JOHANNESBURG (miningweekly.com) – Aim-listed Gemfields sold 6.3-million carats of predominantly lower quality rough emeralds and beryl extracted from its Zambia-based Kagem mine, last week, generating $15.2-million in revenue.
The auction was the second of the current financial year, which ends on June 30, and was held at the request of the Zambian Ministry of Mines, Energy and Water Development. Twenty-five companies attended the auction.
Gemfields had put 17.3-million carats on auction, with only 36% sold.
In line with its strategy, Gemfields did not sell lots where the bids received did not satisfy its predetermined minimum reserve prices, which resulted in five lots that represented 64% of the weight offered remaining unsold.
The lots sold yielded an overall average of $2.42/ct, 7% lower than that achieved at the previous lower quality emerald auction held in June 2012, in Jaipur, India.
Gemfields noted that the latest auction saw the first reversal of the historic growth trajectory in lower-quality auction prices, despite the overall quality characteristics and product mix of the gems placed on offer being substantively similar to that of the earlier auction.
“This reduction may have been due to a number of declined auction invitations, which was higher than [for] prior auctions, most notably due to the travel demands placed on clients in reaching Lusaka, typically involving three flights and approaching 24 hours of journey time,” the miner noted.
"Taking into account the prevailing uncertainty surrounding Gemfields' future ability to freely sell emeralds outside of Zambia, the company is generally satisfied with the results of its Lusaka auction. The results were reasonable but probably not as optimal as they could have been,” CEO Ian Harebottle said.
He added that good sales of higher quality rough emeralds at previous auctions indicated that the general global economic uncertainty had not had a significant impact on demand for medium to better quality emeralds and beryl.
“Clarity and stability within our operating environment will no doubt also have a positive impact in the longer term and on the peace of mind of our customers. Confidence in the secure, reliable and convenient supply of our gemstones is a critical ingredient. We will naturally continue to engage all relevant stakeholders within Zambia and abroad in an effort to seek resolution of the prevailing situation in the best interests of the Zambian emerald sector as a whole," Harebottle assured shareholders.
In total, the company's twelve auctions held since July 2009 have generated $175.7-million in aggregate revenues.