Gemfields (GEM:AIM)
Operational update for 3 month period ending 30 September 2016, the first quarter of the 2017 financial year.
Ian Harebottle, CEO of Gemfields , commented: “Work on new projects continues apace and plans remain on schedule to meet our annual target production of 40 million carats of rough emeralds from Kagem and 20 million carats of rough rubies from Montepuez within the next three years.Thanks to the full global launch of our new integrated marketing campaign, demand for our coloured gemstones continues to rise, ensuring that achievable prices generate robust auction results.”
- Emerald production at the 75% owned Kagem mine was 6m carats with an average grade of 174 cpt; (Q1 2016: 7.5m carats at 237cpt).
- Generated US$10.7m at an average value of US$3.28 per carat from commercial quality, rough emerald auction in September.
- Cash rock handling costs rose to US$2.37 per tonne from US$2.05 in Q1 2016 due to harder rock mining at deeper levels.
- Operating costs were US$10.2m (US$11.4m, Q1 2016).
- Unit operating costs US$1.70 per carat (Q1 2016: US$1.52 per carat).
- Next auction, December 2016 in Singapore will be predominately higher quality rough emeralds.
- Ruby and corundum production for the 75% owned Montepuez mine was 4.5m carats at an average grade of 44cpt (Q1 2016: 0.5m carats at 7cpt)
- Total operating costs US$5.8m (Q1 2016: US$6.1m).
- Unit operating costs US$1.29 per carat (Q1 2016: US$12.20 per carat); improvement is a result of the increase in carats produced.
- Cash rock handling unit costs US$4.27 per tonne (Q1 2016: US$4.50); as a result of increased efficiencies and favourable exchange rate movements.
- Stripping ratio decreased to 5.2 from 7.3 in Q1 2016 due to mining of exposed ore in Mugloto and Glass pits that was stripped in previous quarters.
- The mine’s processing capacity is expected to increase in December 2016 due to enhanced wash plant.
- Next ruby auction is expected to occur in December 2016 in Singapore.
- The September 2016 auction of higher quality rough amethysts held in Singapore generated revenues of US$0.4m and achieved the second highest average realised price of US$3.73 per carat; 11.6m carats were sold.
- Value of Fabergé sales orders agreed fell by 23% compared to Q1 2016, mainly due to the opening of two significant wholesale partners in July 2015.
- The number of sales transactions increased by 67% over Q1 2016.
- Average selling price per piece increased by 2%.
- Total operating costs fell by 1%.
- 10 November 2016 results for Grand Prix d’Horlogerie de Geneve will be announced, Fabergé currently has two watches which have qualified for the shortlist.
- Cash and cash equivalents US$24.1m and total debt outstanding US$49.4m as of 30 September 2016.
The company completed two new community projects in the quarter, a Chapula high school and the Nkana Health Clinic.