Gemfields Grou. Regulatory News (GEM)

21 Jul 2006 07:00

21 July 2006 GEMFIELD RESOURCES Plc ("Gemfields" or "the Company", Ticker "GEM") High Quality Emeralds Produced From Initial Mining * Commencement of trial mining with full ramp-up by end of year * First emerald parcel to be valued by September 2006 Gemfields Resources Plc today announces that trial mining has commenced at its100% owned Mbuva-Chibolele Emerald mine in Zambia. The first parcel of emeraldsfrom production will be assembled over the coming weeks of production and isexpected then to be independently valued by September 2006.This trial mining has yielded 19,000 carats of gem grade material (facetablegrade) and 200,000 carats of low grade emeralds (beads & cabochons grade).Trial mining is ramping up to full capacity, likely to coincide with theestablishment of wash plant facilities in Oct 2006, which is expected togreatly improve overall yield. In the meantime, contact zone ore is beingstockpiled for later re-treatmentGemfields' emerald operations are all situated in the well known Ndola RuralEmerald Restricted Area (NRERA). The NRERA is one of the world's majorproducing regions for emerald extraction and has been known to generate aroundUS$100m of annual production. Despite these levels of annual production, miningin the NRERA has traditionally been characterised as artisinal with numeroussmall operations acting independently of each other and with very low levels ofinvestment in both exploration and production. Gemfields' Mbuva-Chibolele mineis the first example of large scale modern mining techniques and practicesbeing applied to the emerald industry in Zambia. Located 65 kms from Kitwe, themine benefits from the significant infrastructure put in place to serviceZambia's well established copper industry.Commenting today Peter Kitchen, CEO, of Gemfields Resources said: "The trialmining from the Mbuva-Chibolele mine has already produced fine emeraldcrystals. The commencement of production ahead of schedule is a reflection ofthe quality of the team we have assembled in Zambia. During August we will havethe first of a series of emerald parcels independently valued as we progressthrough the trial mining phase. By the end of 2006 the Company expects the mineto be operating at full capacity".For more information:Peter Kitchen, CEO peter.kitchen@gemfields.co.ukRichard James, CFO richard.james@gemfields.co.ukGemfields Resources Plc Tel: +44 (0)20 7016 9416Laurence Read/ Leesa Peters Tel: +44 (0) 207 429 6605Conduit PR Mob: +44 (0) 7974 982 512ENDGEMFIELDS RESOURCES PLC