Lusaka Emerald Auction Results

RNS Number : 8218D

Gemfields Group Limited

24 February 2020

 

GEMFIELDS GROUP LIMITED

(Incorporated in Guernsey)

(Guernsey registration Number: 47656)

(South African external company registration number 2009/012636/10)

Share code on JSE:GML  / AIM:GEM / BSX:GML.BH

  ISIN: GG00BG0KTL52  LEI: 21380017GAVXTCYS5R31

("Gemfields" or the "Company")

24 February 2020 

Lusaka Emerald Auction Results

Gemfields is pleased to announce the result of an auction of predominantly commercial quality rough emerald held in Lusaka, Zambia from 18-21 February 2020. The emeralds were extracted by Kagem Mining Ltd in Zambia ("Kagem", which is 75% owned by Gemfields and 25% by the Industrial Development Corporation of Zambia). The proceeds of this auction will be fully repatriated to Kagem in Zambia, with all royalties due to the Government of the Republic of Zambia being paid on the full sales prices achieved at the auction.

Highlights - Emerald Auction

· Auction revenues of USD 11.5 million

· Of the 25 lots offered, 19 were sold (76%)

· Average price of USD 4.01 per carat

· 64% of the carats offered were sold

· The 35 auctions of Kagem gemstones held since July 2009 have generated USD 647 million in total revenues

The auction saw 29 companies placing bids, generating total revenues of USD 11.5 million with an overall average value of USD 4.01 per carat. The auction saw 64% of the offered carats being sold (or 76% of the number of lots offered).

Gemfields' 35 auctions of emeralds and beryl mined at Kagem since July 2009 have generated USD 647 million in total revenues. The results of the five most recent commercial quality Kagem auctions are summarised in the table below:

AUCTION RESULTS (COMMERCIAL QUALITY)	Feb '18 AUCTION	Jul-Aug '18 AUCTION	Feb '19 AUCTION	Aug '19 AUCTION	Feb '20 AUCTION
Dates	19-22 Feb 2018	30 Jul - 2 Aug 2018	18-20 Feb 2019	19-22 Aug 2019	18-21 Feb 2020
Location	Jaipur, India	Lusaka, Zambia	Lusaka, Zambia	Lusaka, Zambia	Lusaka, Zambia
Type	Commercial Quality	Commercial Quality	Commercial Quality	Commercial Quality	Commercial Quality
Carats offered	3.73 million	2.89 million	4.15 million	10.68 million (*)	4.49 million
Carats sold	3.55 million	2.59 million	2.46 million	3.92 million	2.86 million
No. of companies placing bids	31	22	24	34	29
Average no. of bids per lot	5	6	5	6	6
No. of lots offered	21	21	23	35	25
No. of lots sold	19	17	16	26	19
Percentage of lots sold	90%	81%	70%	74%	76%
Percentage of lots sold by weight	95%	90%	59%	37% (*)	64%
Total sales realised at auction	USD 10.8 million	USD 10.9 million	USD 10.8 million	USD 18.6 million	USD 11.5 million
Average per carat sales value	USD 3.05/carat	USD 4.21/carat	USD 4.39/carat	USD 4.75/carat	USD 4.01/carat

(*) Unlike the other auctions tabulated above, August 2019 included beryl. The single lot of beryl (of 5 million carats) was unsold.

The specific auction mix and the quality of the lots offered at each auction vary in characteristics such as size, colour and clarity on account of variations in mined production and market demand. Therefore the results of each auction are not always directly comparable.

Adrian Banks, Gemfields' Managing Director of Product & Sales, commented:

"The results of our first auction of 2020 are in line with prior auctions of commercial quality emeralds and demonstrate a stable underlying market. It was however evident that the fallout of COVID-19 - the corona virus - dampened what might otherwise have been a buoyant result. Firstly, the uncertainty surrounding Chinese consumer demand in the wake of COVID-19 has understandably created negative sentiment in the mid-stream market. Secondly, a handful of our key auction customers did not travel to Lusaka as a result of the increased risk associated with COVD-19 and thirdly, the Hong Kong market - important for both gemstones and jewellery - has had to endure multiple successive misfortunes".

Further information on Gemfields Group Limited can be found at www.gemfieldsgroup.com

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Enquiries:

Gemfields	Nominated Adviser and Broker (AIM)
Sean Gilbertson / David Lovett / Mark Lawrie	finnCap
Tel: [phone]	Scott Mathieson / Edward Whiley
	Tel: [phone]
Sponsor (JSE)	IR / Financial PR
Investec Bank Limited	Camarco
	Gordon Poole / Jennifer Renwick / Nick Hennis
	Tel: [phone]

Additional information on Gemfields

Gemfields is a world leading supplier of responsibly sourced coloured gemstones. Gemfields is the operator and 75% owner of both the Kagem emerald mine in Zambia (believed to be the world's single largest producing emerald mine) and the Montepuez ruby 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 licenses 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, advancing the wider group's "mine and market" vision.

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

 

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