Coloured gems specialist Gemfields PLC (LON:GEM) achieved a new “per carat” record price for higher quality auctions at its recent auction in Lusaka, Zambia.
The auction of predominantly higher quality rough emeralds took place from 30 March until 3 April, and raked in $33.1mln, at an average of $70.68 per carat.
Of the 558k carats offered for sale, 469k carats were sold, 84% of the total up for sale.
Gemfields said the 21 auctions of the output from its 75%-owned Kagem emerald mines have raised an aggregate of $412mln in revenues.
The auction also included higher quality amethysts from Kariba Minerals Ltd in which Gemfields has a 50% interest, with the balance also belonging to the Government of the Republic of Zambia.
The amethysts auction brought in $0.22mln at an average price of $3.26 per carat. Of the 9.4mln carats on sale, 6.6mln (70%) were sold.
Gemfields' next auction is expected to take place in May 2016 in Jaipur, India and is anticipated to be predominantly comprised of lower quality emerald and beryl from the Kagem emerald mine in Zambia.
"Our return to Lusaka has delivered another strong - and indeed record - result at a time when global commodity and diamond prices remain volatile and uncertain,” said Ian Harebottle, chief executive officer of Gemfields.
“Demand for - and prices of - emeralds clearly remain as robust as ever and gemstone mining represents one of the healthier segments of the sector. We're delighted that, in collaboration with our partners, the Government of the Republic of Zambia, the Kagem and Kariba operations continue to perform strongly," he added.
House broker finnCap described it as a “good result” that showed the market is holding up in terms of both price and demand.
Shore Capital was a touch more effusive, having done some number crunching in the belief that parameters other than just price and volume should be considered, as the mix of stones at each auction is different.
“The number of bidders was the lowest of the last six auctions at 33 (last auction: 37 companies), and unsurprisingly, the average number of bids per lot was second-lowest at nine,” Shore's Yuen Low observed.
“The percentage by weight of lots sold fell to 84% (469kct sold, 558kct offered), the second-lowest of the last six auctions,” Low continued, before adding: “However, most importantly in our view, the percentage by value was 94%, the second-best result of the last six.”
Overall, Shore Capital was encouraged by the apparent strength of the emerald market.
Gemfields’ next emerald auction, which is to comprise mainly lower-quality emeralds, is to be held in Jaipur, India in May 2016.
SP Angel speculated that the Jaipur auction may contain stones that failed to sell in the Lusaka auction, so no one should be expecting the next auction to match the record prices seen in Lusaka, but nonetheless “Gemfields has established a solid market presence”.
Shares in Gemfields rose 3.4% to 46.125p in the morning trading session.