Gemfields has released a trading update ahead of its interim results on September 26, with chief executive Sean Gilbertson indicating that multiple transient challenges led to short-term cash flow issues for the six months ended June 30.
The company's key assets, Montepuez Ruby Mining (MRM) in Mozambique and Kagem in Zambia, generated revenues of $38.9 million and $21.1 million, respectively.
Total auction revenues for the period were $60 million, a figure significantly lower than the same period in 2024.
This decline was attributed to fewer premium rubies being available from MRM, the now-revoked 15% export duty on emeralds in Zambia, and the suspension of mining at Kagem.
As a result of the lower auction revenues, Gemfields expects to report a net loss after tax of $4.6 million for the period, a sharp contrast to the $13.7 million net profit reported for the same period last year.
The company said that disciplined cost control helped limit the financial impact.
"Gemstone production proved challenging throughout the period at both mines operated by Gemfields, with Montepuez Ruby Mining (MRM) experiencing a decrease in the production of premium rubies, and Kagem Mining having halted mining operations at the end of 2024 and operating only the wash plant until May this year, when two focused emerald production points were re-opened,” said Gilbertson.
To improve liquidity, Gemfields completed a fully underwritten $30 million rights issue on June 13.
Furthermore, after the period ended, the group sold its entire stake in luxury brand Fabergé for $50 million, with $44.7 million received upfront and the remainder to be paid via future royalty payments.
“Gemfields has simplified its business, removed costs and is focused on securing profitability across the group, enhanced by the exciting prospect of increased ruby production courtesy of the second processing plant at MRM,” said Gilbertson.
Mathew Nyaungwa, Editor-In-Chief, Rough & Polished
