TIDMGEM
RNS Number : 1689S
Gemfields PLC
19 December 2016
Gemfields plc
("Gemfields" or "the Company")
Results - Singapore Rough Ruby Auction
19 December 2016
Gemfields plc (AIM: GEM) is pleased to announce the results of
its auction of rough ruby extracted by Montepuez Ruby Mining
Limitada (which is 75% owned by Gemfields and 25% by local partner
Mwiriti Limitada) from the Montepuez ruby deposit ("Montepuez") in
Mozambique. The auction was held in Singapore from the 12(th) to
the 16(th) of December 2016 and was the first ruby auction of this
financial year.
Highlights
-- Auction revenues of USD 30.4 million (the fourth highest ruby auction result to date);
-- Average realised price of USD 27.79 per carat;
-- 1,094,406 carats sold (80% by weight or 85% by market value)
out of the total of 1,372,145 carats offered; and
-- Seven Montepuez auctions held since June 2014 have generated
USD 225.7 million in aggregate revenues.
Montepuez Ruby Auction
Gemfields' seventh auction of rough rubies and corundum from
Montepuez saw 39 companies placing bids. The auction offered high
and commercial grade rough rubies in both untreated and treated
form. All treated lots were offered using industry accepted
treatment techniques and on a fully disclosed basis.
The quality and quantity of the goods placed on offer was
developed in response to market feedback which showed growing
demand for rough rubies suited to the production of high quality
jewellery as well as larger volume production runs, thereby
allowing a broad cross-section of product to be placed on offer.
The improved reliability of supply and the consistency of the
Gemfields grading system continues to be well received by the
Company's clients as it facilitates reduced risk, improved
manufacturing efficiencies and an increased ability to meet
consumer demand.
The auction generated total revenues of USD 30.4 million at an
average realised price of
USD 27.79 per carat. Given the quality mix offered at this
auction comprised a blend of varying qualities and sizes of
material, a direct top-line comparison with the results of previous
auctions is not feasible. On a quality for quality basis however,
the per carat prices achieved continue to indicate good overall
global demand when compared to previous auctions.
The auction results, which saw 58 of the 76 lots offered being
sold, provided a high level of support for the Company's
understanding of the current market demand profile, which was
further supported by customer feedback received during the
auction.
The results of the five most recent Montepuez auctions held to
date are summarised below (and the prior auction results can be
found in the 'further information' section at the end of this
announcement):
AUCTION APRIL JUNE DECEMBER
RESULTS '15 AUCTION '15 AUCTION '15 JUNE DECEMBER
(RUBY AUCTION '16 '16
& CORUNDUM) AUCTION AUCTION
-------------- --------------- ----------------- ----------------- ---------------- ----------------
Dates 17-22 16-21 14-18 13 - 12 -
April June December 19 June 16 December
2015 2015 2015 2016 2016
-------------- --------------- ----------------- ----------------- ---------------- ----------------
Location Jaipur, Singapore Singapore Singapore Singapore
India
-------------- --------------- ----------------- ----------------- ---------------- ----------------
Type Rough Rough Rough Rough Rough
Ruby Ruby Ruby Ruby Ruby
& Corundum (Higher (Higher & Corundum & Corundum
(Commercial Quality) and Medium (Higher, (Higher
Quality) Quality) medium and Commercial
and Commercial Quality)
Quality)
-------------- --------------- ----------------- ----------------- ---------------- ----------------
Carats 4.03
offered million 72,208 92,136 1,601,145 1,372,145
-------------- --------------- ----------------- ----------------- ---------------- ----------------
Carats 3.96
Sold million 47,451 90,642 1,516,459 1,094,406
-------------- --------------- ----------------- ----------------- ---------------- ----------------
No. of
lots
offered 64 46 49 75 76
-------------- --------------- ----------------- ----------------- ---------------- ----------------
No. of
lots
sold 57 28 45 71 58
-------------- --------------- ----------------- ----------------- ---------------- ----------------
Percentage
of lots
sold 89% 61% 92% 95% 76%
-------------- --------------- ----------------- ----------------- ---------------- ----------------
Percentage
of lots
sold
by weight 98% 66% 98% 95% 80%
-------------- --------------- ----------------- ----------------- ---------------- ----------------
Percentage
of lots
sold
by market
value 81% 72% 95% 98% 85%
-------------- --------------- ----------------- ----------------- ---------------- ----------------
Total USD 15.9 USD 29.3 USD 28.8 USD 44.3 USD 30.4
sales million million million million million
realised
at auction
-------------- --------------- ----------------- ----------------- ---------------- ----------------
Average USD 4.02/carat USD 617.42/carat USD 317.92/carat USD 29.21/carat USD 27.79/carat
per carat
sales
value
-------------- --------------- ----------------- ----------------- ---------------- ----------------
The proceeds of this auction will be repatriated to Montepuez
Ruby Mining Limitada in Mozambique, with the royalties due to the
Government of Mozambique being paid on the full sales price
achieved at the auction.
