Final audited results for the year to 30 June 2015

Gemfields plc

("Gemfields" or the "Company" or the "Group") (AIM: GEM)

Final audited results for the year ended 30 June 2015

7 October 2015

Financial Highlights

· Revenue of US$171.4 million (2014: US$160.1 million);

· EBITDA(a) of US$64.4 million (2014: US$59.3 million);

· Profit after tax of US$12.3 million (2014: US$16.3 million);

· Cash at bank of US$28.0 million as at 30 June 2015 (2014: US$36.8 million); and

· Estimated cost of inventory on hand, excluding fuel and other consumables, of US$101.1 million (2014: US$86.3 million).

a) EBITDA - Earnings before interest, tax, depreciation, amortisation and impairment.

Operational Highlights

Emeralds:

· Production summary for 75% owned Kagem Mining Limited ("Kagem"), Zambia, for the year:

o Annual production of 30.1 million carats of emerald and beryl (2014: 20.2 million carats);

o Average grade of 242 carats per tonne, inclusive of ore from bulk sampling pits (2014: 253 carats per tonne); and

o Decrease in unit operating costs from US$1.58(b) per carat to US$1.48 per carat.

· In May 2015, Gemfields' commendable safety track record was once again recognised by the Mines Safety Department of Zambia who awarded Kagem with a safety certificate recognising 3.5 million reportable injury free shifts. Lost Time Injury Frequency ("LTIF") of zero.

· In September 2015, a Competent Persons Report ("CPR") was issued by SRK Consulting (UK) Limited ("SRK") and included an updated Joint Ore Reserves Committee ("JORC") (2012) Resource and Reserve estimate and accompanying statements projecting a 25 year Life of Mine ("LoM") open pit operation producing (on a 100% attributable basis):

o Measured, Indicated and Inferred Mineral Resource of 1.8 billion carats of emerald and beryl at an in-situ grade of 281 carats per tonne;

o Proven and Probable Ore Reserves of 1.1 billion carats of emerald and beryl at a diluted ore grade of 291 carats per tonne; and

o A Net Present Value ("NPV") of US$520 million (based on a 10% discount rate).

Rubies:

· Production summary for 75% owned Montepuez Ruby Mining Limitada ("Montepuez"), Mozambique, for the year:

o Annual production of 8.4 million carats of ruby and corundum (2014: 6.5 million carats), increase in processed volumes primarily due to continued upgrades to the wash plant design; and

o Grade of 26 carats per tonne (2014: 41 carats per tonne); and

o Increase in unit operating costs from US$1.12 per carat to US$2.57 per carat, with the reduced grade and increased unit costs being directly attributed to a greater proportion of lower grade but significantly higher quality alluvial deposit ore being processed during the year.

· Maiden JORC Resource and Reserve Statement for Montepuez announced in July 2015 (on a 100% attributable basis):

o A total Indicated and Inferred Mineral Resource of 467 million carats;

o Probable Ore Reserves of 432 million carats of ruby and corundum, giving a projected 21 year LoM; and

o An NPV of US$996 million (based on a 10% discount rate).

Fabergé:

· The Fabergé Pearl Egg, the first egg created in the 'Imperial Class' since 1917, was unveiled at the Doha Jewellery and Watches Expo in Qatar in late February 2015 and was sold within hours of unveiling.

· Fabergé took part in the prestigious art, antique and design fair 'Masterpiece London' for the first time this year. The event took place from 25 June until 1 July 2015 at the Royal Hospital Chelsea. The three principal product categories: jewellery, timepieces and objets d'art, were showcased alongside loose gemstones from the mines of Gemfields.

· Fabergé launched four new timepiece collections at BaselWorld 2015 to great acclaim. The Fabergé Lady Peacock high complication watch and the 'Summer in Provence' high jewellery ladies watch qualified as entrants for the prestigious Grand Prix d'Horlogerie de Genève, one of the most revered watch competitions in the world. Results will be announced in Geneva at the end of October 2015.

Post period end:

· Binding agreements entered into to acquire controlling interests in two emerald projects with operations and prospects located predominantly in the Boyacá state in Colombia.

o Project 1: Coscuez Emerald Mine, Boyacá Department, Colombia. Conditional acquisition of a 70% interest in a Colombian company which will, on completion, hold mining contract no. 122-95M (the "Coscuez Licence", which is presently held by Esmeracol S.A.); and

o Project 2: Selected exploration prospects held by ISAM Europa S.L. Acquisition of 75% and 70% interests in two Colombian companies holding rights in respect of mining licence applications and assigned concession contracts respectively.

b) From 1 July 2014, the calculation of total operating costs was amended to include depreciation. The comparative unit operating costs have been restated.

Ian Harebottle, CEO of Gemfields, commented:

"I am pleased to present yet another strong year of growth and performance for Gemfields in which we have achieved record revenues and met or exceeded production guidance at each of our Kagem emerald and Montepuez ruby operations. Demand for coloured gemstones remained strong throughout the year, as is clearly demonstrated by the results of the six auctions held during the period which saw various record per carat prices being achieved. This is a reflection of our continued marketing campaigns, the market's recognition of the quality of our coloured gemstones and the consistent way in which we are able to support the downstream sector's business needs.

Post year-end we have announced two independent studies for Kagem and Montepuez, with both of these serving to further highlight Gemfields' long term growth potential. At Kagem, we have announced what is believed to be the world's first gemstone reserve in the proven category together with a 25 year life of mine and increasing production to 40-45 million carats per annum, while at Montepuez our maiden Resource and Reserve Statement has provided a 21 year mine life producing 20 million carats per annum.

Global appreciation and demand for coloured gemstone continues to increase at a steady pace, our pipeline of growth projects remains exceptionally strong and our recent move into Colombia reflects our commitment to maintaining our position as the market leader in the global coloured gemstone sector."

Webcast presentation

Gemfields will be hosting a presentation for analysts at 11:00 BST today at the offices of Reed Smith, The Broadgate Tower, 20 Primrose Street, London EC2A 2RS.

A live webcast of the results presentation will also be available at the link below and include audio via a conference call.

Webcast: https://pgi.webcasts.com/starthere.jsp?ei=1076225

A recording of the webcast will be subsequently made available on the Company's website: www.gemfields.co.uk and at the link above.

