Coloured stones specialist Gemfields (LON:GEM) appears to have avoided the “challenges” seen in the diamond sector with all parts of the business recording a strong performance.
For the three months to December 31, which counts as Gemfields’ second quarter, output from the flagship Kagem mine was up strongly, while costs on a per carat basis fell significantly.
Production rose to 8.2mln carats of emerald and beryl, up from 5.8mln a year earlier, with the average grade rising to 272 carats from 190.
Total costs were U$11.3mln (a fall of US$300,000 compared with the same period last year), or US$1.38 per carat, down from US$2.
The November auction of stones in India generated revenues of US$19.2mln, or US$4.32 per carat. The next Kagem sale is in March.
Turning to rubies, which are mined from the Montepuez operation in Mozambique, the focus was on the higher quality alluvial resource during the period. While output was down recoveries of top notch stones shot up 1,825%.
An auction of medium-quality rough rubies brought in US$28.8mln at an average US$317.92 per carat.
Pleasing to Gemfields, led by Ian Harebottle and promoted by Mila Kunis, will have been the performance of the Fabergé business.
Sales orders rose 13%, while the gross profit margin grew to 49% from 31% in the comparable period 12 months ago.
“Fabergé has continued to reap the benefits of its successful watch campaign, launched in early 2015, and has delivered an increase in both unit sales and Total sales revenue during the quarter,” said chief executive Harebottle.
“The coloured gemstone sector also appears to have avoided many of the challenges being faced within the diamond and wider resource sector as we look forward to our upcoming higher quality emerald auction in March 2016."