Gemfields (LON:GEM) has been named “Gemstone Mining Company of the year” by an influential industry group in India.
The award recognises Gemstone’s ‘outstanding support and contribution to the gemstone industry’.
The Indian Diamond and Colorstone Association (IDCA) will present the award at an event in Tucson, Arizona, in February 2011.
The IDCA effectively represents India’s entire gemstone sector, which is estimated to cut and polish 90 percent of the world’s gemstones.
Gemfields’ share price has been on the up in recent weeks after a sparkling set of prelims lit the blue touch-paper back in October. The shares are up around 25 percent since Gemfields posted its maiden profit.
The emerald producer’s turnaround has been masterminded by chief executive Ian Harebottle, who has put the company on a very sound financial footing.
As at the end of June it had US$2.8 million in the bank and stock of stones conservatively worth US$16.5 million.
The last update revealed July had been record month with the company’s Kagem mine in Zambia producing 3.9 million carats. And it is understood the momentum continued.
Broker Canaccord Genuity calls the company a “hidden gem” and is predicting it will post EBITDA of US$9.5 million in 2011.
This gave rise to a valuation of 10p a share (current price 13p) based on a discounted cashflow driven net asset at a 12 per cent discount rate.
However analyst Tyler Broda recognised this was a conservative price target as he said: “We have not included any value beyond the current operations and holdings, nor from the impact of potential expansions or changes in mining method. Each of these should provide material catalysts over the coming year.”
Tom Bulford, in a very positive round-up of the company’s prospects in Red Hot Penny Shares, reckons Gemfields’ mining programme could be extended, while pointing out there are also some exciting new licences coming up.
“New management is fast restoring the fortunes of the Kagem emerald mine,” Bulford told subscribers to his newsletter in which he sets a 20p a share price target.
“But the big story here is the revival of interest in this fabulous precious stone.
“The next auction, in December, will show the extent to which emeralds have returned to popularity.”