Gemfields' earnings impacted by limited auctions, lower output in 2020
London-listed Gemfields has advised in a market update that its 75%-owned Montepuez ruby mine, in Mozambique, produced 1.2-million carats in 2020, while its 75%-owned Kagem emerald mine, in Zambia, produced 9.3-million carats.
Gemfields had to suspend much of its mining and processing activity as of March 30, 2020, and throughout the year, as a result of Covid-19 restrictions and impacts.
The Kagem mine had produced 42-million carats in 2019, while the Montepuez mine had produced 2.2-million carats in 2019.
The number of pieces sold through Gemfields’ luxury brand Fabergé declined to 1 686 in 2020, compared with 2 324 pieces sold in 2019.
As at December 31, Gemfields had cash and cash equivalents on hand of $43.9-million, while it had net debt of $12.6-million.
The net debt position excludes the outstanding balance of auction receivables of $8.9-million as at December 31.
The company derived Kagem emerald auction revenue of $22.4-million in total, while no ruby auctions were held.
This compares to auction revenue of $200-million generated in 2019.
Gemfields had hosted a series of five small and sequential emerald auctions in November and December last year to address market demand for specific grades.
Gemfields' typical auction schedule includes five to six auctions a year – two for mixed-quality rubies and three to four for emeralds (split between higher quality and commercial quality).
The miner on November 10 reiterated that its auctions schedule for the year had been severely impacted on by the many travel, quarantine and congregating restrictions put in place to mitigate Covid-19 contagion.
Gemfields hoped that mining operations would resume by March this year, subject to market conditions and Covid-19 developments.
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