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Gemfields releases updated ‘G-Factor for Natural Resources’
GEMFIELDS GROUP LIMITED
Incorporated in Guernsey. Guernsey registration Number: 47656.
South African external company registration number 2009/012636/10
Share code on JSE:GML / AIM:GEM
ISIN: GG00BG0KTL52 | LEI: 21380017GAVXTCYS5R31
("Gemfields" or the "Company")
Gemfields releases updated ‘G-Factor for Natural Resources’
LONDON, 15 FEBRUARY 2023
In July 2021, Gemfields announced the ‘G-Factor for Natural Resources’, a measure promoting greater
transparency regarding the level of natural resource wealth shared with the governments of host
countries, whether from the mining, oil, gas, timber or fishing sectors.
Today, Gemfields announces updated figures to the end of December 2022 and invites governance
bodies, mining organisations, industry observers and host governments to adopt the G-Factor for
Natural Resources in order to improve transparency when it comes to the share of natural resource
wealth paid to a host country’s government.
The G-Factor for Natural Resources is intended to be an uncomplicated indicator of the percentage
of a natural resource company’s revenue that is paid to the host country government in primary
and direct taxes, plus - where the host government is a shareholder - dividends. As such, it is an
indicator of the share of natural resource wealth paid to a host country’s government. The G-
Factor for Natural Resources takes its name from the “g’s” in “government”, “governance” and
“good practice”.
“Given the evolution of resource nationalism on the one hand, and increasing strategic competition by companies and
states for access to resources on the other, it seems to us that a practical measure allowing more direct comparison of
the sharing of natural resource wealth would assist greatly in identifying responsible custodians of host nations’
resources. We hope the G-Factor for Natural Resources will be voluntarily adopted by other companies, insisted
upon by host governments and incorporated into projects such as EITI” said Sean Gilbertson, Gemfields
CEO.
G-Factor for Natural Resources computations for Gemfields’ two key mining subsidiaries (the Kagem
emerald mine in Zambia and the Montepuez ruby mine in Mozambique) are set out below:
Montepuez Ruby Mining G-Factor G-Factor G-Factor G-Factor
Limitada (Mozambique), USD (1 Year) (5 Years) (10 Years) (since
million 2022 2018-2022 2013-2022 Gemfields
acquired 75%)
2011-2022
(A) Mineral Royalties Paid 18.6 50.5 84.7 84.7
(B) Corporation Tax Paid 25.9 74.0 119.5 119.5
(C) Dividends to Government (if n/a n/a n/a n/a
applicable)
(D) Total Revenue 166.7 562.7 903.0 903.0
G-Factor, being (A+B+C)/D 27% 22% 23% 23%
NOTES: Mineral royalties in Mining commenced Mining commenced
Revenue excludes other income and respect of the 2012. 2012.
revenue generated from other sources. December 2022
auction were paid in Sales commenced Sales commenced
All figures for 2022 are unaudited. January 2023 and 2014. 2014.
are thus excluded
from the above.
Corporation tax
arising on FY22
profits will also only
be paid in 2023 and
are thus excluded
from the above.
Kagem Mining Limited G-Factor G-Factor G-Factor G-Factor
(Zambia), USD million (1 Year) (5 Years) (10 Years) (since
2022 2018-2022 2013-2022 Gemfields
acquired 75%)
2008-2022
(A) Mineral Royalties Paid 11.5 25.3 50.9 56.4
(B) Corporation Tax Paid 13.3 25.0 72.4 81.5
(C) Dividends to Government (if 1.5 1.5 14.0 14.0
applicable)
(D) Total Revenue 153.3 421.3 726.3 872.3
G-Factor, being (A+B+C)/D 17% 12% 19% 17%
NOTES: Gemfields acquired a
All figures for 2022 are unaudited. 75% interest in
Kagem in 2008.
