards and upwards from here after a difficult start. Sales and marketing of Aussie sapphires has clearly been much harder than it was with Tanzanite. There is much that is positive in how ramp up is progressing, and If the company can crack marketing and sales of quality material to allow a return to profitability his will be a good achievement.

Profitability will depend on whether or not the mine is producing enough quality saleable material and what it can be sold for after some form of beneficiation (heat treating, and/or cutting/polishing). Given the high prices/ct for quality sapphires, then even at wholesale b2b route there should be good margins. Agree with Quindell that the green material sales agreement could be very important as this will provide enough material on a regular basis to justify marketing at retail level. Gemfields in the past indicated that the more the market could provide on a regular basis the better for pricing for this reason. However still a bit odd there have been so few Capricorn sapphires for sale on the company website, and little mention of amount of high quality material produced. Awaiting update with interest and obviously hoping for positive news on sales in the next update given optimistic comments about an anticipated return to profitability by company.

As Gorilla says here's to hoping for news confirming operational break-even point has been passed or that sales to date and proposed/scheduled sight sales strongly suggest that this is highly likely to be achieved in the near future. Number of higher quality cts sold and average prices obtained eagerly awaited. Let us hope that as shareholders we also start to get more information on how much quality material has been stockpiled and benificiated (treated, cut and polished), what proportion of production is of high quality and what range of prices/ct are being fetched or might be fetched for different colour categories. Would be good to get an explanation as to why so few sapphires are (and have been) for sale on the company's web sales site. Hopefully there will be some news of the larger stones recovered (advertised on Twitter and Facebook) and what is to happen or has happened with them.