Proposed Rights Issue Circular and EGM Notice

LONDON, 11 APRIL 2025

Gemfields Group Limited ("Gemfields" or the "Group" or the "Company") announces it is seeking shareholder approval to, amongst other things, issue 556,203,396 New Shares to raise approximately USD30 million by way of a fully committed and underwritten Rights Issue (the "Proposed Rights Issue").

The Company is convening an extraordinary general meeting of its shareholders to approve the Proposed Rights Issue of 556,203,396 New Shares, representing approximately 47.6 per cent. of Gemfields' share capital in issue as at the Latest Practicable Date, and a Rule 9 Waiver to waive the requirement for Assore International Holdings Limited ("AIH") to make a general offer under Rule 9 of the Takeover Code in cash for Ordinary Shares in the Company which might otherwise arise as a result of the Proposed Rights Issue.

The Circular setting out details of the Proposed Rights Issue and the Rule 9 Waiver and containing the Notice of Extraordinary General Meeting will be posted to shareholders today and will shortly be available on the Company's website at: www.gemfieldsgroup.com/proposed-rights-issue-2025/.

An extract of information set out in the Circular is set out in the Appendix to this announcement. All defined terms in this announcement are as set out in the Circular.

Further details in relation to the Proposed Rights Issue (including, without limitation, the timetable of events) will be set out in a Prospectus which is expected to be published by the Company, subject to the passing of the Resolutions and the approval of the FCA and the JSE, on or around 20 May 2025.

In the UK, Panmure Liberum will be acting as Financial Adviser, Co-ordinator and Corporate Broker in relation to the Proposed Rights Issue and is the Company's Nominated Adviser for the purposes of the AIM Rules for Companies. In South Africa, Investec is acting as JSE Sponsor in relation to the Proposed Rights Issue.

Full year results and Proposed Rights Issue shareholder and analyst webcast

The Company intends to host a shareholder and analyst webcast on Wednesday, 23 April 2025 at 9:00 am (UK) / 10:00 am (South Africa) to grant shareholders time to review the released Circular and notice to attend the webcast. Sean Gilbertson (CEO) and David Lovett (CFO) will present the Company's 2024 full year results and the Proposed Rights Issue.

The Company will host a question and answer session following the presentation. Should you wish to ask a question, please either email your questions in advance to [email protected], or use the 'Ask a question' link on the webcast page during the event.

Shareholders who wish to watch the webcast are requested to register via the link below: https://sparklive.lseg.com/GemfieldsGroupLtd/events/d6b68c49-14cb-4ae4-82df-195034866c67/gemfields-group-limited-full-year-results-2024.

The slides that will be presented on the webcast, will be available on Gemfields' website under Investors: Presentations shortly at www.gemfieldsgroup.com.

Background to the Proposed Rights Issue

The Proposed Rights Issue will, subject to Shareholder approval, be undertaken to address a near-term working capital shortfall as a result of the cumulative impact of a number of challenges the Company encountered in the second half of 2024 and the first quarter of 2025, all of which are considered by the Directors to be transient in nature, coinciding with a period of significant planned investment.

As set out in an announcement dated 23 December 2024, the Company is carrying out a widespread and ongoing cost saving programme to reduce the cost base of the business. In combination with the Proposed Rights Issue, these initiatives are intended to secure the near-term future of Gemfields, ahead of the commissioning of a second ruby processing plant at MRM ("PP2"). Once fully operational, PP2 is expected to triple the processing capacity and significantly increase the mine's ruby production, leading to a material increase in product available for sale and, therefore, the opportunity to generate additional revenue.

The Company also announced on 23 December 2024 that it was assessing strategic options in respect of Fabergé, the iconic luxury-brand owned by the Group. Since the date of that announcement, the Company has engaged with a number of parties who have expressed an interest in the Fabergé business, and received a number of non-binding offers. Due to the Company's requirement for external funding in the short-term, the Board does not believe that the non-binding offers are sufficiently sound alternatives within the timeframe required to meet the Group's funding needs. To proceed with external funding in the required timeframe, the assessment of strategic options for Fabergé has paused and will only recommence following the completion of the Proposed Rights Issue.

As a result, the Board is of the view that the Proposed Rights Issue is in the best interests of the Company and its shareholders as a whole at this time in order to meet the funding needs of the Group.

Description of the Proposed Rights Issue

Subject to the fulfilment of, amongst others, the conditions described below, it is expected that New Shares will be offered for subscription to Qualifying Shareholders (other than Qualifying South African Shareholders) at 4.22 pence per New Share, or, in the case of Qualifying South African Shareholders, ZAR1.06860 per New Share, payable in full on acceptance. The Proposed Rights Issue will be on the basis of:

10 New Shares for every 21 Existing Shares

held by and registered in the names of Qualifying Shareholders (other than Shareholders resident or with registered addresses in any of the Excluded Territories) on the relevant Record Date and so in proportion to any other number of Existing Shares each Qualifying Shareholder then holds and otherwise on the terms and conditions to be set out in the Prospectus and, in the case of Qualifying Non-CREST Shareholders or Qualifying South African Shareholders holding Existing Shares in certificated form (other than such Shareholders resident or with registered addresses in any of the Excluded Territories), the Provisional Allotment Letters or Forms of Instruction respectively.

The UK Issue Price of 4.22 pence per New Share represents:

· a 19.7 per cent. discount to the theoretical ex-Rights price based on the closing price of 5.75 pence per Share; and

· a 35.0 per cent. discount to the 30-day volume weighted average price per share of 6.50 pence per Share,

in each case on the Latest Practicable Date.

The SA Issue Price of ZAR1.06860 per New Share represents:

· a 21.5 per cent. discount to the theoretical ex-Rights price based on the closing price of ZAR1.50000 per Share; and

· a 28.8 per cent. discount to the 30-day volume weighted average price per share of ZAR1.50049 per Share,

in each case on the Latest Practicable Date.

The New Shares will, when issued and fully paid, rank pari passu in all respects with the Existing Shares, including the right to receive all future dividends and other distributions declared, made or paid after the date of their issue.

The Proposed Rights Issue will result in the issue of 556,203,396 New Shares, which will form approximately 32.3 per cent. of the Shares in issue immediately following completion of the Proposed Rights Issue.

Subject to the Resolutions being approved and the Proposed Rights Issue taking place, the Rights Issue and Underwriting Agreement provides that the Underwriters will receive a commission of 2 per cent. of the gross proceeds raised from the issue of the Underwritten Shares, in the Agreed Proportions, to each respective Underwriter.

Underwriting, Pre-Funding Agreements and Relationship Agreement

In order to provide certainty of funding to the Company, subject to the passing of the Resolutions at the Extraordinary General Meeting, the Proposed Rights Issue will be underwritten by the Underwriters (AIH and Rational Expectations (Pty) Ltd ("Rational")) in accordance with the terms of the Rights Issue and Underwriting Agreement. Accordingly, AIH, which currently holds approximately 29.14 per cent of the issued share capital of Gemfields, and Rational, which, together with the parties it represents as set out in more detail in the paragraph 16 of Part II of the Circular, currently holds approximately 15.49 per cent of the issued share capital of Gemfields, in each case at the Latest Practicable Date, have undertaken to take up their respective entitlements in full in the Proposed Rights Issue and to collectively underwrite, in the Agreed Proportions, the entirety of the Proposed Rights Issue in excess of their respective entitlements. The Proposed Rights Issue is being underwritten by the Underwriters such that the Proposed Rights Issue shall result in gross proceeds of approximately USD30 million being raised.

In addition, each Underwriter has entered into an individual Pre-Funding Agreement with the Company, pursuant to which: (1) AIH shall make a loan in the amount of USD8,742,000 available to the Company; and (2) Rational shall make a loan in the amount of USD4,646,000 available to the Company (each being a "Loan") in each case, on the date of the publication of the Circular. This will provide the Company with an immediate working capital injection pending the completion of the Proposed Rights Issue. Each Loan will act as an advance payment by the relevant Underwriter for its Rights under the Proposed Rights Issue and repayment of the Loan shall be set-off against the amount otherwise owed by the relevant Underwriter to the Company for its Rights and the Underwritten Shares it has committed to subscribe for under the terms of the Proposed Rights Issue and the Rights Issue and Underwriting Agreement. Further details of each Pre-Funding Agreement are set out in paragraphs 11.9 and 11.10 of Part II of the Circular.

Furthermore, the Company has also entered into a relationship Agreement with Rational, pursuant to which, inter alia, Rational shall have the right to nominate a non-executive director to the board of the Company, subject to shareholder approval, for so long as it, and the parties it represents, hold at least 12.5 per cent. of the issued share capital of the Company.

Irrevocable Undertakings

The Committed Shareholders, including the Underwriters, have given irrevocable undertakings to take up the Committed Shares (being, in aggregate, 229,572,845 New Shares), which represent their collective entitlements to the Rights under the Proposed Rights Issue. Further details of the irrevocable undertakings are set out at paragraph 9 of Part II of the Circular.

