Shares in Gemfields (LON:GEM) climbed 1.2 percent this morning after receiving a vote of confidence from a major shareholder, which upped its stake in the company.
Gemfields revealed today that BlackRock bought more shares in the company earlier this month, upping its stake from 4.16 percent to 5.06 percent.
Following the purchase, BlackRock remains the third largest shareholder in Gemfields behind Standard Life Investments and Rox Limited, which hold 5.14 percent and 63.3 percent respectively in the company.
Gemfields’ flagship project is the Kagem mine in Zambia. The company has a unique strategy of mining and marketing emeralds under the Kagem name – a variation of a model used by De Beers to dominate the diamond market.
The share purchase by BlackRock came just after the end of Gemfields’ financial year on 30 June.
The full year report is yet to be released, but Gemfields has recently reaffirmed its upbeat guidance for the year, expecting to deliver a “robust” performance.
The company was happy with the results in the first nine months of the year, which saw its production reach 22.2 million carats.
The nine month production was ahead of Gemfields’ output for the whole 2010 of 17.4 million carats.
In the March quarter, gemstone production was lower than in the previous quarter – at 3.5 million carats versus 5.9 million carats – but the quality of the stones improved, which should result in higher proceeds when sold at auction.
Meanwhile, Gemfields is working on diversifying into other premium coloured gemstones.
The company has recently expanded its operations further in June by acquiring a 75 percent stake in what it called the most important ruby deposit in Mozambique.
The stones produced at the project were comparable in quality to those produced in Burma and also at Winza in Tanzania, said Gemfields.
Gemfields shares rose 0.25 pence (1.2 percent) to 21 pence in early deals in London. The company cxurrently has a market cap of £68 million.