Gemfields Q1 upbeat with Kagem production up 33%

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Ian Harebottle says company will continue to address Zambian issues.

Gemfields has announced its unaudited results for the first three months of 2013, with increased production at its Kagem mine, record prices for lower-quality stones and its first rough ruby auction in the pipeline.

The gemstone producer, which currently mines Zambian emeralds and beryls and amethysts, has outlined the highlights of Q1 2013 in a market update released today.

Highlights include a 33% increase in production at its Kagem emerald mine, totalling 6.5 million carats in the quarter ending March 31, up from 4.9 million carats in the quarter ending 31 March 2012.

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As of March 31 2013 Gemfields had cash of US$22.1 million (£14.5m) and total debt outstanding of US$ 11.0 million (£7.2m).

The grade of the output for the quarter increased to 265 carats per tonne from 236 carats per tonne in the quarter to 31 March 2012, while unit production costs for the quarter reduced by 34% to US$0.56 (36p) per carat.

Gemfields recorded revenues of US$15.2 million (£9.9m) at its recent auction in Lusaka, Zambia – a record for lower quality auctions – with its next auction of higher quality Zambian emeralds due to take place between June 10 and 14 in Singapore.

The company will also host the 2013 Zambian Emerald Summit in Lusaka, at the end of May as it seeks to find a resolution to the Zambian government’s Ministry of Mines plans to ban Zambian stone auctions outside of the country.

Gemfields has also carried out bulk sampling activities at the Montepuez ruby deposit in Mozambique and says it first auction of rough rubies is likely to take place in the first calendar quarter of 2014.

Ian Harebottle, chief executive of Gemfields, said: "Gemfields is pleased to report the results of another positive quarter for the Company. Gemstone carats produced at Kagem increased 33% when compared to the same quarter in the last financial year.

"We also achieved record revenues from our most recent auction of lower quality rough emerald and beryl, despite a small drop in the average per carat price achieved. We continue to seek to address the possible ban on foreign auctions by the Ministry of Mines in Zambia and – in that light – we are delighted to be hosting the first-of-its kind 2013 Zambian Emerald Summit in Lusaka at the end of this month to facilitate discussion among all of the key emerald sector stakeholders.”

Gemfields also acquired jewellery house Fabergé on January 28 this year, with the integration of Fabergé into the Gemfields family described as "well underway". Gemfields said the acquisition will allow it to take its vision for coloured gemstones to the next level, with the  Fabergé name helping to "boost the international presence and perception of coloured gemstones" and advance the company’s mine and market vision.
 

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