Rule 9 Waiver

In the event that no Qualifying Shareholders (save for the Underwriters and the Committed Shareholders) take up their Rights, AIH would be required to subscribe for, in aggregate, 329,659,331 New Shares, representing approximately 19.1 per cent. of the voting rights of the Company's issued share capital immediately following the Proposed Rights Issue. This would mean that AIH, (when taking into account the existing 340,367,121 Ordinary Shares it holds as at the Latest Practicable Date), together with any persons acting in concert with AIH, would have a maximum shareholding of 670,026,452 Ordinary Shares, representing 38.9 per cent. of the issued share capital of the Company following completion of the Proposed Rights Issue. The maximum shareholding of Rational, together with the parties it represents as set out in more detail in paragraph 16 of Part II of the Circular, in such circumstances would be 356,088,477 Ordinary Shares, representing 20.7 per cent. of the issued share capital of the Company following completion of the Proposed Rights Issue.

Given the maximum number of Ordinary Shares that could be held by AIH, and any persons acting in concert with AIH, following the Proposed Rights Issue, the Takeover Panel has been consulted and has agreed to waive the requirement for AIH and any persons acting in concert with AIH to make a general offer under Rule 9 of the Takeover Code in cash for Ordinary Shares which might otherwise arise as a result of the issue of the Proposed Rights Issue, subject to the Rule 9 Waiver Resolution (as set out in the notice convening the Extraordinary General Meeting) being passed on a poll of the Independent Shareholders. To be passed, the Rule 9 Waiver Resolution will require a simple majority of the votes cast by the Independent Shareholders to be in favour. For the purposes of the Takeover Code, Rational is not considered to be acting in concert with AIH in connection with the Proposed Rights Issue but is not considered independent of AIH and is therefore not an Independent Shareholder.

Use of proceeds

Subject to the passing of the Resolutions and the completion of the Proposed Rights Issue, the Company is expected to raise approximately USD30 million (in gross proceeds). The proceeds of the Proposed Rights Issue will be used for general corporate purposes, and specifically to provide working capital liquidity and ensure the business is able to continue operating and fulfil its ongoing obligations such as paying employee salaries and key operating costs, in between auctions.

Related Party Transactions

The entry into the Rights Issue and Underwriting Agreement with the Underwriters and the entry into each of the AIH Pre-Funding Agreement and the Rational Pre-Funding Agreement with the Underwriters are each "related party transactions" for the purposes of Rule 13 of the AIM Rules. The Independent Directors consider, having consulted with Panmure Liberum, the Company's nominated adviser for the purposes of the AIM Rules, that the terms of the related party transactions are fair and reasonable insofar as the Shareholders of the Company are concerned.

For purposes of the JSE Listings Requirements, the Rights Issue and Underwriting Agreement is not regarded as a related party transaction as the commission payable to the related parties (being the Underwriters) is not greater than the current market-related rates as confirmed by the independent Non-Executive Directors of the Company, and as such falls within the exemptions contemplated under paragraph 10.6(c)(vii) of the JSE Listings Requirements pertaining to transactions that do not constitute related party transactions.

The Pre-Funding Agreements, for purposes of the JSE Listings Requirements, are not regarded as related party transactions as each is an agreement involving the lending of money by a related party (being each Underwriter) to the Company on normal commercial terms and on an unsecured basis and as such falls within the exemption contemplated in paragraph 10.6(c)(i) of the JSE Listings Requirements pertaining to transactions that do not constitute related party transactions.

Extraordinary General Meeting

An Extraordinary General Meeting of Gemfields will be held at 123 Victoria Street, Westminster, London, SW1E 6DE, United Kingdom on 19 May 2025 at 10.00 a.m. (London time) to consider and, if thought fit, to approve the Resolutions. The Resolutions are set out in full in the Notice of Extraordinary General Meeting.

Actions to be taken

The Extraordinary General Meeting is being convened for the purposes of considering and, if thought fit, passing the following Resolutions:

1. an Ordinary Resolution to be passed by the Independent Shareholders on a poll to approve the Rule 9 Waiver Resolution;

2. a Special Resolution to grant the Directors authority to allot and issue New Shares for cash free of pre-emption rights in connection with the Proposed Rights Issue; and

3. an Ordinary Resolution to approve the Underwriting Issue to the Underwriters Resolution.

Please refer to the Notice of Extraordinary General Meeting for a detailed description of the Resolutions to be voted on by Shareholders at the Extraordinary General Meeting. 

The Proposed Rights Issue is conditional on:

(a) all of the Resolutions being passed by the requisite majority of Shareholders;

(b) publication of the Prospectus on or around 20 May 2025;

(c) AIM Admission of the New Shares;

(d) approval by the JSE Ltd of the listing and trading of the New Shares and the Letters of Allocation on the JSE Main Board ("JSE Admission"); and

(e) the Rights Issue and Underwriting Agreement in respect of the Proposed Rights Issue becoming unconditional in accordance with its terms and not having been terminated prior to AIM Admission and JSE Admission.

Therefore, if all of the Resolutions are not passed by the requisite majority of Shareholders, or if any of the other conditions are not satisfied, the Proposed Rights Issue will not proceed.

AIH has agreed to vote its 29.14 per cent. shareholding in Gemfields in favour of all of the Resolutions save for the Rule 9 Waiver Resolution which it is precluded from voting on. Rational has agreed to vote its shareholding, together with the shareholdings of the parties it represents as set out in more detail in paragraph 16 of Part II of the Circular, being in aggregate 15.49 per cent. of the issued share capital of Gemfields, in favour of all the Resolutions save for the Rule 9 Waiver Resolution which it is precluded from voting on.

Gemfields has facilitated means by which all those holding Existing Shares on the Registers will be able to vote and/or appoint a proxy by electronic means, further details of which are set out in the explanatory notes in the Notice of Extraordinary General Meeting and in the accompanying Form of Proxy. 

Shareholders are asked to complete and return their Form of Proxy, or submit their proxy electronically, as soon as possible, and in any event no later than 10.00 a.m. (London time) on 15 May 2025.

Expected timetable of events

Subject to the passing of the Resolutions at the Extraordinary General Meeting, the Prospectus is expected to be made available on the Company's website on 20 May 2025.

Each of the times and dates in the table below is indicative only and may be subject to change.

Notes:

1. The Proposed Rights Issue is subject to certain restrictions relating to Shareholders with registered addresses in the Excluded Territories, details of which will be set out in the Prospectus.

2. The results of the Proposed Rights Issue will be announced by way of a simultaneous RIS and SENS announcement on 13 June 2025.

3. The times and dates set out in the expected timetable of principal events above may be adjusted by Gemfields in consultation with Panmure Liberum, in which event details of the new times and dates will be notified to the Johannesburg Stock Exchange and the London Stock Exchange and, where appropriate, Qualifying Shareholders by way of a simultaneous RIS and SENS announcement.

4. Unless stated otherwise, references to times in this timetable are to London time or South Africa Standard Time, as applicable.

5. The Proposed Rights Issue will open two days post the record date to allow for the distribution of the Prospectus.

6. No excess applications are allowed. Qualifying Shareholders will not have the right to apply for any excess New Shares not taken up by other Qualifying Shareholders. Any New Shares not taken up by Qualifying Shareholders pursuant to the Proposed Rights Issue, shall be subscribed for by the Underwriters pursuant to the terms and subject to the conditions of the Rights Issue and Underwriting Agreement.

7. The allocation of Rights Issue Shares will be such that Qualifying Shareholders will not be allocated a fraction of a Rights Issue Share and only whole numbers of Rights Issue Shares will be issued. Rights Issue Shares of 0.5 or greater will be rounded up and fractional entitlements of Rights Issue Shares of less than 0.5 will be rounded down

8. Qualifying South African Shareholders who hold their Shares in uncertificated form are required to inform their CSDP or broker of their instructions in terms of the Proposed Rights Issue in the manner and time stipulated in the agreement governing the relationship between the shareholder and their CSDP or broker.

9. Qualifying South African Shareholders who hold their Existing Shares in uncertificated form will have their accounts at their CSDP or broker automatically credited with their Letters of Allocation and Qualifying South African Shareholders who hold their Existing Shares in certificated form will have their Letters of Allocation credited to an account with the SA Registrar and will be sent a Form of Instruction.

10. South African Shareholders may not rematerialise or dematerialise their Existing Shares from 9 June 2025 until 12 June 2025 both days inclusive.

IMPORTANT NOTICES

Panmure Liberum Limited ("Panmure Liberum"), which is authorised and regulated in the United Kingdom by the FCA, is acting as Financial Adviser, AIM Nominated Adviser, co-ordinator and Corporate Broker exclusively to the Company in connection with the Proposed Rights Issue and no one else in connection with the matters referred to in this announcement, and will not be responsible to anyone other than the Company for providing the protections afforded to its clients, for the contents of this announcement or for providing any advice in relation to this matters set out in this announcement. Neither Panmure Liberum nor any of its affiliates (nor any of their respective directors, officers, employees or agents), owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Panmure Liberum in connection with this announcement, any statement contained herein or otherwise.

