Gemfields Group Limited (AIM:GEM) has reported encouraging signs from a mini auction of rough rubies, raising $7.2 million and attracting strong attendance and demand, according to analysts at Panmure Liberum.
The update comes just a week after Gemfields outlined plans for a $30 million rights issue to strengthen its balance sheet. Its two largest shareholders have already provided around $13.4 million in interim funding to support the business while the offer goes ahead.
Despite efforts to cut costs, with total costs of goods sold expected to fall to $130 million in 2025 from $172 million this year, Gemfields is pressing ahead with expanding its Montepuez Ruby Mine processing plant in Mozambique.
The project, which is expected to triple processing capacity, is on schedule to complete by the end of June.
Panmure Liberum kept its Buy rating but lowered its target price to 15p from 20p to reflect dilution and model tweaks.
The shares were down 1.2% at 4.2p.