Gemfields plc
('Gemfields' or 'the Company')
Results - Singapore Rough Ruby Auction
19 December 2016
Gemfields plc (AIM: GEM) is pleased to announce the results of its auction of rough ruby extracted by Montepuez Ruby Mining Limitada (which is 75% owned by Gemfields and 25% by local partner Mwiriti Limitada) from the Montepuez ruby deposit ('Montepuez') in Mozambique. The auction was held in Singapore from the 12 to the 16 of December 2016 and was the first ruby auction of this financial year.
Highlights
· Auction revenues of USD 30.4 million (the fourth highest ruby auction result to date);
· Average realised price of USD 27.79 per carat;
· 1,094,406 carats sold (80% by weight or 85% by market value) out of the total of 1,372,145 carats offered; and
· Seven Montepuez auctions held since June 2014 have generated USD 225.7 million in aggregate revenues.
Montepuez Ruby Auction
Gemfields' seventh auction of rough rubies and corundum from Montepuez saw 39 companies placing bids. The auction offered high and commercial grade rough rubies in both untreated and treated form. All treated lots were offered using industry accepted treatment techniques and on a fully disclosed basis.
The quality and quantity of the goods placed on offer was developed in response to market feedback which showed growing demand for rough rubies suited to the production of high quality jewellery as well as larger volume production runs, thereby allowing a broad cross-section of product to be placed on offer. The improved reliability of supply and the consistency of the Gemfields grading system continues to be well received by the Company's clients as it facilitates reduced risk, improved manufacturing efficiencies and an increased ability to meet consumer demand.
The auction generated total revenues of USD 30.4 million at an average realised price of
USD 27.79 per carat. Given the quality mix offered at this auction comprised a blend of varying qualities and sizes of material, a direct top-line comparison with the results of previous auctions is not feasible. On a quality for quality basis however, the per carat prices achieved continue to indicate good overall global demand when compared to previous auctions.
The auction results, which saw 58 of the 76 lots offered being sold, provided a high level of support for the Company's understanding of the current market demand profile, which was further supported by customer feedback received during the auction.
The results of the five most recent Montepuez auctions held to date are summarised below (and the prior auction results can be found in the 'further information' section at the end of this announcement):
|
AUCTION RESULTS
(RUBY & CORUNDUM)
|
APRIL '15 AUCTION
|
JUNE '15 AUCTION
|
DECEMBER '15
AUCTION
|
JUNE
'16
AUCTION
|
DECEMBER
'16
AUCTION
|
|
Dates
|
17-22 April 2015
|
16-21 June 2015
|
14-18 December 2015
|
13 - 19 June 2016
|
12 - 16 December 2016
|
|
Location
|
Jaipur, India
|
Singapore
|
Singapore
|
Singapore
|
Singapore
|
|
Type
|
Rough Ruby & Corundum (Commercial Quality)
|
Rough Ruby
(Higher Quality)
|
Rough Ruby (Higher and Medium Quality)
|
Rough Ruby & Corundum (Higher, medium and Commercial Quality)
|
Rough Ruby & Corundum (Higher and Commercial Quality)
|
|
Carats offered
|
4.03 million
|
72,208
|
92,136
|
1,601,145
|
1,372,145
|
|
Carats Sold
|
3.96 million
|
47,451
|
90,642
|
1,516,459
|
1,094,406
|
|
No. of lots offered
|
64
|
46
|
49
|
75
|
76
|
|
No. of lots sold
|
57
|
28
|
45
|
71
|
58
|
|
Percentage of lots sold
|
89%
|
61%
|
92%
|
95%
|
76%
|
|
Percentage of lots sold by weight
|
98%
|
66%
|
98%
|
95%
|
80%
|
|
Percentage of lots sold by market value
|
81%
|
72%
|
95%
|
98%
|
85%
|
|
Total sales realised at auction
|
USD 15.9 million
|
USD 29.3 million
|
USD 28.8 million
|
USD 44.3 million
|
USD 30.4 million
|
|
Average per carat sales value
|
USD 4.02/carat
|
USD 617.42/carat
|
USD 317.92/carat
|
USD 29.21/carat
|
USD 27.79/carat
|
The proceeds of this auction will be repatriated to Montepuez Ruby Mining Limitada in Mozambique, with the royalties due to the Government of Mozambique being paid on the full sales price achieved at the auction.
