Gemfields’ Q2 Emerald Production Down 43%

Gemfields’ Q2 Emerald Production Down 43%

London–Mining in lower grade areas during the fiscal second quarter brought down both emerald and ruby production for Gemfields.

In the three-month period ended Dec. 31, emerald and beryl production was 4.7 million carats, compared with 8.2 million carats in the prior-year period, marking a 43 percent decrease. The company attributed the difference to the “varied nature of the mineralization and a lower grade zone mined” during the quarter at the Kagem mine in Zambia.

Total operating costs fell from $12.1 million to $10.2 million.

The company originally was scheduled to have an auction of high quality rough emeralds from the Kagem mine in the second quarter but the sale was postponed from December 2016 to this month to allow its rough emerald customers, many of whom are from India, to adjust to the demonetization program.

The sale now is slated for Feb. 13 to 17 in Lusaka, Zambia.

Ruby and corundum production also was down for the company during the quarter.

Gemfields mined 1.1 million carats of ruby and corundum in the three-month period, down from the 1.6 million carats in the comparable period in 2015. This was due to lower grade, but higher value, material being processed.

Total operating costs for the Montepuez mine in Mozambique were nearly flat at $6.6 million.

Gemfields did hold an auction of both high quality and commercial grade rough rubies from Dec. 12 to 16 in Singapore, which brought in revenues of $30.4 million.

The next mixed quality auction of rough rubies and corundum from Montepuez is slated for June in the same location.

In a company press release about the second quarter results, CEO Ian Harebottle noted a “buoyant” start to the year for the luxury market, both with Fabergé showing solid January sales demand and a positive market sentiment among the company’s customers who attended the Tucson gem shows.

Fabergé reported a strong second quarter, with sales orders agreed (those the brand has agreed and confirmed with customers) up 95 percent when compared with the prior-year period.

The number of sales transactions during the quarter also was up, increasing by 48 percent, while the average selling price per piece was up 12 percent.

Total operating costs were up 2 percent due in large part to increased spending on marketing and events.

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