Gemstone miner Gemfields says it is unable to provide guidance as to when it might be able to host its next auction, or generate meaningful revenue from sales, with its financial results for the first half of this year, ended June 30, reflecting the "immense impact” of the Covid-19 pandemic and its related restrictions.
Covid-19 and its associated travel, quarantine and other restrictions have had an adverse effect on the JSE- and Aim-listed miner’s operations and its ability to host gemstone auctions.
Gemfields, which produces rubies and emeralds at its mines in Mozambique and Zambia, has only been able to host one auction so far this year, namely the February auction of commercial-quality emeralds in Lusaka, which yielded $11.4-million.
Auctions originally scheduled for May, June and August have been cancelled.
“We entered the pandemic with a strong balance sheet and have implemented measures to progressively reduce costs to the extent that the pandemic protracts, with monthly operating expenditure dropping significantly during the second quarter,” Gemfields CEO Sean Gilbertson states in a September 18 update to shareholders.
He adds that the miner continues to develop alternative gemstone selling mechanisms, but laments that these too are “considerably hampered” by widespread travel, quarantine and congregation restrictions.
While work on an online auction platform is nearing completion, Gilbertson says this approach will still require in-person viewings of the gemstones by clients, though this could potentially take place via “shuttle viewings” as an alternative in different cities.
He adds that Gemfields is also continuing to seek alternative cash sources, including additional debt and the sale of the miner’s 6.5% indirect stake in Sedibelo Platinum, which owns a platinum group metals asset in South Africa.