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GEMFIELDS GROUP LIMITED - Lusaka Emerald auction results

Release Date: 24/02/2020 09:00
Code(s): GML     PDF:  
 
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Lusaka Emerald auction results

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 / BSX:GML.BH
ISIN: GG00BG0KTL52      LEI: 21380017GAVXTCYS5R31
("Gemfields" or the "Company")

24 February 2020


Lusaka Emerald Auction Results


Gemfields is pleased to announce the result of an auction of predominantly commercial quality rough emerald held
in Lusaka, Zambia from 18-21 February 2020. The emeralds were extracted by Kagem Mining Ltd in Zambia (“Kagem”,
which is 75% owned by Gemfields and 25% by the Industrial Development Corporation of Zambia). The proceeds of
this auction will be fully repatriated to Kagem in Zambia, with all royalties due to the Government of the Republic of
Zambia being paid on the full sales prices achieved at the auction.

      Highlights – Emerald Auction

           •    Auction revenues of USD 11.5 million
           •    Of the 25 lots offered, 19 were sold (76%)
           •    Average price of USD 4.01 per carat
           •    64% of the carats offered were sold
           •    The 35 auctions of Kagem gemstones held since July 2009 have generated USD 647 million in total revenues

The auction saw 29 companies placing bids, generating total revenues of USD 11.5 million with an overall average
value of USD 4.01 per carat. The auction saw 64% of the offered carats being sold (or 76% of the number of lots
offered).

Gemfields’ 35 auctions of emeralds and beryl mined at Kagem since July 2009 have generated USD 647 million in
total revenues. The results of the five most recent commercial quality Kagem auctions are summarised in the table
below:


        AUCTION RESULTS                      Feb ‘18             Jul-Aug ‘18            Feb ‘19               Aug ‘19              Feb ‘20
     (COMMERCIAL QUALITY)                   AUCTION               AUCTION              AUCTION               AUCTION              AUCTION

                                           19-22 Feb           30 Jul – 2 Aug         18-20 Feb             19-22 Aug             18-21 Feb
Dates                                         2018                 2018                 2019                  2019                  2020
Location                                  Jaipur, India       Lusaka, Zambia       Lusaka, Zambia        Lusaka, Zambia        Lusaka, Zambia
                                          Commercial            Commercial           Commercial            Commercial            Commercial
Type                                         Quality              Quality              Quality               Quality               Quality
Carats offered                            3.73 million          2.89 million         4.15 million        10.68 million (*)       4.49 million
Carats sold                               3.55 million          2.59 million         2.46 million          3.92 million          2.86 million
No. of companies placing bids                  31                    22                   24                    34                   29
Average no. of bids per lot                     5                     6                    5                     6                    6
No. of lots offered                            21                    21                   23                    35                   25
No. of lots sold                               19                    17                   16                    26                   19
Percentage of lots sold                       90%                   81%                  70%                   74%                  76%
Percentage of lots sold by weight             95%                   90%                  59%                 37% (*)                64%
Total sales realised at auction         USD 10.8 million      USD 10.9 million     USD 10.8 million      USD 18.6 million      USD 11.5 million
Average per carat sales value           USD 3.05/carat        USD 4.21/carat       USD 4.39/carat        USD 4.75/carat        USD 4.01/carat
      (*) Unlike the other auctions tabulated above, August 2019 included beryl. The single lot of beryl (of 5 million carats) was unsold.
The specific auction mix and the quality of the lots offered at each auction vary in characteristics such as size, colour
and clarity on account of variations in mined production and market demand. Therefore the results of each auction
are not always directly comparable.

Adrian Banks, Gemfields’ Managing Director of Product & Sales, commented:

“The results of our first auction of 2020 are in line with prior auctions of commercial quality emeralds and demonstrate
a stable underlying market. It was however evident that the fallout of COVID-19 - the corona virus - dampened what
might otherwise have been a buoyant result. Firstly, the uncertainty surrounding Chinese consumer demand in the
wake of COVID-19 has understandably created negative sentiment in the mid-stream market. Secondly, a handful of
our key auction customers did not travel to Lusaka as a result of the increased risk associated with COVD-19 and
thirdly, the Hong Kong market – important for both gemstones and jewellery - has had to endure multiple successive
misfortunes”.

Further information on Gemfields Group Limited can be found at www.gemfieldsgroup.com
To join our press release mailing list, click here: gemfields@gemfields.com
For any press enquiries please contact us on gemfields@camarco.co.uk

Enquiries:

 Gemfields                                                   Nominated Adviser and Broker (AIM)
 Sean Gilbertson / David Lovett / Mark Lawrie                finnCap
 Tel: +44(0) 20 7518 3400                                    Scott Mathieson / Edward Whiley
                                                             Tel: +44(0) 20 7220 0500

 Sponsor (JSE)                                               IR / Financial PR
 Investec Bank Limited                                       Camarco
                                                             Gordon Poole / Jennifer Renwick / Nick Hennis
                                                             Tel: +44(0) 20 3757 4980

Additional information on Gemfields

Gemfields is a world leading supplier 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.

Date: 24-02-2020 09:00:00
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