Production falls in Gemfields three month report

Gemfields-zambia-mine.jpg

Rise in operating costs off-set by 50% sales orders boost for Fabergé.

Gemfields has released its operational update for the quarter ended September 30 2014, revealing total gains of 6.3 million carats of emerald and beryl, and 2.9 million carats of ruby and corundum.

Production for the 75%-owned Kagem Mine slipped slightly from 6.5m carats in the quarter ended September 30 2013, to 6.3m carats. This represents a fall from 302 carats per tonne in 2013 to 214 carats per tonne in the three months ended September 30 2014.

Operating costs also increased to $10.3m (£6.5m), compared to $7.1m (£4.5m) in the quarter ended September 2013, while unit costs rose to $1.63 (£1.03) per carat.

Story continues below
Advertisement

At auction, Gemfields’ lower quality rough emeralds and beryl generated $15.5m (£9.8m) in August 2014. 11.6m carats were sold for an overall average of $1.34 (£0.85) per carat. An auction of higher quality rough is expected to take place before November 17 2014 in Lusaka, Zambia.

In terms of rubies, production at the 75%-owned Montepuez mine in Mozambique, totalled 2.9m carats for the quarter, versus an identical amount in the preceding year. However, the company experienced a sharp drop in grade per tonne, from 118 carats in the quarter ended September 30 2013 to 41 carats per tonne in 2014.

Total operating costs also rose sharply at Montepuez to $4.3m (£2.7m), compared to $1.8m (£1.14m) last year. Unit operating costs totalled $1.48 (£0.94) per carat, compared to $0.62 (£0.39) per carat in the quarter ended September 2013.

Gemfields’ next auction of rough ruby and corundum is scheduled to take place in December 2014.

Wholly owned Fabergé Ltd saw the value of sales orders during the quarter increase by 50% versus the comparative quarter in 2013, while operating costs also fell by 26%. Additionally, Gemfields entered into a joint venture with East West Gem Investment Limited in September 2014 in order to develop its Sri Lankan business.

Gemfields chief executive officer, Ian Harebottle, commented: “Gemfields enjoyed a solid quarter of gemstone production notwithstanding lower grades than those in the same quarter last year. Market conditions remain upbeat with ongoing enthusiasm from the trade, retailers and consumers for responsibly supplied coloured gemstones.

We’ve been pleased to see new world records – on a per carat basis – achieved by both sapphires and rubies at recent auctions held by Sotheby’s in Hong Kong and Geneva respectively. In particular, the sale of a 8.62 carat Burmese ruby has raised the world record for rubies at auction by 81% to $997,727 (£635,000) per carat.”

 

Authors

*

Related posts

Top