Gemfields' aggregate consolidated revenues from all rough
gemstone auctions for the financial year to date stands at
approximately USD 41.1 million. Gemfields' auctions of rough
gemstones from the Kagem emerald mine in Zambia and from the
Montepuez ruby deposit in Mozambique have now generated USD 662.9
million in total revenues.
Ian Harebottle, CEO of Gemfields, commented:
"We are very pleased with the results of Gemfields' seventh
Montepuez ruby auction despite some of our customers being unable
to attend while they adjust to the regional demonetisation policy
changes they've experienced over the past few weeks.
The prices achieved at this auction, combined with the high
percentage of the value sold, fully support our view of ongoing
solid demand for responsibly sourced Mozambican rubies across key
markets and categories. The recent prices obtained for fine
cut-and-polished Mozambican rubies by international auction houses
further underscore the exciting trajectory for rubies from
Mozambique.
As always, we thank our customers, our business partners, our
host government and give credit to every member of our devoted and
hard-working global team."
Further Information
The results of the first two Montepuez auctions are summarised
below:
AUCTION RESULTS JUNE '14 AUCTION DECEMBER
(RUBY & CORUNDUM) '14 AUCTION
---------------------- ----------------- -----------------
Dates 12-17 June 3-8 December
2014 2014
---------------------- ----------------- -----------------
Location Singapore Singapore
---------------------- ----------------- -----------------
Type Rough Ruby Rough Ruby
& Corundum (Higher
(Higher, medium Quality)
and commercial
Quality)
---------------------- ----------------- -----------------
Carats offered 2.03 million 85,491
---------------------- ----------------- -----------------
Carats Sold 1.82 million 62,936
---------------------- ----------------- -----------------
No. of lots offered 62 41
---------------------- ----------------- -----------------
No. of lots sold 57 35
---------------------- ----------------- -----------------
Percentage of lots
sold 92% 85%
---------------------- ----------------- -----------------
Percentage of lots
sold by weight 90% 74%
---------------------- ----------------- -----------------
Percentage of lots
sold by market
value 79% 93%
---------------------- ----------------- -----------------
Total sales realised USD 33.5 million USD 43.3
at auction million
---------------------- ----------------- -----------------
Average per carat USD 18.43/carat USD 688.64/carat
sales value
---------------------- ----------------- -----------------
ENQUIRIES:
Gemfields janet.boyce@gemfields.co.uk
+44 (0)20 7518
Janet Boyce, CFO 7283
Grant Thornton UK LLP
Nominated Adviser
Philip Secrett/Richard Tonthat/Jamie +44 (0)20 7383
Barklem 5100
J.P. Morgan Cazenove
Joint Broker
+44 (0)20 7742
Jamie Riddell/James Deal 4000
BMO Capital Markets Limited
Joint Broker
Jeff Couch/Neil Haycock/Tom +44 (0)20 7236
Rider/Jenny Wyllie 1010
Macquarie Capital (Europe)
Limited
Joint Broker
Raj Khatri/Nick Stamp/Guy de +44 (0)20 3037
Freitas 2000
Tavistock
Jos Simson/Emily Fenton/ Barney +44 (0)20 7920
Hayward 3150
Notes to Editors:
Gemfields plc is a leading supplier of responsibly sourced
coloured gemstones and is quoted on the AIM market of the London
Stock Exchange (ticker: GEM).
Gemfields is the operator and 75 per cent. owner of both the
Kagem emerald mine in Zambia (believed to be the world's single
largest producing emerald mine) and the Montepuez ruby deposit in
Mozambique (one of the most significant recently discovered ruby
deposits in the world). In addition, Gemfields also holds a 50 per
cent. interest in the Kariba amethyst mine in Zambia, as well as
controlling interests in various other gemstone mining and
prospecting licenses in Zambia, Mozambique, Colombia, Ethiopia,
Madagascar and Sri Lanka.
Gemfields' outright ownership of the Fabergé brand - an iconic
and prestigious brand of exceptional heritage - enables Gemfields
to optimise positioning, perception and consumer awareness of
coloured gemstones, advancing the Group's "mine and market"
vision.
Gemfields has developed a proprietary grading system and a
pioneering auction and trading platform to provide a consistent
supply of quality coloured gemstones to the global downstream
markets. This is a key component of the Company's business model
which the Directors believe has played an important role in the
appropriate distribution and associated resurgence of the global
coloured gemstone sector.
www.gemfields.co.uk
This information is provided by RNS
The company news service from the London Stock Exchange
END
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