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Gemfields plc
(“Gemfields” or the “Company” or the “Group”) (AIM: GEM)
Dubai, UAE, September 27, 2016: Financial Highlights - Revenue of US$193.1 million (2015: US$171.4 million);
- EBITDA(a) of US$69.4 million (2015: US$64.4 million);
- Profit after tax of US$23.5 million (2015: US$12.3 million);
- Cash at bank of US$41.5 million as at 30 June 2016 (2015: US$28.0 million); and
- Cost of gemstone and Fabergé inventory of US$107.2 million (2015: US$101.1 million).
Operational Highlights
Emeralds - Kagem (75% owned) - Production of rough emerald and beryl maintained at 30.0 million carats (2015: 30.1 million carats);
- Average grade, inclusive of ore from bulk sampling pits, of 241 carats per tonne (2015: 242 carats per tonne);
- Revenue of US$101.2 million with record US$70.68 per carat price achieved at higher quality auction;
- Unit operating costs(b) up from US$1.48 per carat to US$1.58 per carat;
- Cash rock handling unit costs(c) of US$2.48 per tonne (2015: US$2.90 per tonne);
- Continued focus on safety management, awarded the Green Award for exemplary environmental management; and
- Updated Competent Persons Report (“CPR”) (on a 100% attributable basis):
- Measured, Indicated and Inferred Mineral Resource of 1.8 billion carats of emerald and beryl at an in-situ grade of 281 carats per tonne;
- Proven and Probable Ore Reserves of 1.1 billion carats of rough emerald and beryl at a diluted ore grade of 291 carats per tonne;
- 25-year Life of Mine (“LoM”) open pit operations; and
- Net Present Value (“NPV”) of US$520 million (based on a 10% discount rate), based on the previous tax regime.
Rubies - Montepuez (75% owned) - Continued production growth of rough ruby and corundum of 10.3 million carats (2015: 8.4 million carats);
- Higher grade achieved of 35 carats per tonne (2015: 26 carats per tonne);
- Revenue of US$73.1 million, with an average price of US$45.50 per carat;
- 68% increase in higher quality rough rubies recovered;
- Marginally lower unit operating costs(b) at US$2.54 per carat compared with US$2.57 per carat
- Cash rock handling unit costs(c) of US$6.06 per tonne (2015: US$6.16 per tonne); and
- Maiden JORC Resource and Reserve Statement in July 2015 by SRK (on a 100% attributable basis):
- Total Indicated and Inferred Mineral Resource of 467 million carats;
- Probable Ore Reserves of 432 million carats;
- Projected 21-year LoM; and
- NPV of US$996 million (based on a 10% discount rate).
Fabergé (100%) - Continued recognition of quality and improving brand recognition:
- Won the ‘Ladies Hi-Mechanical’ category at the prestigious Grand Prix d’Horlogerie de Genève ('GPHG') awards in October 2015, the Swiss watchmaking industry’s highest honour, for its ‘Lady Compliquée Peacock’ timepiece;
- The ‘Lady Peacock Emerald’ variant of the timepiece also won the ‘Ladies Complication’ award at Watchfair Luxembourg in June, 2016; and
- The highly acclaimed Fabergé Visionnaire DTZ men’s watch qualified as an entrant for the GPHG 2016 awards.
- Increased revenue by 33% as Fabergé continued to expand its global presence and increased the number of agreements with multi-brand retail partners; and
- Improved level of consumer awareness and demand, the number of units sold and delivered increasing by 81%.
New projects - Emeralds, Ethiopia - A diamond drilling crew was mobilised at Dogogo South Block, Ethiopia, in June 2016 and drilling commenced in July 2016;
- Sapphires, Sri Lanka - Trading centres established in Colombo and Ratnapura; and
- Emeralds, Colombia - Gemfields expanded the size of its operating team and in-country footprint with further groundwork being undertaken.
Marketing - Continued high-profile marketing projects including new partnerships with Bergdorf Goodman and High Jewellery designer collaborations with Chopard, Georg Jensen and VanLeles; and
- Launched new integrated global ruby marketing campaign. The campaign includes a triptych of films featuring upand-coming global female talent from around the world which has been received to wide acclaim.
(a) EBITDA - Earnings before interest, tax, depreciation, amortisation and impairment.
(b) Unit operating costs are calculated as total operating costs divided by the total gemstone production during the period. Total operating costs include mining
and production costs, selling, general and administrative expenses, depreciation and amortisation, but exclude capitalised costs and mineral royalties.
(c) Cash rock handling unit costs are calculated as total cash operating costs divided by the total rock handling during the period. Cash operating costs include
mining and production costs, capitalised costs, selling, general and administrative expenses, and exclude PPE-related capital expenditure, depreciation,
amortisation and mineral royalties.
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