14th Nov 2014 10:15
LONDON (Alliance News) - Gemfields PLC shares price took a slight dip on Friday after it said it produced less at a lower grade and at a higher cost during the last quarter.
Gemfield shares were down 1.8% to 46.40 pence per share on Friday morning.
Emerald production from Kagem Mining Ltd, in which it has a 75% stake, during the quarter ended September 30, dropped to 6.3 million carats compared to 6.5 million carats in the same period a year earlier. The grade decreased to 214 carats per tonne compared to 302 carats per tonne.
Total operating costs at Kagem rose to USD10.3 million at a unit operating cost of USD1.63 per carat, compared to an operating cost of USD7.1 million at USD1.09 unit cost in 2013. Cash rock handling costs decreased slightly to USD2.91 per tonne from USD3.58 per tonne.
In August, the company held an emerald auction which generated revenue of USD15.5 million via the sale of 11.6 million carats at an average price of USD1.34 per carat.
It was a similar story at Montepuez Ruby Mining Limitada in Mozambique, in which it also has a 75% stake.
Ruby production from Montepuez remained flat from the previous year at 2.9 million carats, but the grade was significantly reduced to 41 carats per tonne compared to 118 carats a year earlier.
Total operating costs at Montepuez totalled USD4.3 million at a unit cost of USD1.48 per tonne, over double the USD1.8 million at a unit cost of USD0.62 per tonne in the third quarter of 2013. Cash rock handling costs also increased to USD6.93 per tonne from USD6.34 per tonne.
The next auction of rough ruby and corundum is scheduled to take place in December in Singapore, it said in a statement.
The company's wholly owned subsidiary, Fabergé Ltd, increased the value of its agreed sale orders by 50% during the period, and reduced operating costs by 26%, Gemfields said.
Fabergé continues to work on the expansion of its jewellery and timepiece collections and the introduction of objets, a new category. The related product launches are expected during the second half of the 2015 financial year.
"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," said Chief Executive Ian Harebottle.
At September 30, Gemfields had cash and cash equivalents of USD 32.2 million and total debt outstanding of USD 25.1 million.
By Joshua Warner; [email protected]; @JoshAlliance
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