The Chairman's statement and the primary financial statements are set out below and are available to view on the Company's website at www.gemfields.co.uk. The full financial statements will be sent to shareholders in due course.

ENQUIRIES:

Notes to Editors:

Gemfields plc is the world's leading supplier of responsibly sourced coloured gemstones and is quoted on the AIM division of the London Stock Exchange (ticker: GEM) where it is a constituent of the AIM50 index.

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 mine 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 Fabergé - an iconic and prestigious brand of exceptional heritage - enables Gemfields to optimise positioning, perception and consumer awareness of coloured gemstones, advancing the wider 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

Chairman's Statement

Dear Shareholder,

I am delighted to present the 2015 Financial Results which outlines another landmark year for Gemfields.

Your Company generated increased revenues of US$171 million and a strong EBITDA of US$64 million, underpinned by record-breaking auction results, a significant uplift in gemstone production, and further expansion projects coming online.

The global coloured gemstone market continues to demonstrate impressive growth, with global imports of finished emerald, ruby and sapphire goods accounting for as much as 58% of the worldwide coloured gemstone and pearl market at US$5 billion. We have been relentless in our ambition to become the global leader in coloured gemstones and as a result, Gemfields is increasingly being recognised as the supplier of choice for many of the world's leading jewellery houses, manufacturers and luxury brands.

Demand for our responsibly sourced coloured gemstones remains high. The six auctions we have hosted in this financial year, three of emeralds and three of rubies, have yielded aggregate revenues of US$153 million. This superb performance by Gemfields provides further evidence of the continued growth, positive momentum and significant opportunity inherent within the coloured gemstone sector.

Without question, the past year has seen our ruby mining business in Mozambique flourish in both financial and operational performance. Although it is still very early days at Montepuez, the response from the market for fine Mozambican rubies has been extremely positive. Since the inaugural ruby auction in June 2014, Gemfields has held a further three ruby auctions during the period, with the four auctions held to date generating a combined US$122 million in revenues. In December 2014, our higher quality rubies achieved an average price of US$688.64 per carat - the highest price ever recorded at any Gemfields auction. While the ruby prices achieved are pleasing, our Mozambican rubies remain very competitively priced when compared to their Burmese counterparts, which bodes well for future demand and the potential for continued price growth.

The full potential of the Montepuez ruby deposit was formally recognised in the first JORC compliant Mineral Resource and Ore Reserve Statement published in July 2015, which shows Probable Ore Reserves of 432 million carats of ruby and corundum; sufficient for 21 years of mining at an increased rate of 20 million carats per annum. The significance of this report is a milestone event for the business and an exciting moment for global ruby supply as a whole.

Montepuez is already having a positive impact on the global ruby market and with the potential for operations to progress into full scale production over the next 24 months, the outlook is extremely encouraging. I would like to thank our team, our 25% partner Mwiriti and the Mozambican government for their continued support and expertise in bringing this project to fruition. While there is still a great deal of work to be done there is considerable upside yet to be realised on behalf of our shareholders.

Our Kagem emerald mine achieved a remarkable 49% increase year-on-year in emerald and beryl production to 30.1 million carats. This is the second highest annual production achieved since we first took over operational control at Kagem in 2008 and is an outstanding result for the Gemfields team. Zambian emeralds continue to enjoy firm demand and have become highly sought after in the international markets, underpinned by further increases in per carat prices for both lower and higher quality emeralds from Kagem during the year. The Company's 19 auctions of emeralds and beryl mined at Kagem since July 2009 have generated US$360 million in total revenues.

The SRK Competent Persons Report announced in September 2015 includes the first recorded Measured Mineral Resource and Proven Ore Reserve Statement for the Kagem Mine (and possibly the first classification of this nature for the entire coloured gemstone sector) and further underlines the importance of the Kagem mine to the global supply of emeralds. The report confirmed a 25 year life of mine with a Measured, Indicated and Inferred Mineral Resource of 1.8 billion carats of emerald and beryl at an in-situ grade of 281 carats per tonne for the Kagem mine as a whole.

Since embarking on an integrated, global strategic plan for our jewellery business, I am pleased to report that Fabergé has continued to make encouraging progress towards sustainable growth and future profitability. We remain focused on optimising the business, re-establishing the brand at the highest level of the luxury goods market, and harnessing the Fabergé name to boost the international presence and appreciation for coloured gemstones. Significant achievements over the past 12 months include the launch of new product lines and the expansion into two important luxury categories, namely timepieces and objets d'art, to industry acclaim. However, continued investment in the business coupled with a turbulent political environment in the key markets of Russia and Ukraine has naturally had some level of impact on Fabergé's overall sales during the year.

Our ambition to supply the global market with the red, blue and green 'traffic light' of coloured gemstones took a step closer in September 2014 when we were able to announce our move into Sri Lankan sapphires. Sri Lanka is recognised as one of the most important sources of higher quality sapphires in the world today and we look forward to introducing Sri Lankan sapphires to the Gemfields auction platform in the not too distant future.

Post the financial year end we announced our move into Colombia via the proposed acquisition of the Coscuez Emerald Mine as well as selected greenfield exploration prospects. Colombia needs little introduction, it is home to some of history's most legendary emerald mines and the potential entry into this country is in line with our strategy of expanding Gemfields' global footprint. The acquisitions offer exciting long term growth opportunities and both parties are working hard to conclude the agreements.

With further emerald and ruby auctions scheduled to take place in the latter part of 2015, continued organic growth at both Kagem and Montepuez, and a clear focus on strategic acquisitions and expansion, we look forward to yet another strong and successful year ahead.

Finally, I would like to take this opportunity to congratulate all of our hardworking and dedicated employees, management team, project partners and host countries, on a very successful year for Gemfields.

Graham Mascall 

Non-Executive Chairman

6 October 2015

Operational and Financial Review

Auction revenue

Gemfields offers its rough emerald and ruby production to chosen market participants by way of sealed bid auctions where all gemstones tendered are certified by Gemfields as being sourced from the Gemfields' mines and any applied gemstone treatments and sources of origin are fully disclosed. In addition, Gemfields also offers emeralds obtained in the open market from various sources at auction with these goods being clearly marked as such. Many of the world's leading gemstone houses and lapidaries are invited to attend these auctions.