Apart from the responsibilities and liabilities, if any, which may be imposed by the FCA, FSMA or the regulatory regime established thereunder, neither Panmure Liberum nor any person affiliated with it, accepts any responsibility whatsoever and makes no representation or warranty, express or implied, in respect of the contents of this announcement, including its accuracy or completeness, or for any other statement made or purported to be made by any of them, or on behalf of them, in connection with the Company or any matter described in this announcement and nothing in this announcement is or shall be relied upon as a promise or representation in this respect, whether as to the past or future. Panmure Liberum has not approved the contents of, or any part of, this announcement and no liability whatsoever is accepted by Panmure Liberum for the accuracy of any information or opinions contained in this announcement and, accordingly, Panmure Liberum and its affiliates disclaim, to the fullest extent permitted by law, all and any liability whatsoever, whether arising in tort, contract or otherwise (save as referred to above) which it might otherwise have to any person, other than the Company, in respect of this announcement or any such statement.

Forward Looking Statements

This announcement includes "forward-looking statements" which include all statements other than statements of historical facts, including, without limitation, those regarding the Group's financial position, business strategy, plans and objectives of management for future operations, or any statements preceded by, followed by or that include the words "targets", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "would", "could" or "similar" expressions or negatives thereof which are predictions of or indicate future events and future trends. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company's control that could cause the actual results, performance or achievements of the Group to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Group's present and future business strategies and the environment in which the Group will operate in the future. These forward-looking statements speak only as at the date of this announcement. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based unless required to do so by applicable law or the AIM Rules for Companies.

All subsequent oral or written forward-looking statements attributed to the Company or any persons acting on its behalf are expressly qualified in their entirety by the statements in the paragraph immediately above. All forward-looking statements contained in this announcement are based on information available to the Directors at the date of this announcement, unless some other time is specified in relation to them, and receipt of this announcement shall not give rise to any implication that there has been no change in the facts set forth herein since such date. Shareholders are hereby cautioned that certain important factors could cause actual results, outcomes, performance or achievements of the Company or the industry in which it operates to differ materially from those anticipated in the forward-looking statements. These factors include, but are not limited to, those summarised in Part I "Letter from the Chair of Gemfields" in the Circular, which is set out below. Except as required by the FCA, the London Stock Exchange, the JSE Ltd, the AIM Rules, the Prospectus Regulation Rules, the Disclosure and Transparency Rules and the JSE Listings Requirements (to the extent applicable) or other applicable laws or regulations, the Company and the Directors undertake no obligation to release publicly any updates or revision to any forward-looking statement contained herein to reflect any change in the Company's or the Directors' expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

Foreign shareholders

Foreign Shareholders, who have registered addresses outside the United Kingdom or South Africa, or who are resident, or located, in, or citizens of, countries other than the United Kingdom or South Africa, may be affected by the laws of the relevant jurisdiction. In addition to carefully considering the disclaimers and restrictions set out in the Prospectus, such foreign Shareholders should inform themselves with regard to and observe any applicable legal requirements of such jurisdiction in relation to all aspects of this announcement that may affect them, including the Proposed Rights Issue. It is the responsibility of each foreign Shareholder to satisfy himself as to the full observation of the laws and regulatory requirements of the relevant foreign jurisdiction in connection with the Proposed Rights Issue, including obtaining any governmental, exchange or other consents or the making of any filing which may be required, the compliance with any other necessary formalities and the payment of any issue, transfer or other taxes or other requisite payments due in such jurisdictions.. Nothing in this declaration announcement, the Circular or the Prospectus referred to herein constitutes an offer of securities for sale in any jurisdiction where it is unlawful to do so and should not be forwarded or transmitted by recipients thereof to any person in any territory other than where it is lawful to make such an offer

Shareholders in Excluded Territories

Shareholders who are resident or located in any one of the Excluded Territories will not be entitled to participate in the Proposed Rights Issue and the Prospectus will not be posted to them.

-ENDS-

Further information on Gemfields Group Limited can be found at:

 GEMFIELDSGROUP.COM

To join our investor mailing list, please contact us on: [email protected]

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) no. 596/2014 which forms part of domestic UK law pursuant to the European Union (withdrawal) act 2018 ("MAR"). The person responsible for arranging the release of this announcement on behalf of the Company is David Lovett, CFO.

ENQUIRIES

APPENDIX - LETTER FROM THE CHAIR OF GEMFIELDS

To holders of Existing Shares and for information purposes to the holders of options over Ordinary Shares

Dear Shareholder,

Authority to Allot and Issue 556,203,396 New Shares for cash in connection with the Proposed Rights Issue

Approval of Waiver of Rule 9 of the City Code on Takeovers and Mergers and

Notice of Extraordinary General Meeting

1. Introduction

Today, Gemfields Group Limited ("Gemfields" or the "Company") has announced it is seeking shareholder approval to, amongst other things, issue 556,203,396 New Shares to raise approximately USD30 million by way of a Proposed Rights Issue.

The Proposed Rights Issue will, subject to Shareholder approval, be undertaken to address a near-term working capital shortfall as a result of the cumulative impact of a number of challenges the Company encountered in the second half of 2024 and the first quarter of 2025, all of which are considered by the Directors to be transient in nature, coinciding with a period of significant planned investment.

As set out in an announcement dated 23 December 2024, the Company is carrying out a widespread and ongoing cost saving programme to reduce the cost base of the business. In combination with the Proposed Rights Issue, these initiatives are intended to secure the near-term future of Gemfields, ahead of the commissioning of a second ruby processing plant at MRM ("PP2"). Once fully operational, PP2 is expected to triple the processing capacity and significantly increase the mine's ruby production, leading to a material increase in product available for sale and, therefore, the opportunity to generate additional revenue.

The Company also announced on 23 December 2024 that it was assessing strategic options in respect of Fabergé, the iconic luxury-brand owned by the Group. Since the date of that announcement, the Company has engaged with a number of parties who have expressed an interest in the Fabergé business, and received a number of non-binding offers. Due to the Company's requirement for external funding in the short-term, the Board does not believe that the non-binding offers are sufficiently sound alternatives within the timeframe required to meet the Group's funding needs. To proceed with external funding in the required timeframe, the assessment of strategic options for Fabergé has paused and will only recommence following the completion of the Proposed Rights Issue.

As a result, the Board is of the view that the Proposed Rights Issue is in the best interests of the Company and its shareholders as a whole at this time in order to meet the funding needs of the Group. The Proposed Rights Issue will involve the issue of 556,203,396 New Shares, representing approximately 47.6 per cent. of Gemfields' share capital in issue as at the Latest Practicable Date.

The UK Issue Price of 4.22 pence per New Share represents:

• a 19.7 per cent. discount to the theoretical ex-Rights price based on the closing price of 5.75 pence per Share; and

• a 35.0 per cent. discount to the 30-day volume weighted average price per share of 6.50 pence per Share,

in each case on the Latest Practicable Date.

The SA Issue Price of ZAR1.06860 per New Share represents:

• a 21.5 per cent. discount to the theoretical ex-Rights price based on the closing price of ZAR1.50000 per Share; and

• a 28.8 per cent. discount to the 30-day volume weighted average price per share of ZAR1.50049 per Share,

in each case on the Latest Practicable Date.

In order to provide certainty of funding to the Company, subject to the passing of the Resolutions at the Extraordinary General Meeting, the Proposed Rights Issue will be underwritten by the Underwriters, (1) Assore International Holdings Limited ("AIH"); and (2) Rational Expectations (Pty) Ltd ("Rational"), in accordance with the terms of the Rights Issue and Underwriting Agreement. Accordingly, AIH, which currently holds approximately 29.14 per cent of the issued share capital of Gemfields, and Rational, which, together with the parties it represents as set out in more detail in paragraph 16 of Part II, currently holds approximately 15.49 per cent. of the issued share capital of Gemfields, in each case at the Latest Practicable Date, have undertaken to take up their respective entitlements in full in the Proposed Rights Issue and to collectively underwrite, in the Agreed Proportions, the entirety of the Proposed Rights Issue in excess of their respective entitlements. The Proposed Rights Issue is being underwritten by the Underwriters such that the Proposed Rights Issue shall result in gross proceeds of approximately USD30 million being raised.

The Committed Shareholders, including the Underwriters, have given irrevocable undertakings to take up the Committed Shares (being, in aggregate, 299,572,845 New Shares). Further details of the irrevocable undertakings are set out at paragraph 9 of Part II of this document.

