Gemfields (LON:GEM) shares climbed more than 10 percent in early deals after it updated investors on its strong performance in the second quarter.
The company operates the 75 percent owned Kagem mine in Zambia which is the largest emerald mine in the world.
In December Gemfields had its most successful gemstone auction to date. It generated US$19.6 million from the auction, which is almost as much as a whole year's worth of revenue - revenues were 19.9 million in the twelve months ended 30 June 2010.
Similarly Gemfields’ production followed a similar pattern with 18.7 million carats being produced in the first six months - it produced 17.4 million carats in the 12 months ended 30 June 2010.
In the final three months period, ended 31 December 2010, it produced 5.9 million carats, achieving grades of 369 carats per tonne. It had unit production costs of US$0.56 per carat - compared to an historic average of US$0.64 per carat.
"Kagem has delivered a phenomenal quarter in terms of sales and enjoyed another robust production quarter,” chief executive Ian Harebottle said.
“We look forward to the forthcoming auction in Jaipur and the encouraging outlook for the company and our partners in the coloured gemstone sector.”
At the end of the quarter Gemfields had US$15.6 million in cash, and its 75 percent owned subsidiary Kagem Mining Ltd paid off all its bank loans and leases and it is now debt free.