During the financial year ending 30 June 2015, Gemfields held three rough emerald and beryl auction as well as three rough ruby and corundum auctions at various key locations across the globe:

· 5-8 August 2014: Lower quality rough emerald and beryl, Lusaka, Zambia

· 13-17 November 2014: Higher quality rough emerald, Lusaka, Zambia

· 3-8 December 2014: Higher quality rough ruby, Singapore

· 24-27 February 2015: Lower quality rough emerald and beryl, Lusaka, Zambia

· 17-22 April 2015: Lower quality rough ruby and corundum, Jaipur, India

· 16-21 June 2015: Higher quality rough ruby, Singapore

Emerald auction results

The first emerald auction during the financial year, held in August 2014, was an auction of predominantly lower quality rough emerald and beryl. Out of 12.1 million carats offered, 11.6 million carats were sold, generating revenues of US$15.5 million. Including the lower quality beryl, the overall realised price was US$1.34 per carat.

The second emerald auction, held in November 2014, was of predominantly higher quality rough emerald. Out of 0.60 million carats offered, 0.53 million carats were sold, generating revenues of US$34.9 million. The auction yielded an overall average price of US$65.89 per carat, a record value for a higher quality Gemfields emerald auction, which represented a significant increase over the previous high of US$59.31 per carat (achieved at the February 2014 auction).

At the third emerald auction, in February 2015, revenues of US$14.5 million were realised on the sale of 3.9 million carats of predominantly lower quality emerald and beryl, which in turn also represented another record overall unit price of US$3.72 per carat for emerald and beryl of this quality.

The auction results are summarised in the following table:

Auction results (emerald and beryl)

Ruby auction results

In December 2014, Gemfields held an auction of predominantly higher quality rough ruby in Singapore. A total of 50 participants bid in what was Gemfields' second-ever ruby auction, the first having been held in June 2014. The auction generated revenues of US$43.3 million for 62,936 carats sold out of the total of 85,491 carats offered. The average realised price of US$688.64 per carat was the highest price ever achieved at any of Gemfields' gemstone auctions.

In April 2015, Gemfields held an auction of predominantly lower quality rough ruby and corundum in Jaipur, India. The auction generated revenues of US$15.9 million for 3.96 million carats sold out of the total of 4.03 million carats offered. The average realised price was US$4.02 per carat.

Gemfields' third rough ruby auction during the financial year was held in Singapore in June 2015. The auction generated total revenues of US$29.3 million for 47,451 carats sold out of the total of 72,208 carats offered. The average realised price was US$617.42 per carat. The auction results, which saw 28 of the 46 lots offered being sold, indicated further opportunities to educate the market on the Company's products in order for the market to fully appreciate the rarity and value of all of the gemstones from Montepuez. This in turn further supports the possibility of additional ruby price increases going forwards, along the lines of what has been achieved in emerald sales.

The auction results are summarised in the following table:

Auction results (ruby & corundum)

Amethyst auction results

Kariba Minerals Limited ("Kariba"), one of the world's largest producing amethyst mines, located in Zambia, achieved good quality production of amethyst during the year, with an auction of higher quality amethyst being held in Lusaka in February 2015. A total of 27.7 million carats of higher quality amethyst extracted from Kariba were offered, with 13 out of the total 14 lots sold. This generated auction revenues of US$0.45 million and realised an overall average value of US¢1.77 per carat.

Kagem Mining Limited, Zambia

Kagem is believed to be the world's largest producing emerald mine and is 75% owned by Gemfields, with 25% owned by the Government of the Republic of Zambia. Kagem is located in the Ndola Rural Emerald Restricted Area and lies south of Kitwe and west of Ndola in Zambia's Copperbelt Province. Kagem's licence area comprises almost 41 square kilometres and the Chama pit supplies approximately 20% of global emerald production.

Mining

During the year, Kagem progressed its fourth high wall pushback programme at the Chama pit. The programme commenced in 2014 and was designed to expose the emerald and beryl mineralisation at the south-eastern edge by 75 metres for open pit ore production for at least two to three years at the current rate of operations. The programme has progressed well and was completed in September 2015.

Following the updated Resource and Reserve Statement from SRK completed in September 2015, Kagem has updated its mine plan and is now planning for a continued waste stripping of the Chama pit over the life of mine. The accelerated waste stripping will provide for approximately two to three years of ore available for mining at any given point in time.

Gemstone production for the year increased 49% year on year to 30.1 million carats of emerald and beryl (2014: 20.2 million carats). This production was realised from the Chama pit (27.8 million carats) and the bulk sampling projects (2.3 million carats). The increased gemstone production is predominantly as a result of improved volumes of ore mined throughout the year. The first six months of financial year 2015 saw 12.1 million carats produced compared to 10.4 million carats during the comparative period in the prior year, followed by a record 18.0 million carats of production during the six months ended June 2015 compared to 9.8 million carats mined in the comparative period. The increase in annual carat production is in part due to the fluctuating nature of gemstone deposits as well as a result of the better rain management employed by Kagem during the rainy season. Kagem provides annual guidance to the market of 25 to 30 million carats of emerald and beryl and this year produced the second highest annual production of carats since Gemfields acquired Kagem in 2008, only surpassed by the 33 million carats produced in 2011. Kagem has the potential to increase production to around 40 to 45 million carats of emerald and beryl in the forthcoming years, subject to the required level of investment and finalisation of the upgrades to the open pit mine plan.

Total operating costs were US$44.5 million (2014: US$32.0 million). Unit operating costs were US$1.48 per carat (2014: US$1.58 per carat). On a cash basis unit, operating costs were US$1.45 per carat (2014: US$1.36 per carat) largely driven by the significant increases in scale of the overall mining operations. Cash rock handling unit costs decreased by 22% to US$2.90 per tonne (2014: US$3.70 per tonne).

