Germfields Raises Record Of US $31.5M In Lusaka Emerald Auction

Results – Lusaka Rough Emerald and Beryl Auction

22 July 2013

Gemfields plc (AIM: GEM) is pleased to announce the results of its auction of predominantly higher quality rough emerald and beryl held in Lusaka from 15 July to 19 July 2013.

Highlights

• Auction revenues of USD 31.5 million, the second highest achieved to date;
• Average per carat price of USD 54.00 per carat – a new auction record;
• All of the 583,448 carats placed on offer were sold;
• An exceptional 54 carat rough gem achieves a new per carat record for a Gemfields auction;
• Upbeat market conditions underpinned robust increases in quality-for-quality per carat prices; and
• Thirteen auctions held since July 2009 have generated USD 207.3 million in total revenues.

A total of 40 companies were invited to the auction held in Lusaka and 37 attended, with 36 attendees placing at least one bid. This auction, the first of the current financial year (which ends 30 June 2014), was held in Lusaka, Zambia at the request of the Zambian Ministry of Mines, Energy and Water Development. The auction saw 583,448 carats of emerald extracted from the Kagem Mine in Zambia placed on offer, with all lots offered being sold, generating auction revenues of USD 31.5 million. The Company’s thirteen auctions held since July 2009 have generated USD 207.3 million in aggregate revenues.

The Lusaka auction yielded an overall average value of USD 54.00 per carat, the highest unit value achieved at any auction. This represents a 26 per cent increase over the previous highest value of USD 42.71 per carat (achieved in the July 2011 Singapore auction). In addition, an exceptional 54 carat rough gem, offered as a single lot at the auction, set a new per carat record for prices achieved at a Gemfields auction.

The results of the eight higher quality auctions held to date are summarised below:

The specific auction mix and the exact quality of the lots offered at each auction vary in characteristics such as size, colour and clarity on account of mined production and market demand. Each auction is thus made up of somewhat differing overall quality compositions.

For ease of reference, the results of the five lower quality rough emerald auctions held to date are summarised below:

          * A larger volume of material was placed on offer in March 2010 following Gemfields extensive inventory building exercise during 2008 and 2009.

Ian Harebottle, CEO of Gemfields, commented:

“Favourable market conditions and particularly strong demand from our customers have yielded excellent auction results and record per carat prices. All indications show that demand for coloured gemstones, and especially emeralds, will continue to increase at a steady pace over the coming year.

We are delighted that this auction underscores Lusaka as a key hub in the international emerald trade and we would like to thank the Zambian Government for their support.  

Our focus must now be directed at keeping the current momentum going and on developing Zambian emeralds as the favoured choice. Our investments and efforts in marketing Zambian emeralds worldwide are clearly working. The key is for Zambia to be seen as the most competitive, reliable and trusted source of ethically produced gemstones. Transparency and accountability are crucial to underpinning the integrity of the industry and to establishing Zambian emeralds as the preferred emerald brand among global consumers”.