In addition, each Underwriter has entered into an individual Pre-Funding Agreement with the Company, pursuant to which: (1) AIH shall make a loan in the amount of USD8,742,000 available to the Company; and (2) Rational shall make a loan in the amount of USD4,646,000 available to the Company (each being a "Loan") in each case, on the date of the publication of this Circular. This will provide the Company with an immediate working capital injection pending the completion of the Proposed Rights Issue. Each Loan will act as an advance payment by the relevant Underwriter for its Rights under the Proposed Rights Issue and repayment of each such Loan shall be set-off against the amount otherwise owed by the relevant Underwriter to the Company for its Rights and the Underwritten Shares it has committed to subscribe for under the terms of the Proposed Rights Issue and the Rights Issue and Underwriting Agreement. Further details of each Pre-Funding Agreement are set out in paragraphs 11.9 and 11.10 of Part II of this document.

In the event that no Qualifying Shareholders (save for the Underwriters and the Committed Shareholders) take up their Rights, AIH would be required to subscribe for, in aggregate, 329,659,331 New Shares, representing approximately 19.1 per cent. of the voting rights of the Company's issued share capital immediately following the Proposed Rights Issue. This would mean that AIH, (when taking into account the existing 340,367,121 Ordinary Shares it holds as at the Latest Practicable Date), together with any persons acting in concert with AIH, would have a maximum shareholding of 670,026,452 Ordinary Shares, representing 38.9 per cent. of the issued share capital of the Company following completion of the Proposed Rights Issue. The maximum shareholding of Rational, together with the parties it represents as set out in more detail in paragraph 16 of Part II, in such circumstances would be 356,088,477 Ordinary Shares, representing 20.7 per cent. of the issued share capital of the Company following completion of the Proposed Rights Issue.

Given the maximum number of Ordinary Shares that could be held by AIH, and any persons acting in concert with AIH, following the Proposed Rights Issue, the Takeover Panel has been consulted and has agreed to waive the requirement for AIH and any persons acting in concert with AIH to make a general offer under Rule 9 of the Takeover Code in cash for Ordinary Shares which might otherwise arise as a result of the issue of the Proposed Rights Issue, subject to the Rule 9 Waiver Resolution (as set out in the notice convening the Extraordinary General Meeting) being passed on a poll of the Independent Shareholders. To be passed, the Rule 9 Waiver Resolution will require a simple majority of the votes cast by the Independent Shareholders to be in favour.

Further details in relation to the Proposed Rights Issue (including, without limitation, the timetable of events) will be set out in the Prospectus which is expected to be published by the Company, subject to the passing of the Resolutions and the approval of the FCA and the JSE, on or around 20 May 2025.

The Directors believe that the receipt of proceeds from the Proposed Rights Issue will strengthen the Group's financial position.

As set out in more detail in paragraphs 8 (Rule 9 Waiver and Maximum Control Position) and 10 (Extraordinary General Meeting) below, the Shareholders will be asked at the Extraordinary General Meeting to approve the following Resolutions:

(a) an Ordinary Resolution to be passed by the Independent Shareholders on a poll to approve the Rule 9 Waiver Resolution;

(b) a Special Resolution to grant the Directors authority to allot and issue New Shares for cash free of pre-emption rights in connection with the Proposed Rights Issue; and

(c) an Ordinary Resolution to approve the Underwriting Issue to the Underwriters Resolution.

Please refer to the Notice of Extraordinary General Meeting for a detailed description of the Resolutions to be voted on by Shareholders at the Extraordinary General Meeting.

The Proposed Rights Issue is conditional on:

(a) all of the Resolutions being passed by the requisite majority of Shareholders;

(b) the publication of the Prospectus on or around 20 May 2025;

(c) AIM Admission of the New Shares;

(d) approval by the JSE Ltd of the listing and trading of the New Shares and the Letters of Allocation on the JSE Main Board; and

(e) the Rights Issue and Underwriting Agreement in respect of the Proposed Rights Issue becoming unconditional in accordance with its terms and not having been terminated prior to JSE Admission.

Therefore, if all of the Resolutions are not passed by the requisite majority of Shareholders, or if any of the other conditions are not satisfied, the Proposed Rights Issue will not proceed.

AIH has agreed to vote its 29.14 per cent. shareholding in Gemfields in favour of all of the Resolutions save for the Rule 9 Waiver Resolution. Rational has agreed to vote its shareholding, together with the shareholdings of the parties it represents as set out in more detail in paragraph 16 of Part II, being in aggregate 15.49 per cent. of the issued share capital of Gemfields, in favour of all of the Resolutions save for the Rule 9 Waiver Resolution, which it is precluded from voting on.

The purpose of this Circular is to give you details of the Proposed Rights Issue to ensure Shareholders have all relevant information prior to the Extraordinary General Meeting.

Please read the contents of this Circular (including the Notice of Extraordinary General Meeting) in their entirety. Should the Resolutions be passed by Shareholders, the Prospectus will subsequently be published, setting out the full terms and conditions of the Proposed Rights Issue.

2. The Group's business

Gemfields is a world-leading responsible miner and marketer of coloured gemstones. 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 controlling interests in various other gemstone mining and prospecting licences in Zambia, Mozambique, Ethiopia and Madagascar.

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 through Fabergé's designs, advancing the Group's "mine and market" vision.

Gemfields has developed a proprietary grading system and a pioneering auction platform to provide a consistent supply of coloured gemstones to downstream markets, a key component of Gemfields' business model that has played an important role in the growth of the global coloured gemstone sector.

The Company is incorporated in Guernsey and has a primary listing on the General Segment of the JSE Main Board and is quoted on AIM in London (as a secondary listing), with a market capitalisation at the Latest Practicable Date of approximately USD86.9 million.

3. Background to and reasons for the Proposed Rights Issue

Introduction

Since the second half of 2023, Gemfields has undertaken material capital expenditure investment programmes across its business in order to secure the future operational performance of the business and to position the Group for growth. The key investment projects have been:

i. the 18-month construction of MRM's second processing plant, PP2, the single largest investment Gemfields has ever made with an initial capital expenditure outlay of c. USD70 million. The plant is due to go online by the end of the first half of 2025 and has been funded through USD55 million of in-country debt facilities with the remaining from existing cash reserves. There will be additional mining fleet related capital expenditure expected from December 2025 to December 2026 of c. USD15 million;

ii. an upgraded and enlarged processing plant at Kagem (project completed July 2024) (aggregate capital investment of USD1.3 million);

iii. increase of yellow goods and fleet at both Kagem and MRM, and replacing aged equipment (project completed December 2024) (aggregate capital investment of USD35.4 million); and

iv. development assets to expand, and diversify risk across the business (aggregate capital investment of USD16.7 million in 2024).

The investment required to deliver these projects has required significant deployment of available working capital alongside a material increase in the Group's net debt. Additional debt facilities totalling USD66 million have been entered into since the start of 2024 and the Group's net debt position as at 31 December 2024 was USD80.5 million, compared to a net cash position of USD11.1 million as at 31 December 2023. It is expected that the Group's net debt position will exceed USD100 million at points during 2025 as it fully draws down on its debt.

Gemfields' management was aware of the careful financial path it was leading the business along through 2024 and into 2025, and was confident that it would be able to achieve all of the Group's objectives, without the need for additional funding.

Unfortunately, four simultaneous and material challenges, which management believe are transient, have been impacting the business and have resulted in the need for additional external funding in the short term.

Four simultaneous challenges are and have been materially impacting Gemfields

As stated in the Company's announcement dated 23 December 2024, Gemfields has been experiencing four significant negative impacts to its business simultaneously, at the same time as it funds a growth-focused investment cycle for the future development of the business.

These challenges are viewed by management as being transient, whilst having a direct impact on Gemfields' recent auction revenues and an expectation that they will impact future auction revenues in 2025. Whilst the civil unrest and associated supply chain and logistical interruptions in Mozambique have since materially improved, further unrest cannot be ruled out.

The principal factors that have resulted in materially lower auction revenues in the second half of 2024 and which could also impact auction revenues in 2025 are:

i. disturbed emerald market dynamics arising from an oversupply of Zambian emeralds at discounted prices by a competing Zambian emerald producer during the second half of 2024, compounded by conflicting auction dates and giving rise to a poor Zambian emerald market outlook during the first half of 2025;

ii. lower production of premium rough rubies at MRM;

iii. uncertainty in the luxury-goods and gemstone market generally given economic headwinds in China and geopolitical turbulence; and

iv. civil unrest, illegal mining, insurgency and associated supply chain and logistical interruptions in Mozambique.

Further details on the ongoing challenges and how Gemfields is addressing them follows:

The First Challenge: disturbed emerald market dynamics from the actions of a competing Zambian emerald producer

Gemfields' principal competitor for the production and marketing of Zambian emeralds has taken recent actions that, the Directors believe, have had the effect of damaging the supply and demand dynamics of the emerald market in the short to medium term. This competitor conducted three rough emerald auctions in three consecutive months (September to November 2024), the timing and pricing of which impacted Gemfields' own auctions. This is at odds with their prior approach and caused uncertainty in the emerald market.

