GEMFIELDS GROUP LIMITED — Regulatory Filings 2021

Apr 8, 2021

National Storage Mechanism | Additional information

RNS Number : 8836U

Gemfields Group Limited

08 April 2021

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")

Ruby Auction Results

LONDON, 8 APRIL 2021

Gemfields is pleased to announce the results of a ruby auction comprising a series of seven sequential mini-auctions held during the period 15 March - 8 April 2021. The auction contained a selection of grades that are typically offered at Montepuez Ruby Mining Limitada's ("MRM") auctions of mixed quality rubies. Selected lots were made available for in-person and private viewings by customers in Bangkok, Dubai and Jaipur. Following the viewings, the auctions took place via an online auction platform specifically adapted for Gemfields and which permitted customers from multiple jurisdictions to participate in a sealed-bid process.

Operations at MRM were suspended in April 2020 as a result of the Covid-19 pandemic and remained suspended until March 2021 in order to preserve cash during difficult market conditions. It is expected that mining operations at MRM will ramp back up to full-scale by the end of April 2021.

The rough rubies sold at the auction were all extracted, prior to April 2020, from the mining licence held and operated by MRM (which is 75% owned by Gemfields and 25% by local partner Mwiriti Limitada).

Highlights - March & April 2021 Ruby Auction

·    Operations at the MRM ruby mine were suspended from April 2020 to March 2021

·    All rubies sold at this auction were mined prior to April 2020

·    Total auction revenues of USD 58.9 million, the third highest auction result to date

·    Average price of USD 171.33 per carat

·    Of the 94 lots offered, 89 were sold (95%)

·    47% of the carats offered at the auction were sold

The auction saw 52 companies placing bids and generating total revenues of USD 58.9 million with an overall average value of USD 171.33 per carat. The auction saw 95% of the number of lots, and 47% of the offered carats, being sold.

The results of the five most recent mixed quality ruby auctions are summarised in the table below (and earlier results are available at www.gemfieldsgroup.com):

AUCTION RESULTS (RUBY & CORUNDUM)	Jun '18 AUCTION	Dec '18 AUCTION	Jun '19 AUCTION	Dec '19 AUCTION	Mar-Apr '21 AUCTION (7 sequential mini-auctions)
Dates	5-9 Jun 2018	10-14 Dec 2018	11-15 Jun 2019	10-14 Dec 2019	15 Mar - 8 Apr 2021
Location	Singapore	Singapore	Singapore	Singapore	Various/Online
Type	Rough Ruby (Higher, Medium and Commercial Quality), no Corundum	Rough Ruby (Higher, Medium and Commercial Quality), no Corundum	Rough Ruby (Higher, Medium and Commercial Quality), no Corundum	Rough Ruby (Higher, Medium and Commercial Quality), no Corundum	Rough Ruby (Higher, Medium and Commercial Quality), no Corundum
Carats offered	629,893	685,363	978,197	1,158,114	726,610
Carats sold	588,656	655,623	962,211	927,130	343,952
No. of lots offered	86	90	90	104	94
No. of lots sold	82	88	84	91	89
Percentage of lots sold	95%	98%	93%	88%	95%
Percentage of lots sold by weight	93%	96%	98%	80%	*47%
Total sales realised at auction	USD 71.8 million	USD 55.3 million	USD 50.0 million	USD 71.5 million	USD 58.9 million
Average per carat sales value	USD 122.03 /carat	USD 84.32/carat	USD 51.99/carat	USD 77.12/carat	USD 171.33/carat

(*) Specific attention is drawn to the fact that one lot of 76,343 grams (representing some 53% of the total weight offered) remained unsold at the most recent auction. As a result, the average price per carat realised at the most recent auction is considerably higher than it would have been had this lot also been sold. The specific auction mix and quality composition 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.

As a result of the Covid-19 pandemic, MRM realised no revenue in 2020. Nonetheless, no redundancies have been made at MRM since the outbreak of the pandemic and the circa 1,400 jobs provided by MRM have been protected during what is a critical time for the province of Cabo Delgado, where MRM is based. Today's ruby auction result provides much-needed income for the ongoing protection of those jobs and the many families that depend on the associated salaries. The auction also brings essential tax income for Mozambique at a time when the province of Cabo Delgado is in dire need of support. To date, approximately 23% of MRM's aggregate revenues have been paid to the Government of Mozambique in the form of mineral royalty and corporation tax. MRM has been the largest taxpayer in the Cabo Delgado province in each of the six years from 2014 to 2019.

MRM, located some 280km (as the crow flies) from the town of Palma, continues to closely monitor developments relating to the insurgency in Cabo Delgado. The insurgency has displaced an estimated 700,000 persons. MRM is liaising with the provincial and central governments about expanding the humanitarian relief MRM provides. MRM and Gemfields join all those affected by the insurgency in seeking the restoration of peace, safety and food security in the region.

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

"This auction, made up of seven sequential mini-auctions, has yielded the third highest revenue figure of the fourteen auctions which MRM has run since June 2014. We are very encouraged by the strong appetite from our clients and by the prices realised.

As a result of the fall-out from the Covid-19 pandemic, this auction was also our first since December 2019, meaning we realised no sales at all for some 15 months. Because operations were suspended at MRM in April 2020, the world's largest ruby mine produced no new rubies for almost a year, with mining only now recommencing. Due to the arising supply and demand dynamics, a number of our clients have therefore seen this auction as a vital opportunity to purchase rubies, particularly given that MRM is only now commencing mining for its next mixed-quality ruby auction, which we hope will occur late this year.

We're truly delighted to be back in business after the lengthy pause in both mining and sales and we extend our heartfelt thanks to our hard-working teams, our host government and our clients for their ongoing support."

-ENDS-

Further information on Gemfields Group Limited can be found at:

GEMFIELDSGROUP.COM

To join our investor mailing list, contact us on:

companysecretary@gemfields.com

For any press enquiries please contact us on:

gemfields@camarco.co.uk

ENQUIRIES

GEMFIELDS	Sean Gilbertson / David Lovett / Mark Lawrie T:  +44(0) 20 7518 3400
SPONSOR (JSE)	Investec Bank Limited
SEDIBELO SALE PROCESS	Liberum Nehal Patel T: +44(0) 20 3100 2222
NOMINATED ADVISER (AIM) & JOINT BROKER	finnCap Christopher Raggett / Tim Redfern / Edward Whiley T: +44(0) 20 7220 0500
JOINT BROKER	Liberum Clayton Bush / Scott Mathieson / Kane Collings T: +44(0) 20 3100 2222
FINANCIAL PR/ IR	Camarco Gordon Poole / Nick Hennis T: +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.

GEMFIELDS

GEMFIELDS.COM | INVESTORS |FOUNDATION

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FABERGÉ

FABERGÉ.COM | INSTAGRAM | FACEBOOK | TWITTER | YOUTUBE

KAGEM MINING LINKEDIN

MONTEPUEZ RUBY MINING LINKEDIN

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