Photo by: Reuters
JOHANNESBURG (miningweekly.com) – Subsidiaries of Aim-listed Gemfields increased their gemstone production by more than 40% in the three months ended December 31.
The company’s 75%-owned Kagem Mining subsidiary, in Zambia, produced 5.8-million carats of emerald and beryl during the second quarter of the 2015 financial year, compared with the 3.9-million carats produced in the December 2013 quarter.
Similarly, its 75%-owned Montepuez Ruby Mining subsidiary, in Mozambique, increased its ruby and corundum production to 3.4-million carats in the quarter under review, compared with the 2.3-million carats produced in the prior comparative quarter.
“With a clear focus on increasing the scale of operations across all divisions, including product design and brand positioning at Fabergé, as well as exploration and mining activity at both Kagem and Montepuez, quarterly gemstone production was up by more than 40% compared to the same quarter last year, providing Gemfields with another robust production quarter,” commented CEO Ian Harebottle.
The increased mining activity at both the Kagem and Montepuez mines had, however, led to higher operating costs.
Operating costs at Kagem increased to $11.6-million in the quarter under review, compared with $7.2-million in the December 2013 quarter, while operating costs at Montepuez rose to $5.7-million, compared with $2.3-million in the prior comparative quarter.
Gemfields pointed out that the Kagem openpit operations remained viable in light of robust emerald prices and that there was potential to further extend these operations, while plans were progressing to move to underground mining.
A trial underground mining project had been placed on care and maintenance during the quarter under review, with the results of the trial mining to be incorporated into the study of larger-scale underground operations and the development of a detailed underground mine plan.
Meanwhile, Gemfields said a November 2014 auction of higher-quality rough emerald and beryl had earned it revenue of $34.9-million. Its next auction of predominantly lower-quality emerald and beryl would be held at the end of February.
A December 2014 auction of higher-quality rubies earned Gemfields $43.3-million, and the next auction of predominantly lower-quality rubies and corundum would be held in India in March.
“The results of the two auctions held during the quarter – one of emeralds and one of rubies – demonstrated the ongoing firmness in global demand for coloured gemstones and associated jewellery. We remain upbeat about the growth and development of our sector and look forward to the results of our two forthcoming auctions and the various luxury events scheduled to take place over the next few months,” said Harebottle.