In November 2024, this was demonstrated when an auction was promoted as "the largest emerald auction in history" and was scheduled to start the day after Gemfields' higher-quality auction closed. The effect of this was that customers were less likely to bid fair market price if there were large quantities of potentially cheap emeralds on offer the day after Gemfields' auction closed.

This has markedly impacted Gemfields' performance at its last two emerald auctions (commercial- quality in September 2024 and higher-quality in November 2024), with significantly lower bids for the mid and lower quality emeralds and ultimately resulting in Gemfields' emerald revenues materially underperforming in the second half of 2024. In its additional auction in February 2025 of higher-quality emeralds which were previously unsold in the November 2024 auction, the Company saw an improvement in both demand and pricing, although the market remains subdued.

How Gemfields is addressing the first challenge:

Gemfields has no appetite to change its fundamental approach to auctions, which focuses on generating the most value for the emeralds mined at Kagem, for the benefit of all stakeholders, including its customers.

This also maximises the value generated for the local community and Zambian government in the form of mineral royalties, corporation tax paid, dividends to the government and export taxes/levies. In 2023 this amounted to 31 per cent. of Gemfields' emerald revenue, and 19 per cent of revenue from 2008 to 2023. Gemfields repatriates auction revenues for all of its emeralds sold, ensuring the value is recognised in country and at the full sale price rather than a materially lower export price.

Gemfields remains committed to leadership and market stability in the emerald market and takes proactive steps to support the market by withholding certain lots that do not achieve satisfactory bidding. This approach helps foster a more secure and sustainable market for all stakeholders including our customers.

Kagem is ensuring its costs are carefully managed during this period of uncertainty and has paused mining in Kagem's pits, only processing its considerable stockpile of pre-mined emerald bearing-ore through its recently upgraded wash plant to produce emeralds. This mining pause was introduced from 1 January 2025 and is currently due to be in place for 6 months or until such a time that Gemfields has confidence that the recent and transient over-supply of emeralds has subsided and the market returns to a normalised state. Not mining for any period of time may limit near-term production, as there is uncertainty as to the quantity and quality that would result from processing the stockpile, but would save approximately USD1.5 million per month in operating costs. Based on recent production statistics, overall emerald production at the wash plant is broadly aligned with internal expectations, while a lower proportion of premium emeralds have been recovered.

The Second Challenge: lower production of premium rough rubies at MRM

Each coloured gemstone is unique and, although geological methods can help identify areas where both emeralds and rubies should be found, currently there can be no certainty on the quantity, quality or value of such gemstones, until they are brought to the surface and processed.

Gemfields is significantly reliant for revenue on the discovery of 'premium' rough gemstones (the largest or best quality gemstones), especially so for rubies. Tumbled rubies also make a significant contribution to revenue. Based on recent analysis, 90 per cent. of Gemfields' ruby auction revenues since 2021 has come from just 5 per cent. of the weight of gemstones mined. Unfortunately, the Group's premium ruby production across 2024 has been significantly below historic averages.

In 2024, 40,006 carats of premium rubies were recovered, against a three-year average (2021-2023) of 74,931 carats produced. This reflects both a reduction in the grade achieved but, most importantly, the quantity of top-value rubies brought to auction and therefore the Group's revenues.

How Gemfields is addressing the second challenge

There is no indication so far that the lower production of 'premium' rubies, is due to any specific driver other than the natural variability of the geological conditions where the rubies are mined, and therefore management has the expectation that the production will improve again more towards such historic averages.

The relative lack of premium production at MRM will be significantly addressed by the completion of PP2, which will triple the ruby ore processing capacity from 200 tonnes per hour to 600 tonnes per hour. The new processing plant will allow Gemfields to:

a) process MRM's sizable stockpile of ruby ore standing at 1,476 thousand tonnes, on a 100% basis based on MRM's resources and reserves statement in the 2024 Annual Report;

b) bring to market additional sizes and colour variations of rubies - previously not practical given limited processing capacity; and

c) explore more of MRM's untapped licence areas, with currently only ~10 per cent. included within the life-of-mine calculation.

The plant will diversify the risk of future lower producing pockets of supply and expand the customer base as new types of rubies are brought to market.

The Third Challenge: uncertainty in the luxury-goods and gemstone market generally given economic headwinds in China and geopolitical turbulence.

Gemfields takes the cost of mining, processing, sorting and grading rough coloured gemstones in Zambia and Mozambique, before selling them in sealed-bid auctions. These typically take place four times a year for emeralds and twice a year for rubies.

Gemfields is subject to the dynamics of supply and demand with regards to pricing for its coloured gemstones but uses an intricate reserve price model to ensure the gemstones maintain a fair market price. The market demand for emeralds and rubies can vary over time and currently there are concerns over the luxury-goods industry, which is the primary market that buys the Company's 'premium' coloured gemstones.

Concerns over China's consumption of luxury-goods and other macroeconomic uncertainty raises the risk that Gemfields' future auctions could see lower demand and fewer coloured gemstones being sold for fair market prices. Lower demand could materially reduce the revenue Gemfields earns.

As announced on 22 November 2024, Gemfields' recent higher-quality emerald auction saw lesser bids for the lower-quality gemstones on offer and ultimately under-performed against internal expectations. In the additional auction in February 2025 of the higher-quality emeralds that were previously unsold at the November 2024 auction, the results indicated an improvement in both demand and pricing, although the market remains subdued.

Similarly, as announced on 12 December 2024, the mixed-quality ruby auction in December 2024 saw some softer prices and thinner bidding but represented a positive outcome under the current market conditions, reaffirming the stability of demand for Gemfields' rubies, and prices for fine-quality aligning well with the limited supply of these rare gemstones.

Additionally, Gemfields has limited visibility into its customers' levels of coloured gemstone stock, changes in the cost of cutting and polishing and the availability of credit to purchase coloured gemstones at its auctions.

How Gemfields is addressing the third challenge:

Consumption patterns for luxury-goods are typically cyclical and inter-linked with wider macroeconomic trends. Gemfields has previously seen these cycles play out, with coloured gemstones (specifically emeralds, rubies and sapphires) maintaining their underlying value during such periods of lower demand for luxury-goods.

By materially increasing the scale of production at MRM, through the construction of PP2 (the second processing plant due to complete by the end of the first half of 2025), Gemfields expects to be able to produce more higher-quality rubies which are more immune to market variability. This increased production will also open up new sizes and colours of rubies that previously were not produced at scale in order to focus on producing the highest-quality rubies. This will diversify Gemfields' customer base and expand the reach of coloured gemstones globally to new end-point consumers.

Gemfields' proprietary grading system alongside high-quality sorting and auction processes provides transparency to market participants in what they are purchasing. This can reduce the uncertainty in the value of the coloured gemstones being sold and help limit the natural variability in market pricing over time. Despite the recent market disruption, Gemfields will maintain its approach as a leader in standards and promoter of responsibly-mined coloured gemstones.

In addition, in 2025 so far, there have been signs of improved demand for jewellery. LVMH reported 3 per cent. quarterly organic growth in revenue in its 'Watches & Jewelry' business group in the fourth quarter of 2024.([1])

The Fourth Challenge: Impact of civil unrest in Mozambique.

The fourth challenge, which has already materially improved, relates to the civil unrest and associated supply chain and logistical interruptions in Mozambique between October 2024 and mid-January 2025 because of the contested presidential election. This civil unrest related disruption resulted in higher costs to access essential goods and fuel, and a three day pause in mining and processing in December 2024 as a number of employees were temporarily relocated in reaction to an attempted invasion of the MRM Village. The civil unrest is in general no longer taking place. However, lingering challenges remain amid heightened illegal miner intrusions onto MRM's licence area and a recent increase in insurgent activities.

How Gemfields is addressing the fourth challenge:

Gemfields worked carefully with its employees, contractors and suppliers during the period of civil unrest to limit any operational impact beyond increased costs and temporary pause of production as described above. Notwithstanding the ongoing insurgency risks and risk of any further disruption or re-escalation, MRM has operated as usual since the start of 2025.

Additional actions taken by Gemfields to reduce costs and streamline business activity

As announced on 23 December 2024, Gemfields has taken and continues to undertake actions to cut costs and streamline business activity, while prioritising construction and commissioning of PP2, which is regarded by Gemfields as a critical project to increase premium ruby production and deliver additional revenue for the Group by the end of 2025.

Gemfields is also considering the timing of emerald and ruby auctions to best match the requirements for working capital across the year.

In terms of cost cutting and operational changes, the actions include:

i. suspending, for a period expected to be up to 6 months, all mining at Kagem (with the suspension commencing from 1 January 2025). Instead, Kagem will focus on processing ore from Kagem's significant ore stockpile utilising the recently upgraded processing plant;

ii. halting all non-essential spend and suspending planned capital expenditure at its ruby development assets in northern Mozambique, namely Megaruma Mining Limitada ("MML") and Campos De Joia Limitada ("CDJ"). Eastern Ruby Mining ("ERM") will continue core developmental work but will delay the capital expenditure associated with its originally planned processing plant;

iii. halting operations at Nairoto Resources Limitada ("NRL"), the gold project situated north of MRM and seeking potential buyers;

iv. assessing strategic options in respect of Fabergé, the iconic luxury-brand owned by the Gemfields Group; and

v. targeted rationalisation of operations and businesses across the Group.

