GEMFIELDS GROUP LIMITED — Regulatory Filings 2021

Apr 19, 2021

National Storage Mechanism | Additional information

RNS Number : 8101V

Gemfields Group Limited

19 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")

Emerald Auction Results

LONDON, 19 APRIL 2021

Gemfields is pleased to announce the results of an emerald auction comprising a series of five sequential mini-auctions held during the period 15 March - 17 April 2021. The auction contained a selection of grades that are typically offered at Kagem Mining Ltd's ("Kagem") auctions of higher quality emeralds. Selected lots were made available for in-person and private viewings by customers in Tel Aviv, 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 Kagem were suspended in March 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 Kagem will ramp back up to full scale by the end of April 2021.

The rough emeralds sold at the auction were all extracted, prior to March 2020, from the mining licence held and operated by 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 - March & April 2021 Emerald Auction

·    Operations at the Kagem emerald mine were suspended from March 2020 to March 2021

·    All emeralds sold at this auction were mined prior to March 2020

·    Total auction revenues of USD 31.4 million

·    Average price of USD 115.59 per carat

·    Of the 37 lots offered, 36 were sold (97%)

·    99% of the carats offered at the auction were sold

The auction saw 59 companies placing bids and generating total revenues of USD 31.4 million with an overall average value of USD 115.59 per carat. The auction saw 97% of the number of lots, and 99% of the offered carats, being sold. Gemfields' 37 auctions of emeralds and beryl mined at Kagem since July 2009 have generated USD 688.8 million in total revenues.

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

AUCTION RESULTS (HIGHER QUALITY)	Nov '18 AUCTION	May '19 AUCTION	Nov '19 AUCTION	Nov-Dec '20 AUCTION (5 sequential mini-auctions)	Mar-Apr '21 AUCTION (5 sequential mini-auctions)
Dates	14-17 Nov 2018	14-17 May 2019	18-21 Nov 2019	2 Nov - 11 Dec 2020	15 Mar - 17 Apr 2021
Location	Singapore	Singapore	Singapore	Various/ Online	Various/ Online
Type	Higher Quality	Higher Quality	Higher Quality	Higher Quality	Higher Quality
Carats offered	0.57 million	0.43 million	0.36 million	0.23 million	0.273 million
Carats sold	0.42 million	0.31 million	0.32 million	0.18 million	0.271 million
No. of companies placing bids	40	45	48	47	59
Average no. of bids per lot	8	8	9	11	18
No. of lots offered	26	35	38	28	37
No. of lots sold	20	28	33	24	36
Percentage of lots sold	77%	80%	87%	86%	97%
Percentage of lots sold by weight	74%	72%	88%	80%	99%
Total sales realised at auction	USD 28.4 million	USD 22.4 million	USD 27.2 million	USD 10.9 million	USD 31.4 million
Average per carat sales value	USD 68.03/carat	USD 71.85/carat	USD 85.26/carat	USD 59.84 / carat	USD 115.59 / carat

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.

Prices achieved during the series of mini-auctions held in November and December 2020 were robust and in a number of instances comfortably exceeded bids received in pre-Covid-19 auctions. Some of the finer qualities of emerald were not offered at the November and December 2020 sales and this resulted in a slightly lower average price per carat for that auction series. By contrast, the March and April 2021 sales did include the finer qualities of emerald that were not offered in the November and December 2020 sales and this has contributed to the increased price per carat achieved in the most recent auction series. Combining the results from the November-December 2020 sales with those from the March-April 2021 sales provides a more balanced view, with an average sales price of USD 93.21 per carat, an all-time high.

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

"This was Kagem's highest auction revenue since March 2016 and we were very pleased to see such strong demand and pricing. Because operations were suspended at Kagem in March 2020, the world's largest emerald mine produced no new emeralds for more than a year. Due to the arising supply and demand dynamics, a number of our clients have therefore seen this auction as a vital opportunity to purchase emeralds. Today's result also means that Kagem has already surpassed the aggregate auction revenues achieved in the whole of 2020, which stood at just USD 22.4 million as a result of the fall-out from the Covid-19 pandemic.

When combined with the ruby auction results announced on 8 April 2021, Gemfields' aggregate auction revenue for 2021 to date stands at USD 90.3 million, a very satisfactory position from which to approach the rest of the year.

Gemfields is excited to be back in business after the lengthy pause in both mining and sales and - as always - we extend our sincere thanks to our hard-working teams, to our host governments in Mozambique and Zambia, and to our customers 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 LawrieT:  +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 HennisT: +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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