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Growing demand for rubies sees Gemfields generate record sales at latest Montepuez auction

The coloured gemstones miner sold US$54.8mln worth of rubies extracted from its Montepuez deposit
ruby necklace
Gemfields has sold US$280.5mln worth of rubies in the eight Montepuez auctions held since June 2014

A growing global demand for high-quality rubies has helped Gemfields PLC (LON:GEM) to generate record revenues at the latest auction of gemstones  from its Montepuez ruby  mine in Mozambique.

Gemfields sold US$54.8mln worth of the red-coloured gems at the auction; which was held in Singapore and is the second and final ruby auction this year.

Of the 83 lots offered to the bidding companies, of which there were 54, 78 were sold. In total, just shy of 896,000 carats were sold, at an average price of US$61.13 per carat.

“Achieving revenues of US$54.8 million is an all-time high for any Gemfields auction and a pleasingly 24% increase to our prior auction revenue record,” said Ian Harebottle.

“The prices achieved at this auction, combined with the high percentage of goods sold, highlight our belief in the ongoing increase in demand for responsibly sourced Mozambican rubies across key markets and jewellery categories.

“The response received from our customers was very encouraging and they share our excitement about the future potential for the ruby industry.”

No update on takeover offers

Perhaps unsurprisingly, Gemfields didn’t give any update on the two takeover offers it has received in recent weeks.

The AIM-traded group’s major shareholder, Pallinghurst Resources, lodged its nil-premium offer to take control of Gemfields last month.

The Gemfields board wasn’t too happy with that “unsolicited” approach and labelled it as a “derisory” bid that undervalues the company.

Chinese investment giant Fosun Gold – run by billionaire Guo Guangchang – then put forward a proposed cash offer of 40.85p yesterday, valuing the miner at around £225mln.

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