JSE-listed Gemfields on Thursday announced that it had completed the first tranche of the sale of its shares in ASX-listed Jupiter Mines.

The company on April 15 informed shareholders of its decision to sell its stake in Jupiter in two tranches. The second tranche is expected to be completed by November.

Gemfields has proposed paying a special dividend of $24.69-million to shareholders, representing a distribution of $0.0175 a share.

However, it plans to use a portion of those funds to fund a larger share buyback.

Gemfields earlier this month initiated a share buyback, as the company’s board and management believed the recent trading range of the company’s share price undervalued it.

The 30-day volume weighted average price per Gemfields share has fallen by about 11% from R1.77 on April 15 to R1.58 at the close of trading on June 26 and has recently traded as low as R1.27 on June 7.

During the last 12 months, the Gemfields share price had fallen by about 40%. Shareholder feedback had indicated a preference that greater emphasis be placed on a share buyback, particularly given the discount to the company’s net asset value.

Gemfields is authorised to repurchase about 143-million shares, representing about 10% of its shares in issue. Any repurchased shares will be cancelled.

Meanwhile, the gemstone producer on Wednesday also announced that it had received $2.3-million in payment from ZCCM Investment Holdings, which bought Gemfields’ 50% interest in Kariba Minerals, which owns an amethyst mine, in Zambia.

Gemfields sold its interest in Kariba Minerals to focus on emeralds, rubies and sapphires.

Gemfields is the operator and 75% owner of the Kagem emerald mine, in Zambia, and the Montepuez ruby mine, in Mozambique. It also holds controlling interests in various other gemstone mining and prospecting licences in Zambia, Mozambique, Ethiopia and Madagascar.