Gemfields rough ruby auction generates US$33.5m

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Rough ruby and corundum gems sold in Singapore for US$18 per carat.

Gemfields secured total revenue of US$35.5million (£20.9m) at its first rough ruby and corundum auction held in Singapore from June 12 to 17 2014, with the average price per carat totalling US$18.43 (£10.87).

The collection of 2.03m carats offered were extracted by Montepuez Ruby Mining Limitada in Mozambique, in which Gemfields has a 75% interest.

A total of 55 companies placed bids on the available rough gems, a record for any Gemfields auction. Of those 2.03m carats on offer, 1.82m were sold representing 90% by weight.

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A considerable number of participants were first-time attendees of a Gemfields auction and travelled predominantly from Thailand, which has a long-standing relationship with the ruby trade.

Significantly, buyers from various other countries including the USA, India, Germany and Israel, many of whom have previously attended Gemfields’ emerald auctions, featured prominently at the Singapore ruby auction.

At the auction, Gemfields offered both untreated and treated material in lower quality ruby and corundum, with all treated lots being offered using industry-accepted treatment techniques and on a fully disclosed basis.

Chief executive officer of Gemfields, Ian Harebottle, commented: "We are naturally delighted to announce the stellar results of our first auction of rubies and corundum from Montepuez in Mozambique. Since completing the acquisition of Montepuez – our first ruby deposit – in 2012, we have swiftly brought this greenfield asset into the operational and revenue-generating phases, producing over eight million carats and simultaneously developing a first-of-a-kind, proprietary ruby grading system.”

"The extension of our transparent and well-regarded auction platform into the ruby trade has been very well received by the market, with an expanded customer base now having access to reliably supplied and consistently graded rough emeralds, beryl, rubies and corundum. Importantly, the proceeds of this auction will be fully repatriated to Mozambique, to Montepuez Ruby Mining Limitada, in which Gemfields owns 75% and with all royalties due to the Government of Mozambique being paid on the full sales price achieved at the auction.”

Gemfields’ aggregate consolidated revenues from rough gemstone sales for the financial year ending 30 June 2014 now exceed US$143m (£84.3m). Cumulative costs incurred at Montepuez to date, including acquisition costs, capital expenditure and operating costs stand at approximately US$34m (£20.06m) in total.

The next auction of rough ruby and corundum is expected to take place before December 31 2014.

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