Lusaka Emerald Auction Results

Gemfields plc

("Gemfields" or "the Company")

Lusaka Emerald Auction Results

20 February 2017

Gemfields plc (AIM: GEM) is pleased to announce the results of its auction of predominantly higher quality rough emerald extracted by Kagem Mining Ltd (which is 75% owned by Gemfields and 25% by the Government of the Republic of Zambia) in Zambia.

The auction was held in Lusaka, Zambia from 13 - 17 February 2017 and the proceeds of this auction will be fully repatriated to Kagem Mining Ltd in Zambia, with all royalties due to the Government of the Republic of Zambia being paid on the full sales prices achieved at the auction.

Highlights - Emerald Auction

· Auction revenues of USD 22.3 million;

· Average per carat sales value of USD 63.61 - third highest to date;

· 349,935 carats were sold (84% by weight and 95% by value) out of the 417,060 carats offered; and

· 24 Kagem auctions held since July 2009 have generated USD 459 million in total revenues.

As a consequence of the new demonetisation programme implemented in India, the Company's emerald customers have experienced short term financial liquidity constraints. As a result, Gemfields decided to delay its auction scheduled for December 2016 until February 2017 and reduce the overall value and volume of carats offered for sale at the auction. The auction saw 417,060 carats of higher quality emerald extracted from Kagem placed on offer, with 349,935 carats being sold.

A total of 33 companies placed bids at the auction. 17 of the 19 lots offered were sold, generating auction revenues of USD 22.3 million. The auction realised a robust overall average value of USD 63.61 per carat.

The Company's 24 auctions of emeralds and beryl mined at Kagem since July 2009 have generated USD 459 million in total revenues.

The results of the six most recent higher quality Kagem auctions are summarised in the table below. Additional historic information regarding auctions of similar quality goods can be found in the 'Further Information' section of this announcement:

The specific auction mix and the exact quality of the lots offered at each auction vary in characteristics such as volume, size, colour and clarity on account of variations in mined production and market demand. Each auction naturally contains a degree of variation in overall quality composition, which is typically reflected in the average per carat sales value and means that the results of each auction are not always directly comparable.

Next Auction

Gemfields' next emerald auction is expected to take place before the end of June 2017, comprising predominantly of commercial quality emeralds from the Kagem emerald mine in Zambia.

Ian Harebottle, CEO of Gemfields, commented:

"With 95% of the value of the emeralds offered being sold, and with positive responses received from all of the customers who managed to win some of the schedules placed on offer, we've achieve yet another excellent result in Lusaka. We were pleased with the average price obtained, which is the third highest average price achieved at an auction to date and a clear sign that the demand for coloured gemstone remains healthy. Notwithstanding the short term impact of the demonetisation policy in India, the long term outlook for the sector continues to be very encouraging. We thank our partners in the Zambian Government for their vision and support in building and internationalising the Zambian gemstone sector by promoting transparent and globally-competitive practices."

ENQUIRIES:

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% 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% interest in the Kariba amethyst mine in Zambia, as well as controlling interests in various other gemstone mining and prospecting licences 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

Further Information:

The results of earlier higher quality Kagem auctions are summarised below: