14th Apr 2015 08:49
LONDON (Alliance News) - Gemfields PLC Tuesday said production in the first quarter of 2015 rose at both its gemstone mines whilst its sales arm reported a significant increase in sales, and the company said it will be holding further auctions in India and Singapore during April and June this year.
The miner, processor and seller of coloured gemstones said emerald production from the Kagem mine in Zambia increased to 9.9 million carats in the quarter, compared to 3.6 million carats in the same quarter a year earlier. The increase was partially due to the average grade increasing to 355 carats per tonne from only 198 carats per tonne a year earlier.
Although total operating costs at Kagem increased to USD9.8 million from USD6.6 million due to increased production, unit operating costs fell to USD0.99 per carat from USD1.83 and cash operating costs also fell to USD1.15 per carat from USD1.38. Cash-rock handling unit costs almost halved to USD2.85 per tonne from USD4.90 per tonne.
In February, Gemfields generated USD14.5 million in revenue after selling lower quality rough emerald and beryl from the Kagem mine. The company plans to hold its next auction in Jaipur, India, in April alongside a separate auction of ruby and corundum from the company's Montepuez ruby mine in Mozambique.
Production in the quarter also increased from the Montepuez ruby mine to 1.4 million carats from 1.1 million carats, however the average grade fell to 18 carats per tonne from 38 carats per tonne.
Unlike the Kagem mine, costs significantly increased at the Montepuez mine due to the lower grades and the rise in production. Total operating costs nearly doubled to USD4.6 million from USD2.4 million whilst unit operating costs increased to USD3.29 per carat from USD2.18 and cash-rock handling unit costs rose to USD7.10 per tonne from USD5.63.
Alongside the auction of ruby and corundum from the Montepuez mine in Jaipur in April, another auction of higher quality product from Montepuez will be held in Singapore in June.
"This quarter has once again delivered pleasing results for Gemfields. We have achieved considerable increases in production volumes at both the Kagem and Montepuez mining operations, underpinned by constant growth in market demand for these products as is evidenced by the ongoing successes achieved at our auctions, all of which validates our decision to expand the scale of the operations across our key sites," said Chief Executive Ian Harebottle.
Faberge Ltd, the company's gemstone brand that uses the company's production to produce a range of products to sell in the jewellery market, reported a 64% rise in sales during the first quarter of 2015 whilst maintaining its operating costs. Gemfields did not supply any financial figures for the subsidiary.
"These results are further supported by the overwhelmingly positive response Fabergé has received from so many sources for its newly unveiled product lines and which was once again evidenced by a healthy increase in the number and value of sales orders placed," said Harebottle.
The Fabergé unit unveiled the Fabergé Pearl Egg, the first egg created in the 'Imperial Class' since 1917, at the Doha Jewellery and Watches Expo in Qatar in late February which was sold within hours to a well known pearl collector. Faberge is now focused on its next trade fair, Couture Las Vegas, which will be held between May 28 and June 2.
At the end of March, Gemfields had a cash balance of USD27.9 million with total outstanding debt of USD35.5 million.
Gemfield shares were up 1.9% to 60.10 pence per share on Tuesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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