JORC Resource and Reserve

In September 2015, Gemfields announced an updated JORC-compliant Resource and Reserve Statement. The Mineral Resource Statement for the Kagem Mine as at 31 May 2015 is given in the table below and is based on detailed geological modelling of the mineralisation types, and the application of factors derived from the on-going mining and bulk sampling. The report, which is shown on a 100% attributable basis and where Mineral Resources are inclusive of Ore Reserves, confirmed an Indicated and Inferred Mineral Resource of 1.8 billion carats of emerald and beryl at an in-situ grade of 281 carats per tonne.

Note: Resources and Reserves are shown on a 100% attributable basis. Mineral Resources are inclusive of Ore Reserves.

For the economic analysis as part of the CPR, SRK has constructed an independent Technical Economic Model on a 100% equity basis ("TEM"), described below. Highlights of the TEM include:

· 25 year LoM for Chama pit and seven years for Fibolele, yielding 1.1 billion carats of emerald and beryl;

· A post-tax net-present-value ("NPV") of US$520 million, based on a 10% base-case discount rate and mineral royalty of 9%;

· Projected revenue of US$4.3 billion and projected operating costs of US$1.0 billion in real terms; and

· Capital expenditure of US$206 million and stripping spend of US$310 million in real terms over the LoM.

Capital expenditure

During the year, a total of US$34.8 million (2014: US$11.9 million) was invested in new mining and ancillary equipment, deferred stripping costs, as well as in improving Kagem's facilities and infrastructure. Of the US$34.8 million, Kagem invested US$20.8 million on deferred stripping costs, US$7.6 million in additional mining equipment to increase the production capacity of Kagem, with the remaining US$6.4 million spent on replacing existing mining and ancillary equipment.

Processing

The Kagem wash plant achieved a total of 5,247 hours of operation (2014: 4,788 hours). As part of the ongoing efficiency drive at Kagem, the wash plant processing capacity and its security arrangements are being upgraded with a view to increasing the plant output from 33 tonnes per hour to a potential 66 tonnes per hour. This will lead to an increase in optimisation of the process flows, increased operating flexibility and enhanced overall production capacity and productivity at Kagem. The upgrade is expected to be completed by the end of the 2015 calendar year.

The modified and new picking belts are located within an improved washing facility, leading to a better working environment with enhanced levels of ventilation, lighting and noise reduction, resulting in fewer distractions and better overall control. These improvements will also result in reduced maintenance costs, more efficient gemstone selection from the belts and enhanced overall security.

Kagem's annual production performance is summarised in the table below:

Geology and exploration

While the Chama pit remains the main focus with respect to current production activities and contains the bulk of the known resources, Gemfields' mineral resource strategy continues to focus on identifying various opportunities within its mining licence area that are available for further assessment by way of bulk sampling and other exploration programmes.

The Libwente pit, located three kilometres from the Chama pit, is one of two new bulk sampling projects at Kagem and has the potential to extend the Fwaya Fwaya Pirala belt (the same talc-magnetite schist ("TMS") which is mined at the Chama pit) in a north-easterly direction. Exploration work undertaken in recent years delineated shallow-dipping TMS varying in thickness from eight to ten metres and occurring at a depth range of 20 to 70 metres. Bulk sampling of this pit commenced in 2014 and has progressed well, resulting in an increase in overall scale of operations during the year. The pit was developed by the removal of the overburden which has recently reached the productive level of top TMS. A total of 2.0 million tonnes was excavated during the year. 161 thousand carats, at a grade of 37 carats per tonne, were produced from five contacts indicating the presence of potential productive system.

The Fibolele pit, located 2.7 kilometres from the Chama pit also saw increased gemstone production and bulk sampling during the year. Based on the encouraging results achieved during the first of two phases of bulk sampling, a third phase has now been planned. This will increase the pit size to 590 metres in length and 50 metres in depth, with a planned stripping ratio of 57:1. A total of 2.1 million carats were excavated at a grade of 167 carats per tonne during the year.

Security

The security environment is constantly evolving given changes to workflows and production scenarios. Security measures are continuously reviewed and updated in order to minimise the security risk. By staying abreast of the latest technological developments, Kagem is able to consistently improve its surveillance technology, an important deterrent against pilferage and pivotal in ensuring the safeguarding of assets.

Key security initiatives implemented during the year include extensive upgrades to the CCTV infrastructure in the mining pit, security gates and sort house and the implementation of professional CCTV monitoring personnel at a CCTV central control room. These measures have yielded considerable improvements but with the unfortunate and associated consequence of an increase in the number of apprehensions.

Safety and environment

Mining operations inherently impact on the environment and pose some level of risk to the health and safety of employees. Kagem prides itself on its ability to produce emeralds that are mined in a responsible, transparent and safe manner with minimised impact on the natural environment. In May 2015, Gemfields' track record in safety management was once again recognised by the Mines Safety Department of Zambia who awarded Kagem a safety certificate recognising 3.5 million shifts free of reportable injuries, an LTIF of zero for the year (2014: zero).

Montepuez Ruby Mining Limitada, Mozambique

The Montepuez ruby deposit is located in the north-east of Mozambique in the Cabo Delgado Province. Covering approximately 33,600 hectares, it is believed to be the most significant recently discovered ruby deposit in the world. MRM holds a 25 year mining and exploration licence over the area, granted by the Government of Mozambique in November 2011.

Montepuez has been undertaking exploration within the licence area since 2012. The main sources of exploration, following on from the completed ground and areal magnetic studies, include auger and diamond drilling, small scale pits and bulk sampling. These programmes have been supplemented by geological mapping, satellite imagery and geophysical and soil geochemistry surveys.

Mining

The Montepuez operation primarily comprises a number of large bulk sampling pits split between the two main operating areas, Mugloto and Maninge Nice. Bulk sampling is carried out as a conventional open-pit gravel operation with excavators, loaders and trucks. Loaded trucks haul ore to the stockpiles at the wash plant while waste is backfilled into the mined-out areas.

During the year, a technical review was carried out by Montepuez to further optimise the mining of rubies and corundum. The technical review resulted in a decision to expand the scale of the operation including additions to the fleet which saw an increase in total rock handling to an average of 250 thousand tonnes per month compared to 130 thousand tonnes per month in the previous financial year.