This list of actions is not exhaustive and Gemfields will continue to adjust its actions as circumstances change.

Additionally, the Company intends to continue the assessment of strategic options for Fabergé and in light of the progress made to date (as referenced above), the Board will consider viable and deliverable options following the conclusion of the Proposed Rights Issue.

4. Use of proceeds

Subject to the passing of the Resolutions and the completion of the Proposed Rights Issue, the Company is expected to raise approximately USD30 million (in gross proceeds). The proceeds of the Proposed Rights Issue will be used for general corporate purposes, and specifically to provide working capital liquidity and ensure the business is able to continue operating and fulfil its ongoing obligations such as paying employee salaries and key operating costs, in-between auctions.

5. Current Trading and Outlook

Current Trading

Since the end of the previous reporting period to 31 December 2024, Gemfields has held an auction, in February 2025, of higher-quality emeralds that were previously unsold from the November 2024 auction, earning total auction revenues of USD4.8 million, with 77 per cent. of lots sold at an average price of USD105.49 per carat.

This excludes any weight lost during the packaging process and therefore small adjustments to the ultimately invoiced amounts. A commercial-quality emerald auction and a small mixed-quality ruby auction is expected in April 2025.

In relation to production, Gemfields has seen coloured gemstone production continue to underperform at MRM for premium rubies, whilst Kagem has seen steadier production when taking into account the pause of mining since 1 January 2025.

Recent Kagem Production

Outlook

Following a successful Proposed Rights Issue that addresses the short-term working capital deficits, Gemfields is expected to be in a materially stronger position both financially and strategically. The cost cutting and strategic changes taken in recent months is significantly streamlining the business, improving efficiency and materially reducing the cost base. The level of capital expenditure at the business' development assets will also be remaining low through 2025 while Gemfields establishes a clear strategy and capital allocation policy for the future. At a high level, Gemfields' cost saving programme, as described in the section 'Additional actions taken by Gemfields', is expected to reduce Gemfields' annual operating cash cost base down by USD35-40 million to approximately USD130 million, compared to 2024.

For capital expenditure, the business expects a total spend in 2025 of c. USD50 million, split between

c. USD43 million at MRM, c. USD6 million at Kagem and c. USD1 million on development assets, primarily ERM. MRM's capital expenditure in 2025 largely relates to the remaining payments for the construction of the second processing plant of USD21 million, with USD10.2 million already paid this so far this year.

Gemfields expects that, following the conclusion of the Proposed Rights Issue, a number of the transient challenges set out above will have seen signs of improvement while it approaches the completion of its USD70 million investment in the second ruby processing plant at MRM, significantly transforming the production capacities of the mine.

6. Description of the Proposed Rights Issue

The Proposed Rights Issue is intended to raise net proceeds of approximately USD30 million via the issue of 556,203,396 New Shares. The Proposed Rights Issue is underwritten by the Underwriters in accordance with the terms of the Rights Issue and Underwriting Agreement.

In the UK, Panmure Liberum will be acting as Financial Adviser, co-ordinator and Corporate Broker in relation to the Proposed Rights Issue and is the Company's Nominated Adviser for the purposes of the AIM Rules for Companies. In South Africa, Investec is acting as JSE Sponsor in relation to the Proposed Rights Issue. Panmure Liberum will, subject to the terms of the Rights Issue and Underwriting Agreement, coordinate and advise the Company on the Proposed Rights Issue. A summary of the material terms of the Rights Issue and Underwriting Agreement is set out in paragraph 11.8 of Part II of this document.

Subject to the fulfilment of, amongst others, the conditions described below, it is expected that New Shares will be offered for subscription to Qualifying Shareholders (other than Qualifying South African Shareholders) at 4.22 pence per New Share, or, in the case of Qualifying South African Shareholders, ZAR1.06860 per New Share, payable in full on acceptance. The Proposed Rights Issue will be on the basis of:

10 New Shares for every 21 Existing Shares

held by and registered in the names of Qualifying Shareholders (other than Shareholders resident or with registered addresses in any of the Excluded Territories) on the relevant Record Date and so in proportion to any other number of Existing Shares each Qualifying Shareholder then holds and otherwise on the terms and conditions to be set out in the Prospectus and, in the case of Qualifying Non-CREST Shareholders or Qualifying South African Shareholders holding Existing Shares in certificated form (other than such Shareholders resident or with registered addresses in any of the Excluded Territories), the Provisional Allotment Letters or Forms of Instruction respectively.

The Proposed Rights Issue is expected to be conditional upon:

(a) the passing of all of the Resolutions by the requisite majority of Shareholders at the Extraordinary General Meeting;

(b) the publication of the Prospectus on or around 20 May 2025;

(c) AIM Admission becoming effective by not later than 8.00 a.m. (London time) on 29 May 2025 (or such later date as may be agreed between the Company, Panmure Liberum and the Underwriters being a date not later than 8.00 am on 30 June 2025);

(d) approval by the JSE of the listing and trading of the New Shares and the Letters of Allocation on the JSE Main Board and JSE Admission becoming effective by not later than 9.00 a.m. (London time) on 23 May 2025 (or such later date as may be agreed between the Company, Panmure Liberum and the Underwriters being a date not later than 8.00 am on 30 June 2025); and

(e) the Rights Issue and Underwriting Agreement becoming unconditional in all respects, and not having been terminated in accordance with its terms prior to the AIM Admission and the JSE Admission.

The New Shares will, when issued and fully paid, rank pari passu in all respects with the Existing Shares, including the right to receive all future dividends and other distributions declared, made or paid after the date of their issue.

The Proposed Rights Issue will result in the issue of 556,203,396 New Shares, which will form approximately 32.3 per cent. of the Shares in issue immediately following completion of the Proposed Rights Issue.

Subject to the Resolutions being approved and the Proposed Rights Issue taking place, the Rights Issue and Underwriting Agreement provides that the Underwriters will receive a commission of 2 per cent. of the gross proceeds raised from the issue of the Underwritten Shares, in the Agreed Proportions, to each respective Underwriter.

Further information on the Proposed Rights Issue, including the terms and conditions of the Proposed Rights Issue, the timetable of the Proposed Rights Issue and the procedure for acceptance and payment and the procedure in respect of Rights not taken up will be set out in the Prospectus which is expected to be published on or around 20 May 2025 on the Company's website and will be posted to Qualifying Shareholders thereafter.

7. Takeover Code

The Takeover Code applies to the Company. Under Rule 9 of the Takeover Code, any person who acquires an interest in shares (as defined in the Takeover Code) which, taken together with shares in which that person or any person acting in concert with that person is interested, carry 30 per cent. or more of the voting rights of a company which is subject to the Takeover Code is normally required to make an offer to all the remaining shareholders to acquire their shares.

Similarly, when any person, together with persons acting in concert with that person, is interested in shares which in the aggregate carry not less than 30 per cent. of the voting rights of such a company but does not hold shares carrying more than 50 per cent. of the voting rights of the company, an offer will normally be required if such person or any person acting in concert with that person acquires a further interest in shares which increases the percentage of shares carrying voting rights in which that person is interested.

An offer under Rule 9 of the Takeover Code must be made in cash at the highest price paid by the person required to make the offer, or any person acting in concert with such person, for any interest in shares of the company during the 12 months prior to the announcement of the offer.

Following completion of the Proposed Rights Issue, AIH will be interested in shares carrying more than 30% of the voting rights of the Company but will not hold shares carrying more than 50% of the voting rights of the Company. Any increase by AIH (together with any persons acting in concert with AIH from time to time) in its aggregate interest in shares will be subject to the provisions of Rule 9.

8. Rule 9 Waiver and Maximum Control Position

Pursuant to the Takeover Code, the Panel may waive the requirement for a general offer to be made in accordance with Rule 9 of the Takeover Code if, amongst other things, the shareholders of a company who are independent of the person who would otherwise be required to make an offer, and any person acting in concert with it, pass an ordinary resolution on a poll approving such a waiver.

AIH currently has an interest in 29.14 per cent. of the issued share capital of the Company as at the Latest Practicable Date and has agreed to underwrite the Proposed Rights Issue in the Agreed Proportions in accordance with the terms of the Rights Issue and Underwriting Agreement.

If all of the Qualifying Shareholders (including the Underwriters) take up their Rights and participate in the Proposed Rights Issue, AIH and any persons acting in concert with AIH would, in aggregate, continue to be interested in 29.14 per cent. of the voting rights of the issued share capital of the Company immediately following Admission.