The ‘G-Factor for Natural Resources’
The G-Factor for Natural Resources would typically be calculated by each standalone company
engaged primarily in the extraction and sale of natural resources, whether in the mining, oil,
gas, timber or fishing sectors. Accordingly, multi-national natural resource companies would
publish the G-Factor for Natural Resources for each operating subsidiary engaged primarily in the
extraction and sale of natural resources.
The G-Factor for Natural Resources is expressed as a percentage and is calculated as:
Ap + Bp + Cp
Dp
where:
- A = the total mineral royalty (tax on revenue) paid by the reporting company to the host
country government during the period
- B = the total corporation tax (tax on profit) paid reporting company to the host country
government during the period
- C = the dividends paid by the reporting company to the host country government during
the period (where the host country government is a shareholder in the reporting company)
- D = the total revenues of the reporting company during the period
- p = the relevant period, typically calculated for each of (i) the prior year; (ii) the preceding
5 years and (iii) the preceding 10 years
- The sums actually paid during the period (rather than the sums accrued or falling due
during the period) are used for the purposes of A, B and C.
No measure of this type is perfect and it is recognised that:
a. the G-Factor for Natural Resources is a “rule-of-thumb” – while it has broad application and
is a practical indicator, it is not suited to every situation;
b. there are numerous additional and indirect taxes which are not included in the G-Factor for
Natural Resources and which further increase the contribution made to host nations by
natural resource companies. Such taxes include but are not limited to area/surface charges,
social security contributions, taxation on the salaries of employees, import and export
duties, VAT, etc; and
c. the variety and variations in natural resource deposits, types and occurrences lessens the
ability to make direct comparisons between companies.
Further information on Gemfields Group Limited can be found at:
GEMFIELDSGROUP.COM
To join our investor mailing list, contact us on:
ir@gemfields.com
For any press enquiries please contact us on:
gemfields@camarco.co.uk
This announcement contains inside information for the purposes of Article 7 of the Market Abuse
Regulation (EU) no. 596/2014 which forms part of domestic UK law pursuant to the European Union
(withdrawal) act 2018 ("MAR").
ENQUIRIES
GEMFIELDS Sean Gilbertson / David Lovett / Ian Hughes
T: +44(0) 20 7518 3400
SPONSOR (JSE) Investec Bank Limited
NOMINATED ADVISER finnCap
(AIM) & JOINT BROKER
Christopher Raggett / Tim Redfern / Edward Whiley
T: +44(0) 20 7220 0500
JOINT BROKER Liberum
Scott Mathieson / Kane Collings
T: +44(0) 20 3100 2222
FINANCIAL PR/ IR Camarco
Gordon Poole / Emily Hall
T: +44(0) 20 3757 4980
ADDITIONAL INFORMATION ON GEMFIELDS
Gemfields is a world-leading miner and marketer of responsibly sourced coloured gemstones.
Gemfields is the operator and 75% owner of both the Kagem emerald mine in Zambia (believed
to be the world’s single largest producing emerald mine) and the Montepuez ruby mine in
Mozambique (one of the most significant recently discovered ruby deposits in the world). In
addition, Gemfields also holds controlling interests in various other gemstone mining and
prospecting licenses in Zambia, Mozambique, Ethiopia and Madagascar.
Gemfields’ outright ownership of Fabergé - an iconic and prestigious brand of exceptional heritage
- enables Gemfields to optimise positioning, perception and consumer awareness of coloured
gemstones, advancing the wider group’s “mine and market” vision.
Gemfields has developed a proprietary grading system and a pioneering auction and trading
platform to provide a consistent supply of coloured gemstones to downstream markets, a key
component of Gemfields’ business model and has played an important role in the growth of the
global coloured gemstone sector.
GEMFIELDS
GEMFIELDS.COM | INVESTORS |FOUNDATION
INSTAGRAM | FACEBOOK | TWITTER | YOUTUBE
FABERGÉ
FABERGÉ.COM | INSTAGRAM | FACEBOOK | TWITTER | YOUTUBE
KAGEM MINING LINKEDIN
MONTEPUEZ RUBY MINING LINKEDIN
Date: 15-02-2023 09:00:00
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