Montepuez's key operational parameters for the financial year are summarised below:

Total tonnes excavated during the financial year was 3.0 million tonnes (2014: 1.6 million tonnes), made up of 0.4 million tonnes of ore and 2.6 million tonnes of waste. The overall stripping ratio was 5.8 (2014: 2.9). Around 74% of the total rock excavated was focused on the Mugloto block, 23% on the Maninge Nice block and the remaining 3% from other pits. The increased focus on the Mugloto block was the result of the discovery of higher value deposits spread over a large area primarily in the alluvial gravel beds. This resulted in an overall decrease in grade, supported by a considerable increase in the value of goods mined.

Approximately 325 thousand tonnes of ore were processed by the wash plant (2014: 158 thousand tonnes) with an average grade of 26 carats per tonne (2014: 41 carats per tonne).

A total of 8.4 million carats of ruby and corundum were produced during the financial year (2014: 6.5 million carats). Of the total 8.4 million carats, 8.2 million carats were recovered from the Maninge Nice primary and secondary ore and 0.2 million carats from the Mugloto secondary ore.

Total operating costs were US$21.6 million (2014: US$7.3 million). Unit operating costs were US$2.57 per carat (2014: US$1.12 per carat). On a cash basis, unit operating costs were US$2.18 per carat (2014: US$1.68 per carat). Cash rock handling unit costs decreased by 10% to US$6.16 per tonne (2014: US$6.81 per tonne).

Processing

Ore excavated from the Maninge Nice and Mugloto pits is brought to a centralised stock yard adjacent to the wash plant. During the year, an additional rinsing screen was installed to replace the dry screen and improve the performance and capacity of the wash plant during the rainy season. This helped support and increase processing performance achieved over the financial year to 100 tonnes per hour. Further upgrades are proposed to increase the capacity to 150 tonnes per hour, with an expected operational run rate of 120 tonnes per hour.

A water reservoir and large dam have been constructed adjacent to the wash plant for the collection of rain water. Seven large-diameter water boreholes across the licence area, combined with the utilisation of meteoric water collected within the exposed bulk sampling pits, further supplement water supplies.

Montepuez is considering a further increase to its current processing capacity through the installation of a second wash plant with a 250 tonnes per hour capacity, which will operate at 200 tonnes per hour. This will increase the overall project processing capacity to 320 tonnes per hour. The new process plant will incorporate washing, screening and dense media separation ("DMS")/optical sorters to recover the rubies, together with fine tailings dewatering.

The Mineral Resource Statement for Montepuez as at 1 January 2015 is shown below.

Mineral Resource Statement

Note: Resources and Reserves are shown on a 100% attributable basis. Mineral Resources are inclusive of Ore Reserves.

Geology and exploration

The rubies at Montepuez are found in two mineralisation types, namely: primary amphibolite and secondary gravel bed.

The Montepuez mining area comprises rocks ranging from granitic to amphibolitic in composition, with scattered quartzite and marble occurrences. On a regional scale, the rocks are highly folded into tight isoclinal folds of all scales, subsequently cut by a number of north-east to south-west trending shear zones. Due to the complexity of folding, the host rocks display more open folding in the Montepuez mining area.

To date, rubies from Montepuez differ geologically from many of the rubies traditionally available in the international market in that they are amphibolite related rather than marble or basalt related.

Rubies from the primary amphibolitic mineralisation are typically tabular hexagonal crystals, with a strong basal cleavage. The gemstones are highly fractured and included. Typically, the production from primary mineralisation is lighter, pink colour, and is often classified as sapphires. In contrast, the production from the secondary gravel bed deposit is dark red in colour, more transparent, with fewer inclusions, and often rounded in shape.

The secondary deposit is currently interpreted to be related to a flood event, which was later reworked by a braided river system. The source of the secondary deposit is yet to be identified. It is thought to lie outside of the area currently delineated by exploration drilling and pitting.

Maiden Resource and Reserve Statement

During the year, Gemfields commissioned SRK to prepare a CPR covering a total area of 36 square kilometres out of the total mining concession area of 336 square kilometres. In July 2015, Gemfields announced its first JORC-compliant Resource and Reserve Statement at Montepuez, well ahead of its target completion date of December 2015.

The report confirmed Montepuez was host to an Indicated and Inferred Mineral Resource of 467 million carats of ruby and corundum at an in-situ grade of 62.3 carats per tonne. Furthermore, the report confirmed Probable Ore Reserves of 432 million carats of ruby and corundum at a diluted ore grade of 15.7 carats per tonne.

Ore Reserves

As at 1 July 2015, SRK notes that the Montepuez ruby deposit has Ore Reserves of 2.2 million tonnes of primary material grading at 114.9 carats per tonne and 25.4 million tonnes of secondary material grading at 7.1 carats per tonne.

Ore Reserve Statement

Note: Resources and Reserves are shown on a 100% attributable basis. Mineral Resources are inclusive of Ore Reserves.

As part of the CPR, SRK provided an Independent Technical Economic Model based on a 100% equity basis. Highlights of the economic parameters included:

· Projected 21 year LoM producing a total of 432 million carats over the LoM;

· Projected real cash flow (no discount rate applied) over the LoM of approximately US$2.76 billion;

· Robust economics shows a post-tax NPV of US$996 million (based on 10% discount rate) and an Internal Rate of Return ("IRR") of 311.7%; and

· Capital expenditure of US$64 million over the first two years and a total of US$305 million over LoM, in real terms.

Sorting, rough sales and auctions

A sorting facility exists at the mine camp which includes a grading room, 20 gloved sort boxes, secured storage and a waste facility. A CCTV surveillance system is in operation throughout the sort house on a 24/7 basis. This sorting facility has been centralised and is positioned close to the wash plant. Concentrated gravel is transported directly in secured lockboxes from the jigs to the sort house where it is sorted and graded by hand.

Capital expenditure

During the year, a total of US$9.8 million (2014: US$6.0 million) was invested in new mining and ancillary equipment, as well as in improving Montepuez facilities and infrastructure. Of the US$9.8 million, US$7.7 million was invested in additional mining equipment to increase the production capacity of Montepuez, with the remaining US$2.1 million spent on replacing existing mining and ancillary equipment.

