Gemfields auction revenue falls as market softens

Coloured gemstones miner Gemfields (LSE: GEM; JSE: GML) fetched US$121 million in revenue from auctions in the six-month period to June 30, a 17% decline from a year ago as emeralds and rubies face challenges like the closely related diamond sector.

The London-based company said it had US$22.3 million in cash and cash equivalent by the end of the year’s first half, with US$66.7 million of outstanding debt, resulting in a net debt position of US$44.4 million.

Gemfields, who has a 75% stake in the Montepuez ruby mine in Mozambique, said construction of a second plant at the operation remains on budget and on track for completion by end of next year’s first half. 

Shares in Gemfields closed flat at 11.5 pence apiece in London on Friday, valuing the company at £134.8 million. 

Zambian emeralds

The gemstones miner, which also has 75% of the Kagem emerald mine in Zambia, said the asset’s wash plant upgrade is complete and operating at an increased processing rate.

Gemfields plans to conduct a high-quality emerald auction in the third quarter followed by another one and a mixed-quality ruby auction in the fourth quarter.

It said that commentary on the operational performance and financial results will be available in its interim results due to be published on September 27.

Last week, De Beers — the world’s largest diamond producer by value — revealed it was considered to once again cut output due to weak demand from top consumer China.