Last checked at 30 Nov 2011 07:00
Gemfields plc
("Gemfields" or the "Company")
Results of Jaipur Rough Emerald and Beryl Auction
30 November 2011 Gemfields plc (AIM: "GEM") is pleased to announce the results of its auction of(predominantly lower quality) rough emeralds and beryl held in Jaipur, India,from 21-25 November 2011. Highlights
- Record revenues of USD 11.0 million for an auction of 9.8 million carats of
lower quality rough mined by Gemfields at the Kagem mine (versus USD 9.9
million for 12.98 million carats from the previous lower quality emerald
auction in March 2011)
- Five months into the current financial year (ending 30 June 2012), Gemfields
has, from two auctions, already exceeded the prior financial year's total
annual revenues (of USD 40.2 million) by USD 2.4 million
- A 46% increase (from USD 0.77 per carat to USD 1.12 per carat) in realised
quality-for-quality per carat prices since March 2011
- Eight auctions held since July 2009 have generated revenues totalling USD 98.5
million
- Auction results underscore continuing robust global demand for Gemfields'
ethical Zambian emeralds
- Next auction of (predominantly higher quality) rough emeralds is scheduled for
March 2012 Gemfields held an auction of (predominantly lower quality) rough emeralds inJaipur, India, from 21 to 25 November 2011. Thirty eight companies wereinvited to attend the auction, with twenty seven of these placing bids for thematerial on offer. The auction saw 10.8 million carats of rough emeralds minedby Gemfields placed on offer, with 9.8 million carats being sold, generatingrecord sales of USD 11.0 million for an auction of rough emeralds of thisquality bracket. When compared with the last lower quality auction held in March 2011, averagequality-for-quality per carat prices showed a 46% increase from USD 0.77 percarat to USD 1.12 per carat. This further underscores the robust growth in bothprices and demand for emeralds in general, and for Gemfields' ethical emeraldsin particular. This was the first auction of lower quality material during the currentfinancial year, the only other auction in this financial year having been thehigher quality auction held in Singapore in July 2011. These two auctions havegenerated combined sales of USD 42.6 million, already exceeding last year'stotal annual revenues of USD 40.2 million by USD 2.4 million. The eightauctions held since July 2009 have generated USD 98.5 million in aggregaterevenues.
The results of the three lower quality rough emerald and beryl auctions held to date are summarised below:
AUCTION RESULTS (LOWER MARCH '10 MARCH '11 NOVEMBER '11
QUALITY) AUCTION AUCTION AUCTION Dates 11-15 March 10-14 March 21-25 2010 2011 November 2011 Location Jaipur, India Jaipur, India Jaipur, India Type Lower Quality Lower Quality Lower Quality Carats offered 28.90 million 16.83 million 10.83 million Carats Sold 22.80 million 12.98 million 9.82 million No. of companies placing 25 44 27 bids Average no. of bids per 8 14 9 lot No. of lots offered 56 35 26 No. of lots sold 49 34 19 Percentage of lots sold 88% 97% 73% Percentage of lots sold 78.9% 77% 91% by weight Percentage of lots sold 89% 99% 80% by value Total sales realised at USD 7.2 USD 9.9 USD 11.0 auction million million million Average per carat sales USD 0.31 per USD 0.77 per USD 1.12 per value carat carat carat Note: a larger volume of material was placed on offer in
March 2010 following Gemfields extensive
inventory building exercise during 2008 and 2009. The Jaipur auction was also used as a platform to further trial the sale ofrough emerald and beryl acquired or made available to the market from othersources of supply (i.e. not certified as having been mined by Gemfields, andtherefore referred to as "Traded Material"), a trial which began at theSingapore auction in July 2011. None of this material is included in the tableor data presented above. The Traded Material offered at the Jaipur auctioncomprised of other rough emerald and beryl from both Brazil and Zambia, andbids in respect of these goods were accepted until 28 November 2011. Interestlevels in, and sales volumes of, Traded Material increased markedly whencompared with the July 2011 Singapore auction. However, while Traded Materialis an important strategic objective of the Company in the longer-term tosupport Gemfields' aim of becoming the premier supplier of rough colouredgemstones to the downstream markets, the present income accruing to Gemfieldsfrom Traded Material remains immaterial in the context of Gemfields' ownproduction. The Company will continue to refine and evolve the opportunities ofselling rough from other sources of supply.
Gemfields' next auction of (predominantly higher quality) rough emeralds is scheduled for March 2012. The results of the five higher quality rough emerald auctions held to date are summarised below:
AUCTION RESULTS JULY '09 NOVEMBER '09 JULY '10 DECEMBER '10 (HIGHER QUALITY) AUCTION AUCTION AUCTION AUCTION JULY '11 AUCTION Dates 20-24 Jul 23-27 Nov 19-23 Jul 6-10 Dec 2010 11-15 Jul 2009 2009 2010 2011 Location London, UK Johannesburg, London, UK Johannesburg, Singapore SA SA Type Higher Higher Higher Higher Higher Quality Quality Quality Quality Quality Carats offered 1.36 1.12 million 0.85 0.87 million 1.07 million million million Carats Sold 1.36 1.09 million 0.80 0.75 million 0.74 million million million No. of companies 23 19 37 32 38 placing bids
Average no. of bids per 10 13 18 16
16 lot No. of lots offered 27 19 27 19 25 No. of lots sold 26 14 24 18 18
Percentage of lots sold 96% 74% 89% 95%
72%
Percentage of lots sold 99.8% 97.2% 94.2% 86%
69% by weight
Percentage of lots sold 82% 76% 87% 99%
91% by value Total sales realised at USD 5.9 USD 5.6 USD 7.5 USD 19.6 USD 31.6 auction million million million million million Average per carat sales USD 4.40/ USD 5.10/ USD 9.35/ USD 26.20/ USD 42.71/ value carat carat carat carat carat
Ian Harebottle, CEO of Gemfields, commented:
"Gemfields is yet again delighted to announce robust sales from our most recentauction of rough emeralds from our Kagem emerald mine in Zambia. We areparticularly pleased with the fact that today's results have once again beatenthe previous record set in March's lower quality rough auction. The revenues ofUSD 42.6 million generated from our last two auctions have now exceeded therevenues from our entire prior financial year, demonstrating the continuedrising demand for Gemfields' rough emeralds and beryl. Our integrated approach combines industry-leading performance in three coreareas: mining, consistency of gemstone quality and volumes of supply, andpioneering coloured gemstone marketing and promotion to both consumers andretailers alike. With each auction it becomes increasingly clear that our teamand our industry partners are making significant progress in delivering on ourvision of ensuring that coloured gemstones take their place alongside diamondsand other luxury goods" Enquiries: Dev Shetty, CFO dev.shetty@gemfields.co.ukGemfields Plc Tel: +44 (0)20 7518 3402 Tarica Mpinga/Andrew Chubb Tel: +44 (0)20 7050 6500Canaccord Genuity Limited Neil Passmore Tel: +44 (0)20 7155 8630JP Morgan Cazenove Jos Simson/Lydia Eades Tel: +44 (0)20 7920 3150 Tavistock Communications
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