However, assuming that:

(a) all Qualifying Shareholders (save for the Underwriters and the Committed Shareholders) renounce their Rights;

(b) no Shareholders who are resident or located in any one of the Excluded Territories subscribe for any New Shares;

(c) no other person converts any convertible securities or exercises any options or any other right to subscribe for Shares;

(d) the Rights Issue and Underwriting Agreement becomes unconditional in all respects and is not terminated in accordance with its terms prior to Admission;

(e) the Resolutions are passed by the Shareholders (excluding AIH, and any person acting in concert with AIH, and Rational, and any person acting in concert with Rational, in relation to the Rule 9 Waiver Resolution) at the Extraordinary General Meeting (without material amendment); and

(f) there are no other changes to the Company's issued share capital,

AIH and any persons acting in concert with AIH could, in aggregate, potentially be interested in a maximum of 670,026,452 Shares, representing approximately 38.9 per cent. of the voting rights of the Company's issued share capital immediately following the Proposed Rights Issue.

Following completion of the Proposed Rights Issue, AIH and any persons acting in concert with AIH could, potentially, be interested in more than 30 per cent. of the voting rights but will not hold shares carrying more than 50 per cent. of the voting rights of the Company. Any increase in the aggregate interest in shares of AIH and any persons acting in concert with AIH will be subject to the provisions of Rule 9.

The Takeover Panel has been consulted and has agreed, subject to the passing of the Rule 9 Waiver Resolution by the Independent Shareholders on a poll at the Extraordinary General Meeting, to waive the obligation of AIH and any persons acting in concert with AIH to make a mandatory offer for the Ordinary Shares not already owned by it which could potentially arise following completion of the Proposed Rights Issue. Accordingly, the Company is proposing the Rule 9 Waiver Resolution to seek the approval of Independent Shareholders to the Rule 9 Waiver Resolution. AIH is not eligible to vote on the Rule 9 Waiver Resolution in respect of the Ordinary Shares held by it and any of the persons acting in concert with it. AIH has undertaken to procure (to the extent that it is legally able to do so) that any persons acting in concert with AIH who hold Ordinary Shares will not vote on the Rule 9 Waiver Resolution. For the purposes of the Takeover Code, Rational is not considered to be acting in concert with AIH in connection with the Proposed Rights Issue but is not considered independent of AIH and is therefore not an Independent Shareholder.

Under Rule 25.2 of the Takeover Code, any director who has a conflict of interest should normally be excluded from the recommendation of the board to the Independent Shareholders with respect to the proposed Rule 9 Waiver Resolution. As at the date of this document, Patrick Sacco and Kieran Daly, are both directors of the Company and also directors of AIH, and therefore have a conflict of interest by virtue of not being independent of AIH. As such, they do not have any involvement in the recommendation of the board to the Independent Shareholders, and do not form part of the Independent Directors.

Shareholders (excluding AIH and Rational) are therefore asked to vote in favour of the Rule 9 Resolution at the Extraordinary General Meeting in order for the Proposed Rights Issue to proceed.

The Independent Directors believe it is in the best interests of the Company that the Rule 9 Waiver Resolution be passed and hereby recommend that Independent Shareholders vote in favour of the Rule 9 Waiver Resolution. Panmure Liberum, as the Company's independent financial adviser, has provided formal advice to the Independent Directors that it considers the terms of the Rule 9 Waiver Resolution to be fair and reasonable and in the best interests of Shareholders and the Company as a whole. In providing this advice, Panmure Liberum has taken into account the Independent Directors' commercial assessments as well as AIH's future intentions in relation to the Company (as set out in paragraph 2.8 of Part II of this document). In accordance with the requirements of the Takeover Code: (1) AIH is not permitted to vote on the Rule 9 Waiver Resolution in respect of its aggregate holding of 340,367,121 Ordinary Shares; and (2) Rational, together with the parties it represents as set out in more detail in paragraph 16 of Part II, are not permitted to vote on the Rule 9 Waiver Resolution in respect of their aggregate holdings of 180,896,490 Ordinary Shares.

Shareholders should note that, in the event that the Rule 9 Waiver Resolution is approved by Independent Shareholders and the Proposed Rights Issue takes place, AIH will not be restricted from making a subsequent offer in the future for the Company.

Following completion of the Proposed Rights Issue, Rule 9 of the Takeover Code will continue to apply to AIH and any persons acting in concert with AIH, as its overall shareholding will not exceed 50 per cent. of the voting rights of the Company. This means AIH would be required to make a general offer to all Shareholders if it or persons acting in concert with it were to acquire further Shares in addition to those which are the subject of the Rule 9 Waiver Resolution, unless a further waiver is obtained.

Unless the Panel agrees otherwise, the Rule 9 Waiver will be invalidated if any purchases of Ordinary Shares are made by AIH or any of its concert parties in the period between the date of this document and the Extraordinary General Meeting.

Your attention is drawn to Part II (Additional Information) of this document which sets out certain further information and financial information that is required to be disclosed in this document pursuant to the rules contained in the Takeover Code.

9. Related Party Transactions

The entry into the Rights Issue and Underwriting Agreement with the Underwriters and the entry into each of the AIH Pre-Funding Agreement and the Rational Pre-Funding Agreement with the Underwriters are each "related party transactions" for the purposes of Rule 13 of the AIM Rules. The Independent Directors consider, having consulted with Panmure Liberum, the Company's nominated adviser for the purposes of the AIM Rules, that the terms of the related party transactions are fair and reasonable insofar as the Shareholders of the Company are concerned.

For purposes of the JSE Listings Requirements, the Rights Issue and Underwriting Agreement is not regarded as a related party transaction as the commission payable to the related parties (being the Underwriters) is not greater than the current market related rates as confirmed by the independent Non- Executive Directors of the Company, and as such falls within the exemptions contemplated under paragraph 10.6(c)(vii) of the JSE Listings Requirements pertaining to transactions that do not constitute related party transactions.

The Pre-Funding Agreements, for purposes of the JSE Listings Requirements, are not regarded as a related party transaction as each is an agreement involving the lending of money by a related party (being each Underwriter) to the Company on normal commercial terms and on an unsecured basis and as such falls within the exemption contemplated in paragraph 10.6(c)(i) of the JSE Listings Requirements pertaining to transactions that do not constitute related party transactions.

10. Extraordinary General Meeting

Part IV of this document sets out a notice convening an Extraordinary General Meeting of Gemfields to be held at 123 Victoria Street, Westminster, London, SW1E 6DE on 19 May 2025 at 10.00 a.m. (London time) to consider and, if thought fit, to approve the Resolutions. The Resolutions are set out in full in the Notice of Extraordinary General Meeting.

Gemfields has facilitated means by which all those holding Existing Shares on the Registers will be able to vote and/or appoint a proxy by electronic means, further details of which are set out in the explanatory notes in the Notice of General Meeting and in the accompanying Form of Proxy.

The Directors have taken the decision to dispatch a notice to convene the Extraordinary General Meeting prior to the announcement of the terms of the Proposed Rights Issue and the publication of the Prospectus in connection with it in order to enable the Proposed Rights Issue to be completed by the end of June 2025, whilst meeting timing constraints imposed by UK and South African legal and regulatory requirements. Accordingly, the Directors expect that, subject to FCA and JSE approval, the Prospectus in connection with the Proposed Rights Issue will be published on or around 20 May 2025.

Resolution 1

Resolution 1, the Rule 9 Waiver Resolution, will be proposed as an Ordinary Resolution.

The Rule 9 Waiver Resolution is required for the reasons which are set out in paragraph 8 of this Part I of this document. In accordance with the Takeover Code, the Rule 9 Waiver is subject to the passing of this resolution by the Independent Shareholders on a poll at the Extraordinary General Meeting. As required by the Takeover Code, the Rule 9 Waiver Resolution will be taken on a poll of the Independent Shareholders. AIH, and any persons acting in concert with AIH, and Rational, and any persons acting in concert with Rational, are not eligible to vote on the Rule 9 Waiver Resolution.

Resolution 2

Resolution 2 will be proposed as a Special Resolution.

Resolution 2 proposes that, subject to and conditional upon the passing of Resolution 1, the Directors be authorised to exercise all the powers of the Company to allot and issue shares for cash up to an aggregate nominal amount of ordinary share capital of USD5,562 and to do so free of pre-emption rights (howsoever arising, whether pursuant to article 6 of the Company's Articles or otherwise). This represents in excess of 47.6 per cent. of the total ordinary issued share capital of as at the Latest Practicable Date. The Directors intend to use the authority of Resolution 2 to allot and issue 556,203,396 New Shares for cash in connection with the Proposed Rights Issue, and for no other purpose and to allow the Directors to deal with treasury shares, fractional entitlements, record dates and legal, regulatory or practical problems in, or under the laws of, any territory or any other matter in connection with the Proposed Rights Issue. The authority will expire at the conclusion of Gemfields's annual general meeting in 2025 or, if earlier, on the date that is 15 months after the passing of this Resolution. All shareholders are eligible to vote on this Resolution without restriction.

Resolution 3

Resolution 3 will be proposed as an Ordinary Resolution.

