Gemfields (LON:GEM) has plenty of upside according to broker finnCap, which sees a number of factors driving coloured gems specialist forward. “At the operating level, the company is doing well.” Emerald and beryl production last year rose to 30.1mln carats from 20.2mln while ruby output rose to 8.4 mln carats from 6.4mln. Both the Kagem emerald mine in Zambia and the Montepuez ruby mine in Mozambique also have scope to expand further. The two mines have independent reserve estimates and finnCap reckons both operations will be able to operate for at least the next two decades and beyond. Gemfields may even look at ramping up production at its Montepuez site now the potential size of the deposit has been recognised. Meanwhile, continued strength in the price of emeralds should Kagem’s margins. Fabergé, though, lost money and will continue to do so for the next two to three years, the broker reckons. Gemfields has been adding new distribution channels to improve the business’s potential, finnCap adds. The broker has upped its target price slightly, to 82p, compared to a market price today of 50.7p.
Plenty of upside still at Gemfields, says broker
Both the Kagem emerald mine in Zambia and the Montepuez ruby mine in Mozambique have scope to expand further, according to broker finnCap.