Infrastructure

Montepuez is served by a fully operational base camp at Namanhumbir and includes pre-fabricated accommodation, office facilities and recreation amenities for all of Montepuez resident employees. The average number of people employed at Montepuez including contractors was 499 (2014: 429).

The mine's camp site is due to undergo a significant upgrade in the 2015/16 financial year and a contract has been awarded for the construction of a large expansion to the residential camp. This includes new permanent housing units as well as improved roads, water purification capabilities, office and leisure facilities.

Security

Given the size and nature of the Montepuez ruby licence, unlicensed mining activity and asset loss remain key challenges. However, new infrastructure, a significant security presence and ongoing efforts have resulted in a measured improvement during the year.

An extensive and dynamic security plan has been formulated and is being implemented at site level. The plan will aim to separate the security department into an independently functioning unit. Internal security personnel, with experience from the Mozambican military, have been hired with the aim of increasing the level of diversity, skills and discipline available within the security function.

Safety and environment

Gemfields is formalising a group-level standard for health and safety reporting and procedures. Regular training sessions are held for all employees on various subjects, including health and safety in addition to 'toolbox talks' given at the start of each shift. The completion of a module of training with Montepuez results in certification for employees. On 1 May 2015, International Workers Day, Montepuez presented awards to the most safety conscious employees.

Social initiatives are currently underway within the local communities, including the completion of various improvements to the local maternity ward. In June 2015, Montepuez celebrated World Environment Day by inviting children from the local schools to participate in talks concerning the environment at Montepuez and replanting an area of reclaimed land within the Mugloto block. Environmental and social impact assessment studies have been carried out and were submitted to the Mozambique Ministry of Environment during the year.

There is a potential requirement to carry out a resettlement of some villagers from the Montepuez concession to gain access to economically viable parts of the mine. Presently, Montepuez is at the stage of identifying possible relocation sites with the local government having spent the last year carrying out local census and data collection. This process is expected to conclude by the end of the 2015 calendar year with the approval of the resettlement action plan if so required.

Acquisition of additional ruby licences in Mozambique

The acquisition of a controlling interest in two additional ruby deposits in Mozambique was completed during the financial year. Valid for an initial period of 25 years, the licences were formally issued by the Mozambican government on 22 September 2014 and 12 November 2014 respectively to a new company, Megaruma Mining Limitada ("Megaruma") in which Gemfields is a 75% shareholder. The two licences, which do not border one another, each share a boundary with the existing Montepuez ruby deposit and cover approximately 19,000 hectares and 15,000 hectares respectively. The Megaruma licences are expected to provide a platform, alongside the Montepuez ruby deposit, for the expansion and development of Gemfields' Mozambique ruby operations.

Kariba Minerals Limited, Zambia

Kariba Minerals Limited ("Kariba") remains one of the world's largest producing amethyst mines, accounting for around 40% of the world's amethyst production. Kariba's vision for the future is to more closely align itself with Gemfields' marketing initiatives to further promote amethyst's positioning, demand and significance across all key customer markets.

Operations at the mine developed steadily throughout the year with total rock handling standing at 276 thousand tonnes including 23 thousand tonnes of ore mined at an average grade of 47kg per tonne. In the previous financial year, the total rock handling was 110 thousand tonnes with ten thousand tonnes of ore mined at an average grade of 28kg per tonne.

The mine underwent some additional changes during the year including the installation of a new canteen. Work also commenced on the development of a new solar power system to support a more consistent and reliable electricity supply to both the mine site and the surrounding community. The majority of the mining activity continues to take place at the 'Top Curlew' pit, producing around 90% of the mine's ore. However, in March 2015 a new pit was opened, the 'Curlew Main', which recently commenced production.

Ratnapura Lanka Gemstones (Pvt) Limited, Sri Lanka

In September 2014, Gemfields entered into an agreement with East West Gem Investments Limited ("EWGI"), a Jersey registered company, to progress opportunities in Sri Lanka for sapphires.

As part of the agreement, a gemstone trading company called Ratnapura Lanka Gemstones (Pvt) Ltd ("Ratnapura Lanka Gemstones") was created, of which Gemfields own 75%. This company has been approved by the Board of Investments of Sri Lanka and was created to source rough sapphires from pre-vetted parties already operating within the local market. This will help promote a transparent and ethical gemstone platform in order to realise the full value of sapphires and to the benefit of local industry and all stakeholders. Ratnapura Lanka Gemstones has since applied and been granted a trading licence by the Board of Investment Sri Lanka which has allowed the company to procure several small shipments of Sri Lankan sapphires for analysis.

The venture has also acquired 75% operating interests in certain exploration licences covering diverse minerals and plans to commence a preliminary geological assessment covering these licences to examine their prospectivity.

Web Gemstone Mining plc, Ethiopia

In February 2015, Gemfields completed the acquisition of 75% shares in Web Gemstone Mining plc ("Web Gemstone"), an Ethiopian registered company. Web Gemstone holds an emerald exploration licence covering a total concession area of 200 square kilometres. A new exploration team was recruited on site to help explore and develop the potential within the area. A base camp has also been established on the concession and a team was stationed there in June 2015.

Exploration work has recently been commenced for the coming financial year with a preliminary ground survey, mapping and preparation of base plans. A manual pitting and trenching exercise has been initiated on a promising area in the north of the licence, selected on geological indicators and past artisanal activity. The results of these activities will help guide the future course of exploration in the area.

Oriental Mining SARL, Madagascar

Oriental Mining SARL ("Oriental") has not been subject to any large scale ground activity this financial year due to several political changes in Madagascar. Oriental will not look to progress any exploration programmes until the company has all of the relevant licences in place.

Fabergé Limited

The acquisition of 100% of Fabergé Limited by Gemfields in January 2013 aligned a leading coloured gemstone producer with one of the world's most recognisable luxury brands. The acquisition enabled Gemfields to accelerate its vision, harnessing the Fabergé brand, to raise the international presence and perception of coloured gemstones and advance the Group's 'mine and market' vision.

Following the acquisition, Gemfields is able to operate in the two most profitable channels of the coloured gemstone supply chain, the 'mine' and the 'market'. In addition, the combination provides for increased market share and the ability to provide a structured global marketing programme to further drive demand for coloured gemstones.