The Underwriting Issue to the Underwriters Resolution is required to allow New Shares to be allotted and issued to, inter alia, the Underwriters in accordance with the terms of the Proposed Rights Issue and Underwriting Agreement in the event that any other Qualifying Shareholders do not take up their Rights and participate in the Proposed Rights Issue. All shareholders are eligible to vote on this Resolution without restriction.

The Directors have decided that the fairest way for the Extraordinary General Meeting to proceed would be by way of poll. This means that every eligible Shareholder present in person or by proxy has one vote for every Ordinary Share held.

Conducting a meeting by way of a poll ensures that all Shareholders are given the opportunity to participate in the decision-making of the Company and have their votes recorded even if they do not attend the meeting in person.

The Proposed Rights Issue is conditional inter alia on the passing of all of the Resolutions. If any of the Resolutions are not approved at the Extraordinary General Meeting, Gemfields will be unable to proceed with the Proposed Rights Issue.

11. Irrevocable Undertakings

AIH has irrevocably undertaken to vote in favour of the Resolutions, other than the Rule 9 Waiver Resolution which it is precluded from voting on, at the Extraordinary General Meeting. Rational has irrevocably undertaken to vote in favour of the Resolutions, other than the Rule 9 Waiver which it is precluded from voting on, and has procured that those parties that it represents (as set out in more detail in paragraph 16 of Part II) irrevocably undertake to vote in favour of such Resolutions. Similarly, each of those Independent Directors who hold Existing Shares have also entered into an irrevocable undertaking to vote in favour of all of the Resolutions at the Extraordinary General Meeting. Furthermore, certain significant shareholders of the Company have also entered into irrevocable undertakings to vote in favour of the Resolutions. Further details of the irrevocable undertakings are set out at paragraph 9 of Part II of this document.

In addition to undertaking to vote in favour of the Resolutions, the Committed Shareholders, including the Underwriters, have each given an irrevocable undertaking to take up their Rights under the Proposed Rights Issue. Further details of the irrevocable undertakings are set out at paragraph 9 of Part II of this document.

12. Additional information

Your attention is drawn to the additional information set out in this document. You are advised to read the whole of this document and not to rely solely on the information contained in this letter.

13. Overseas Shareholders

The Prospectus will contain information in relation to the Proposed Rights Issue for Overseas Shareholders who have registered addresses outside the United Kingdom or South Africa, or who are residents of or located in countries other than the United Kingdom or South Africa.

Shareholders who are resident or located in any one of the Excluded Territories will not be entitled to participate in the Proposed Rights Issue and the Prospectus will not be posted to them.

14. Independent Advice

Panmure Liberum has provided competent, independent advice to the Independent Directors, in accordance with the requirements of paragraph 4(a) of Appendix 1 to the Takeover Code, in relation to the granting of the Rule 9 Waiver.

This advice was provided by Panmure Liberum to the Independent Directors only and, in providing such advice, Panmure Liberum has taken into account the Independent Directors' commercial assessments as well as AIH's future intentions in relation to the Company (as set out in paragraph 2.8 of Part II of this document). Panmure Liberum confirms that it is independent of AIH and has no commercial relationship with it.

15. Action to be taken in respect of the Extraordinary General Meeting

AIM Shareholders

A Form of Proxy for use at the Extraordinary General Meeting by those shareholders whose Ordinary Shares are admitted to trading on AIM accompanies this document. The Form of Proxy should be completed and signed in accordance with the instructions thereon and returned to the UK Registrar, Computershare Investor Services (Guernsey) Limited, c/o The Pavilions, Bridgwater Road, Bristol BS99 6ZY, as soon as possible, but in any event so as to be received by no later than 15 May 2025 (or, if the Extraordinary General Meeting is adjourned or postponed, 48 hours (excluding any part of a day that is not a working day) before the time fixed for the adjourned or postponed meeting).

If you hold your Existing Shares in uncertificated form in CREST, you may vote using the CREST Proxy Voting service in accordance with the procedures set out in the CREST Manual. Further details are also set out in the notes accompanying the Notice of Extraordinary General Meeting at the end of this document. Proxies submitted via CREST must be received by the UK Registrar (Participant ID: 3RA50) by no later than 15 May 2025 (or, if the Extraordinary General Meeting is adjourned or postponed, 48 hours (excluding any part of a day that is not a working day) before the time fixed for the adjourned or postponed meeting). The Company may treat as invalid a proxy appointment sent by CREST in the circumstances set out in the CREST Regulations.

JSE Shareholders

a. If you are a JSE Dematerialised Shareholder other than with "own name" registration

Your CSDP or broker should contact you in the manner stipulated in the agreement concluded between you and your CSDP or broker to ascertain how you wish to cast your votes at the Extraordinary General Meeting and thereafter to cast your votes in accordance with your instructions. If you have not been contacted by your CSDP or broker, you should contact your CSDP or broker and furnish them with your voting instructions. If your CSDP or broker does not obtain voting instructions from you, it will be obliged to vote in accordance with the provisions contained in the agreement concluded between you and your CSDP or broker. Similarly, you should contact your CSDP or broker in the event that you wish to appoint another person to vote as your proxy at the Extraordinary General Meeting. You must NOT complete the attached Forms of Proxy.

b. If you are a JSE Certificated Shareholder or a JSE Dematerialised Shareholder with "own name" registration

A Form of Proxy for use at the Extraordinary General Meeting by those shareholders whose Ordinary Shares are admitted to the JSE accompanies this document. The Form of Proxy should be completed and signed in accordance with the instructions thereon and returned to the SA Registrar, as soon as possible, but in any event so as to be received by no later than 15 May 2025 (or, if the Extraordinary General Meeting is adjourned or postponed, 48 hours (excluding any part of a day that is not a working day) before the time fixed for the adjourned or postponed meeting).

You are not required to take any action at present with respect to the Proposed Rights Issue.

New Shares offered under the Proposed Rights Issue will be offered to Shareholders pro rata to their existing shareholdings as at the relevant Record Date.

By subscribing for the New Shares to be offered under the Prospectus, a Shareholder will avoid a dilution in its percentage of their shareholding resulting from the Proposed Rights Issue.

16. Importance of vote

As explained above, the Proposed Rights Issue is conditional, inter alia, upon the passing of the Resolutions at the Extraordinary General Meeting.

If the Resolutions are not passed at the Extraordinary General Meeting, the Proposed Rights Issue will not take place and the proceeds of the Proposed Rights Issue will not be received by the Company.

Shareholders should note that, if the Company does not receive the proceeds of the Proposed Rights Issue, the Company would have to seek other forms of emergency funding. The Company is unable to provide any assurance that alternative financing could be secured. Failure to secure alternative forms of finance on commercially acceptable terms or at all could have a material adverse effect on the Group's business, financial condition, prospects, capital resources, cash flows, share price, liquidity, results and/or future operations.

17. Recommendation of Directors

The Proposed Rights Issue is conditional, inter alia, upon the passing of all of the Resolutions at the Extraordinary General Meeting including, without limitation, the Rule 9 Waiver Resolution. Shareholders should be aware that, if all of the Resolutions are not approved at the Extraordinary General Meeting, the Proposed Rights Issue will not proceed.

The Independent Directors believe it is in the best interests of the Company that the Rule 9 Waiver Resolution be passed and hereby recommend that Independent Shareholders vote, or procure the vote, in favour of the Rule 9 Waiver Resolution. In reaching this decision, the Independent Directors have taken into account that AIH does not currently intend to change (or to seek to change) the strategic plans and operations of the Group nor to make any changes to employment and/or the locations in which the Group operates. Panmure Liberum, as the Company's independent financial adviser, has provided formal advice to the Independent Directors that it considers the terms of these proposals to be fair and reasonable and in the best interests of Shareholders and the Company as a whole. In providing this advice, Panmure Liberum has taken into account the Independent Directors' commercial assessments as well as AIH's future intentions in relation to the Company (as set out in paragraph 2.8 of Part II of this document).

In accordance with the requirements of the Takeover Code, AIH is not permitted to vote on the Rule 9 Waiver Resolution in respect of its aggregate holding of 340,367,121 Ordinary Shares but has irrevocably undertaken to vote in favour of the other Resolutions.

In accordance with the requirements of the Takeover Code, Rational, together with the parties it represents as set out in more detail in paragraph 16 of Part II, are not permitted to vote on the Rule 9 Waiver Resolution in respect of their aggregate holdings of 180,896,490 Ordinary Shares but have irrevocably undertaken to vote in favour of the other Resolutions.

The Independent Directors who hold Existing Shares have irrevocably undertaken to vote in favour of all the Resolutions in respect of their own shareholdings amounting to 27,315,661 Existing Shares (representing 2.34 per cent. of the Existing Shares in issue as at the Latest Practicable Date).

Yours faithfully,

Bruce Cleaver

Chair

DEFINITIONS

The following definitions apply throughout this announcement, unless the context requires otherwise:

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