Gemfields' aggregate consolidated revenues from all rough gemstone auctions for the financial year to date stands at approximately USD 41.1 million. Gemfields' auctions of rough gemstones from the Kagem emerald mine in Zambia and from the Montepuez ruby deposit in Mozambique have now generated USD 662.9 million in total revenues.
Ian Harebottle, CEO of Gemfields, commented:
'We are very pleased with the results of Gemfields' seventh Montepuez ruby auction despite some of our customers being unable to attend while they adjust to the regional demonetisation policy changes they've experienced over the past few weeks.
The prices achieved at this auction, combined with the high percentage of the value sold, fully support our view of ongoing solid demand for responsibly sourced Mozambican rubies across key markets and categories. The recent prices obtained for fine cut-and-polished Mozambican rubies by international auction houses further underscore the exciting trajectory for rubies from Mozambique.
As always, we thank our customers, our business partners, our host government and give credit to every member of our devoted and hard-working global team.'
Further Information
The results of the first two Montepuez auctions are summarised below:
|
AUCTION RESULTS
(RUBY & CORUNDUM)
|
JUNE '14 AUCTION
|
DECEMBER '14 AUCTION
|
|
Dates
|
12-17 June 2014
|
3-8 December 2014
|
|
Location
|
Singapore
|
Singapore
|
|
Type
|
Rough Ruby & Corundum (Higher, medium and commercial Quality)
|
Rough Ruby
(Higher Quality)
|
|
Carats offered
|
2.03 million
|
85,491
|
|
Carats Sold
|
1.82 million
|
62,936
|
|
No. of lots offered
|
62
|
41
|
|
No. of lots sold
|
57
|
35
|
|
Percentage of lots sold
|
92%
|
85%
|
|
Percentage of lots sold by weight
|
90%
|
74%
|
|
Percentage of lots sold by market value
|
79%
|
93%
|
|
Total sales realised at auction
|
USD 33.5 million
|
USD 43.3 million
|
|
Average per carat sales value
|
USD 18.43/carat
|
USD 688.64/carat
|
ENQUIRIES:
|
Gemfields
|
[email protected]
|
|
Janet Boyce, CFO
|
+44 (0)20 7518 7283
|
|
|
|
|
Grant Thornton UK LLP
|
|
|
Nominated Adviser
|
|
|
Philip Secrett/Richard Tonthat/Jamie Barklem
|
+44 (0)20 7383 5100
|
|
|
|
|
J.P. Morgan Cazenove
|
|
|
Joint Broker
|
|
|
Jamie Riddell/James Deal
|
+44 (0)20 7742 4000
|
|
|
|
|
BMO Capital Markets Limited
|
|
|
Joint Broker
|
|
|
Jeff Couch/Neil Haycock/Tom Rider/Jenny Wyllie
|
+44 (0)20 7236 1010
|
|
|
|
|
Macquarie Capital (Europe) Limited
Joint Broker
Raj Khatri/Nick Stamp/Guy de Freitas
|
+44 (0)20 3037 2000
|
|
|
|
|
Tavistock
|
|
|
Jos Simson/Emily Fenton/ Barney Hayward
|
+44 (0)20 7920 3150
|
Notes to Editors:
Gemfields plc is a leading supplier of responsibly sourced coloured gemstones and is quoted on the AIM market of the London Stock Exchange (ticker: GEM).
Gemfields is the operator and 75 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 deposit in Mozambique (one of the most significant recently discovered ruby deposits in the world). In addition, Gemfields also holds a 50 per cent. interest in the Kariba amethyst mine in Zambia, as well as controlling interests in various other gemstone mining and prospecting licenses in Zambia, Mozambique, Colombia, Ethiopia, Madagascar and Sri Lanka.
Gemfields' outright ownership of the Fabergé brand - an iconic and prestigious brand of exceptional heritage - enables Gemfields to optimise positioning, perception and consumer awareness of coloured gemstones, advancing the Group's 'mine and market' vision.
Gemfields has developed a proprietary grading system and a pioneering auction and trading platform to provide a consistent supply of quality coloured gemstones to the global downstream markets. This is a key component of the Company's business model which the Directors believe has played an important role in the appropriate distribution and associated resurgence of the global coloured gemstone sector.
www.gemfields.co.uk