In addition to the directly-operated stores, Fabergé continued to expand its global presence during the year to 30 June 2015 via an increased number of agreements with retail partners. At 30 June 2015, Fabergé products were available in Australia, Czech Republic, Malta, Qatar, Saudi Arabia, Switzerland, Thailand, UAE, UK, Ukraine and USA. Since 30 June 2015 further agreements have been completed resulting in Fabergé products now being available in Azerbaijan, Bahrain and Canada.

During the financial year, Fabergé underwent further optimisation of the business, including management appointments, as part of the medium term strategy of becoming a standalone profitable business unit within the Gemfields group. Significant progress was made across all three product categories namely jewellery, timepieces and relaunching of the tradition of Imperial Class Objets. In addition, several nominations were bestowed on the new timepieces demonstrating the significant potential for the innovative designs and progress being made by Fabergé. Political turbulence in important markets such as Russia and Ukraine, and investment in branding and marketing campaigns which are yet to be released, impacted on Fabergé's overall sales growth. However, record orders were received at BaselWorld 2015 and these revenues will be recognised in the coming year when the deliveries are made. Fabergé also recorded improved revenues from sales of larger coloured gemstones through its Devotion collection.

Cost saving initiatives resulted in a 5% saving on administrative costs. Total operating costs during the financial year were US$18.1 million (2014: US$19.3 million). The net EBITDA loss was US$14.2 million (2014: US$14.3 million). Wholesale points of sale increased by 33% in the current financial year. The total number of Fabergé boutiques and distribution channels increased from 16 to 20 during the year.

Marketing

Fabergé continued its association with Harrods during March 2015 in the lead up to Easter. In keeping with the tradition of innovation and surprise, Fabergé developed two digital applications for client interaction and engagement. These included the Fabergé Egg Burst, which allowed clients to design their own Fabergé egg that was then displayed in the Harrods front window using 3D mapping. In addition, the in-store 'Fabergé Egg Hunt' engaged visitors in hunting for six large collectors' eggs hidden throughout Harrods using their smartphone and a specially designed app.

Fabergé also exhibited at the prestigious art, antique and design fair 'Masterpiece London' for the first time this year at the end of June 2015. As one of only two Salon Partners, Fabergé demonstrated its legendary creations, from gemstones to masterpieces, tracing the journey of the creation process from rough stones to finished jewellery and timepieces, drawing inspiration from its illustrious past.

Launch and sale of the first Imperial Class Objet d'Art

To mark the upcoming 100th anniversary of the last imperial egg commissioned in 1916, Fabergé relaunched the tradition of the Imperial Class Objets in the year. The first such objet, the Fabergé Pearl Egg, was introduced at the Doha International Jewellery Show in February 2015. It was purchased in Doha by Hussain Al Fardan, the renowned Qatari businessman, one of the largest natural pearl collectors in the world.

The second Imperial Class Objet set is close to completion and comprises a series of four eggs that reflect the four seasons. Each egg is designed to carry a surprise inside. The summer egg was presented exclusively at the Fabergé Salon at Masterpiece London in June 2015.

Timepiece collection

During the financial year, Fabergé launched the timepiece collection including the Fabergé Lady Compliqée Peacock and Winter timepieces and the mens' Visionnaire I. The ladies' watches offer a movement that has been created exclusively for Fabergé and comprise a four-cog mechanism that enables a peacock's tail, or a snowflake, to fan out with the passage of time.

The Mens' Fabergé Visionnaire I offers a flying tourbillon. The dial is made up of seven separate segments that cover the movement only partially. The timepieces will be available to buy at Fabergé boutiques and partners' points of sale from November 2015.

The new timepiece collection was nominated as part of the top picks of several specialist watch publications including WatchPro and Revolution, as well as in the online editions of Vanity Fair and Harpers Bazaar.

Other new jewellery collections

BaselWorld 2015 saw the release of the high jewellery collection 'Summer in Provence' and the new Rococo and Heritage core collections. The high jewellery collection 'Secret Garden' was presented at the International Jewellery Show in Doha in February 2015.

Year ahead

The Fabergé Lady Peacock high complication watch, and the 'Summer in Provence' high jewellery ladies watch qualified as entrants for the prestigious Grand Prix d'Horlogerie de Genève, one of the most revered watch competitions in the world. Results will be announced in Geneva at the end of October 2015.

Fabergé's new advertising campaigns will launch in November 2015 and combined with the expanded points of presence around the globe, set the stage for further improvements in overall sales and financial performance.

Fabergé is particularly pleased with the reception received for its timepiece and Objets collections, and looks forward to monitoring sales for these products as they become available for purchase.

Post Reporting Period Events

September 2015 rough emerald and amethyst auction

From 31 August to 4 September 2015, after the end of the financial year, an auction of higher quality rough emerald was held in Singapore and yielded aggregate revenues of US$34.7 million, the third highest aggregate revenue achieved for higher quality emerald of this nature. In addition, Gemfields auctioned higher quality rough amethysts from Kariba yielding revenues of US$0.44 million.

Acquisitions

Colombia

In September 2015, Gemfields announced binding but conditional agreements to acquire controlling interests in two emerald projects with operations and prospects located predominantly in the Boyacá state in Colombia.

The first project relates to the Coscuez Emerald Mine in the Boyacá department, Colombia and is the acquisition of a 70% interest in a Colombian company which will, on completion, hold mining contract no. 122-95M (the "Coscuez Licence", which is presently held by Esmeracol S.A.). Located on the "Muzo formation", the Coscuez Licence covers an area of 47 hectares, with the Coscuez mine - one of history's more significant emerald deposits - having been in operation for over 25 years and known to have produced some of the finest emeralds from Colombia. Geological due diligence studies were carried out by Gemfields between October 2013 and August 2014.

The second project relates to selected exploration prospects held by ISAM Europa S.L. via the acquisition of 75% and 70% interests in two Colombian companies holding rights in respect of mining licence applications and assigned concession contracts respectively.

Outlook

The Company believes demand for coloured gemstones will remain firm throughout the coming year and is targeting at least three emerald and beryl auctions alongside three ruby and corundum auctions for FY2016. Gemfields' strategy to continue to drive demand and achievable rough gemstones prices focuses on increasing global demand, rather than diminishing supply.

