JOHANNESBURG (miningweekly.com) – Gemfields’ 75%-owned Kagem emerald mine, in Zambia, tightened emerald output in the quarter ended June 30, yielding 6.3-million carats, compared with 8.9-million carats recovered in the comparable quarter of the previous year.

Similarly, the average grade of 271 ct/t of ore was a narrowing of the 322 ct/t in the June 2013 quarter, while unit production costs rose from $0.50/ct to $0.75/ct over the same period.

The quarter under review saw some 2.5-million tons of rock moved at handling costs of $3.31/t  – an improvement on cash costs of $3.60/t in the corresponding quarter of the prior year.

Gemfields added that the high-wall pushback programme had been extended into its fourth phase, targeting a further 75 m in the mine and had, thus far, resulted in the movement of 2.5-million tons of waste.

Kagem’s trial underground mining project achieved 23 m of horizontal advance and delivered 68 740 ct over the quarter.

“Illegal mining activity within the boundaries of the Kagem mining licence is not yet fully resolved and Gemfields continues to work with key Ministries to alleviate this challenge,” the company noted.

EMERALD AUCTION
The company’s May auction of traded rough emeralds – those not obtained directly from the company's own mining operations – held in Jaipur, India, saw 268 000 ct sold, representing 86% of the value offered, and generating revenues of $13.5-million.

The auction yielded an overall average of $50/ct.

MONTEPUEZ RUBIES
Bulk sampling operations at the Montepuez ruby project, in Mozambique, in which Gemfields had a 75% interest, continued to scale up progressively and with “consistently encouraging” results.

The requisite core infrastructure was largely in place and would accommodate a smooth transition to formalised mining once bulk sampling and permitting was completed.

Improvements continued to be made to the pilot semi-mobile ore processing plant, improving efficiencies and the understanding of the ore characteristics.

“These improvements saw a six-fold increase in processed tons when compared with the same quarter in the prior year,” the company noted.

Some 200 000 ct of ruby and corundum were extracted during the quarter as part of the ongoing bulk sampling operation, compared with 1.1-million carats in the June 2013 quarter.

“While the number of carats extracted was markedly lower, the quality of rubies was markedly higher. This takes the total ruby and corundum extracted at Montepuez since the start of bulk sampling to 8.4-million carats,” Gemfields said.

Total rock handling stood at 542 919 t, of which 99 940 t were ore and 442 979 t waste.

Total cash operating costs during the quarter amounted to $3.1-million.

“Given the size and nature of the Montepuez ruby licence, illegal mining activity and theft remain key challenges, although new infrastructure, a significant security presence and ongoing efforts have resulted in a clear improvement,” said the company.

Gemfields' “first-of-a-kind” comprehensive grading and sorting framework for rough rubies was, meanwhile, well received at the inaugural auction in Singapore.

Various downstream ruby and corundum enhancement processes continued to be investigated, with encouraging results observed at the Singapore auction in June.

RUBY AUCTION
Gemfields' inaugural ruby auction saw 1.82-million carats being sold, representing 90% by weight, and generating revenues of $33.5-million at average realised value of $18.43/ct.

Gemfields' next auction of rough ruby and corundum was scheduled to take place before end of the year.

CEO Ian Harebottle said in a statement on Thursday that this auction represented a profound shift in the ruby industry and underscored the prospects of Gemfields’ model and vision for the coloured gemstone sector.

“We are excited by the potential for our ruby auctions to follow the progress we have seen in our emerald auctions.   

"We continue to see marked enthusiasm from the trade, retailers and most importantly, consumers, for responsibly supplied coloured gemstones. Our marketing efforts continue to underscore our vision and we look forward to the results of this week's auction of rough emeralds  in Lusaka, Zambia,” he commented.

At the end of June, Gemfields had cash and cash equivalents of $36.7-million.