27th Mar 2012 07:00
Gemfields plc
("Gemfields" or the "Company")
Results - Singapore Rough Emerald Auction
27 March 2012
Gemfields plc (AIM: "GEM") is pleased to announce the results of the auction of (predominantly medium to higher quality) rough emeralds held in Singapore from 19-23 March 2012.
Highlights
- Robust auction revenues of USD 26.2 million
- Results reflect a significant increase of 46% over the 15 month period in
achievable quality-for-quality per carat prices
- Third auction of the current financial year generating aggregate sales of
USD 68.9 million
- Nine auctions held since July 2009 generating revenues totalling USD 124.7
million
- Auction results underscore the continued strong growth in global demand for
Gemfields' ethical Zambian emeralds across all quality grades
- Next auction of (predominantly lower quality) rough emeralds scheduled for
June 2012 in Jaipur
Gemfields held an auction of (predominantly medium to higher quality) rough emeralds in Singapore from 19 to 23 March 2012. Thirty two companies attended the auction, with twenty nine of these placing bids. The auction saw 0.77 million carats of emeralds mined by Gemfields placed on offer, with 0.69 million carats being sold and generating auction sales of USD 26.2 million.
While the Singapore auction of July 2011, which comprised of generally superior quality material overall, yielded USD 42.71 per carat, the overall quality characteristics of the emeralds placed on offer at last week's auction were more similar to those offered in the December 2010 auction in Johannesburg. The resultant average prices of USD 38.25 per carat achieved at the most recent auction thus demonstrates a quality-for-quality increase of some 46% over the 15 month period and provides a clear indication of robust growth in both achievable prices and demand for emeralds in general, and Gemfields ethical emeralds in particular.
Last week's auction was the third auction of the current financial year, ending 30 June 2012. The three auctions, one of which was for lower quality material, have generated aggregate sales of USD 68.9 million while the nine auctions held since July 2009 have generated USD 124.7 million in aggregate revenues.
Gemfields' next auction of (predominantly lower quality) rough emeralds is scheduled for June 2012 in Jaipur. The results of the six higher quality rough emerald auctions held to date are summarised below:
AUCTION RESULTS JUL `09 NOV '09 JUL `10 DEC `10
(HIGHER QUALITY) AUCTION AUCTION AUCTION AUCTION JUL `11 MAR ` 12
AUCTION AUCTIONDates 20-24 Jul 23-27 Nov `09 19-23 Jul 6-10 Dec `10 11-15 Jul 19-23 Mar `09 `10 `11 `12Location London, UK Johannesburg, London, UK Johannesburg, Singapore Singapore SA SAType Higher Higher Higher Higher Higher Higher Quality Quality Quality Quality Quality QualityCarats offered 1.36 million 1.12 million 0.85 million 0.87 million 1.07 million 0.77 millionCarats Sold 1.36 million 1.09 million 0.80 million 0.75 million 0.74 million 0.69 millionNo. of companies 23 19 37 32 38 29placing bidsAverage no. of 10 13 18 16 16 11bids per lotNo. of lots 27 19 27 19 25 23offeredNo. of lots sold 26 14 24 18 18 20Percentage of lots 96% 74% 89% 95% 72% 87%soldPercentage of lots 99.8% 97% 94% 86% 69% 89%sold by weightPercentage of lots 82% 76% 87% 99% 91% 94%sold by valueTotal sales USD 5.9 USD 5.6 USD 7.5 USD 19.6 USD 31.6 USD 26.2realised at million million million million million millionauctionAverage per carat USD USD USD USD USD USD
sales value 4.40/carat 5.10/carat 9.35/carat 26.20/carat 42.71/carat 38.25/carat
The Singapore auction was again used as a platform to further test levels of demand for rough emerald and beryl made available from other sources of supply (i.e. not certified as having been mined by Gemfields). None of this material is included in the data presented above. The most recent trial comprised of other rough emerald from Zambia and approximately half of this material (by value) was sold. The present net income accruing to Gemfields from traded material remains immaterial in the context of Gemfields' own production, and the Company will continue to refine and evolve the opportunities of selling rough from other sources of supply.
For ease of reference, the results of the three lower quality rough emerald and beryl auctions held to date are summarised below:
AUCTION RESULTS MARCH '10 MARCH `11 NOVEMBER `11
(LOWER AUCTION AUCTION AUCTION QUALITY)Dates 11-15 March 10-14 March 21-25 November 2010 2011 2011Location Jaipur, India Jaipur, India Jaipur, IndiaType Lower Quality Lower Quality Lower QualityCarats offered 28.90 million 16.83 million 10.83 millionCarats Sold 22.80 million 12.98 million 9.82 millionNo. of companies 25 44 27placing bidsAverage no. of bids 8 14 9per lotNo. of lots offered 56 35 26No. of lots sold 49 34 19Percentage of lots 88% 97% 73%soldPercentage of lots 78.9% 77% 91%sold by weightPercentage of lots 89% 99% 80%sold by valueTotal sales realised USD 7.2 USD 9.9 USD 11.0at auction million million million
Average per carat USD 0.31 per USD 0.77 per USD 1.12 per sales value
carat carat carat
Note: a larger volume of material was placed on offer in March 2010 following Gemfields extensive
inventory building exercise during 2008 and 2009.
Ian Harebottle, CEO of Gemfields, commented:
"Gemfields is delighted to announce another set of very encouraging auction results, testament to the success of our marketing initiatives and the consistency of the emeralds produced at our Kagem mine. Today's results demonstrate that Gemfields is consistently delivering on its integrated approach of combining industry-leading performance in three core areas: mining, the consistent supply of good quality well graded ethical gemstones, and pioneering coloured gemstone marketing and promotion. We have achieved record auction revenues for the financial year and will look to use this positive momentum to deliver continued growth in each of these core areas into the foreseeable future."
Enquiries:Gemfields [email protected] Shetty, CFO +44 (0)20 7518 3402Canaccord Genuity Limited +44 (0)20 7050 6500Nominated Adviser and Joint Broker to GemfieldsTarica Mpinga/Andrew ChubbJP Morgan Cazenove +44 (0)20 7155 8630Neil PassmoreTavistock Communications +44 (0)20 7920 3150Jos Simson/Lydia EadesNotes to Editors:
Gemfields plc is a leading gemstone miner listed on the AIM market of the London Stock Exchange . The Company's principal asset is the 75% owned Kagem emerald mine in Zambia, the world's single largest emerald mine. In addition to the Kagem emerald mine, Gemfields has a 50% interest in the Kariba amethyst mine in Zambia.
The Company also owns controlling stakes in a highly prospective ruby deposit in Mozambique and licences in Madagascar including ruby, emerald and sapphires deposits.
In July 2009 Gemfields commenced a formal auction programme for its Zambian emeralds. To date, the Company has held nine auctions which have generated revenues totalling USD 124.7 million.
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