Gemfields maintains its target of a 30-40% EBITDA margin and will continue its focus on key marketing initiatives in existing target areas such as the US, Europe and India but it will also look to accelerate activities in China and the Middle East. The Company is also planning to initiate its 'Gemfields Inside' marketing strategy in conjunction with leading downstream stakeholders.

At Kagem, Gemfields' established operating emerald mine in Zambia, the Company maintains its production target of 25-30 million carats of emerald and beryl for FY2016. The Company will also continue its extensive exploration and bulk sampling programme, to develop new potential production areas within the Kagem licence, as part of its 'resource replenishment' strategy and will consider implementing the Kagem LoM plan, announced in September 2015, which proposes an open pit mine plan until 2040. The Company is also potentially considering increasing processing volumes to 180,000 tonnes per annum, comprising 150,000 tonnes per annum from the Chama pit and 30,000 tonnes per annum from the Fibolele pit which would increase emerald and beryl production to as much as 40 million carats per annum by FY2018.

At Montepuez, the Company's ruby operation in Mozambique, the Company maintains its production target of eight million carats of ruby and corundum for FY2016. Gemfields is also focussed on a substantial exploration programme at Montepuez, the work completed to date it has only covered approximately 10% of the licence area. Gemfields is also potentially considering the installation of a second wash plant in addition to a further upgrade of the existing wash plant, which would support an increased in production volumes up to 20 million carats per annum by FY2018.

Fabergé will continue to unveil new product lines to the market throughout FY2016. Gemfields is also looking forward to the results of the prestigious Grand Prix d'Horlogerie de Genève, in October 2015 as 'The Fabergé Lady Peacock' high complication watch, and the 'Summer in Provence' high jewellery ladies watch have qualified as entrants. Fabergé is anticipating that its new advertising campaigns, due to be launched in November 2015, combined with its latest watch and jewellery product lines, will in turn support further improvements in its overall sales and financial performance.

Gemfields maintains its commitment in FY2016 to further expanding its geological, technical and mining expertise across a broader footprint of coloured gemstone projects. It is also committed to pursuing increased operational excellence through investing not only in its current list of operating assets, but so too in its employees and various additional exploration projects. As a result, following the acquisition of the exploration licences in Sri Lanka, Colombia, Mozambique and Ethiopia, the Group is forecasting a moderate yet measured increase in exploration costs in the 2016 financial year.

The Group maintains a considerable volume of stock in its rough gemstone inventories to mitigate the grade variance inherent within gemstone mining and to enhance its ability support customer confidence and ensure that their demands are able to be met.

Gemfields' corporate strategy remains focused on investing in its existing operations as well as targeted expansion opportunities and new projects in order to maintain its position as a global leader in coloured gemstones.

Consolidated income statement for the year ended 30 June 2015

Consolidated statement of comprehensive income for the year ended 30 June 2015

Consolidated statement of financial position at 30 June 2015

The Financial Statements were approved by the Board of Directors and authorised for issue on 6 October 2015.

Devidas Shetty / Chief Operating Officer

Company number 05129023

Consolidated statement of changes in equity for the year ended 30 June 2015

The nature and purpose of each reserve within Consolidated Statement of Changes in Equity is described as follows:

Consolidated statement of cash flows for the year ended 30 June 2015

Notes Forming part of the Consolidated Financial Statements for the year ended 30 June 2015

1 Basis of preparation

Gemfields plc (the 'Company') was incorporated and registered under the laws of England and Wales on 1 January 2004. The Company's shares are admitted to trading on the London Stock Exchange AIM market. The Company's registered office and domicile is 54 Jermyn Street, London, SW1Y 6LX, United Kingdom. The Consolidated Financial Statements as at and for the year ended 30 June 2015 comprised the Company and its subsidiaries (the 'Group') and the Group's interest in joint ventures.

The Group's financial statements have been prepared and approved by the Directors in accordance with International Financial Reporting Standards ("IFRS") and International Financial Reporting Interpretations Committee ("IFRIC") interpretations, issued by the International Accounting Standards Board ("IASB") as endorsed for use in the EU and those parts of the Companies Act 2006 that are applicable to companies that prepare their financial statements under IFRS.

The financial information for the years ended 30 June 2015 and 30 June 2014 does not constitute statutory accounts as defined by section 435 of the Companies Act 2006 but is extracted from the audited accounts for those years. The 30 June 2014 accounts have been delivered to the Registrar of Companies. The 30 June 2015 accounts will be delivered to Companies House within the statutory filing deadline. The auditors have reported on those accounts. Their report was unqualified and did not contain statements under Section 498 (2) of (3) of the Companies Act 2006.

2 Segmental analysis

For management purposes, the Group is organised into geographic units and business units based on the products and services and has five reportable segments as follows:

· Zambia (emerald and beryl mining activities);

· Mozambique (ruby and corundum mining activities);

· UK (sales of cut and polished gemstones, marketing, technical and administrative services);

· Fabergé (wholesale and retail sales of jewellery); and

· Other (new projects, traded auctions, sales and marketing offices).

The reporting on these investments to management focuses on revenue, operating costs and capital expenditure. These figures are presented after intercompany adjustments have been accounted for.

3 Cost of sales

4 Selling, general and administrative expenses

5 Earnings per share

Earnings per ordinary share has been calculated using the weighted average number of shares in issue during the year.

Diluted earnings per share amounts are calculated by dividing the profit for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year, plus the weighted average number of shares that would be issued on the conversion of dilutive potential ordinary shares into ordinary shares. The calculation of the dilutive potential ordinary shares related to employee and director share option plans includes only those options with exercise prices below the average share trading price for each period.

The calculation of the diluted earnings per share assumes all criteria giving rise to the dilution of the earnings per share are achieved and all outstanding share options are exercised.

6 Property, plant and equipment

(a) In June 2014, the Gemfields plc Board of Directors concluded that the Montepuez ruby project no longer met the definition of an exploration and evaluation asset as defined under IFRS 6 and hence the relevant costs were reclassified from intangible unevaluated mining property to inventory and evaluated mining property.

7 Inventory

**ENDS**