12th Aug 2015 08:09
LONDON (Alliance News) - Gemfields PLC Wednesday said production from both its emerald mine in Zambia and its ruby mine in Mozambique substantially rose in the last financial year as the company continues to ramp up production to meet the "firm" demand for its product.
The miner said the Kagem emerald mine produced 30.1 million carats of emerald and beryl in the year ended June 30, rising from 20.2 million carats a year earlier, complimented by a better overall quality, it said.
"The 30.1 million carats of emerald and beryl produced at Kagem for the full year is the second highest level of production since Gemfields took control of Kagem in 2008 and underpins the increasing expertise we have built in the gemstone sector," said Chief Executive Ian Harebottle.
However, the average grade in the year fell to 242 carats per tonne compared to 253 carats per tonne.
Unit operating costs dropped to USD1.48 per carat from USD1.58 per carat whilst cash rock handling costs fell to USD2.90 per tonne of ore from USD3.70 per tonne after the company improved its mining efficiencies.
That brought total oeprating costs in the year to USD44.5 million from USD32.0 million, mainly due to the increased volume of production alongside exploration activity expenditure.
Gemfields said it plans to hold its next auction for its higher quality rough emeralds from Kagem between August 31 and September 4.
At the Montepuez ruby mine, production in the year came in at 8.4 million carats compared to 6.5 million carats a year earlier, but the average grade experienced a large fall to only 26 carats per tonne compared to 41 carats per tonne.
In terms of costing, unit operating costs at Montepuez was USD2.57 per carat, a large rise from USD1.12 per carat whilst cash rock handling costs experienced a small fall to USD6.16 per tonne from USD6.81 per tonne.
That brought total operating costs for the mine to USD21.6 million, leaping from USD7.6 million a year earlier due to the increase in the scale of exploration, mining and processing activities.
"Market demand for coloured gemstones remains firm, with our Mozambican rubies having enjoyed considerable success at each of the two ruby auctions held during the period," said Harebottle.
Faberge, its downstream division, experienced a 31% rise year-on-year in sales orders agreed and the divisions total operating costs fell 5% despite Gemfield's investing in the development of a new watch line that was launched in April, which the company said has been "well received".
Gemfields shares were down 1% to 64.33 pence per share on Wednesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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