Gemfields (LON:GEM) said production of emeralds and rubies was up 40% year-on-year in the final quarter of 2014, while successful auctions revealed the “firmness in global demand" for its output.
In a comprehensive update covering its Kagem operation in Zambia, Montepuez in Mozambique and the Faberge luxury goods brand, it gave an upbeat assessment of “growth and development prospects”.
Emerald output from Kagem jumped 5.8mln carats in the three months to December 31 from 3.9mln 12 months earlier, although there was a slight decline in the grade to 190 carats per tonne from 224 carats.
This, Gemfields said, was the result of from bulk sampling at the new pits of Fibolele and Libwente. Increased mining activity across the licence area led to a rise in operating costs.
Montepuez ruby production rose to 3.4mln carats from 2.3mln previously, although the grade was lower at 34 carats per tonne compared with 64 carats with some dilution resulting from processing the washing plant stockpile.
Again, increased mining activity was cited for an rise in costs.
The company held two auctions in the period that generated revenues of US$78.2mln.
Chief executive Ian Harebottle said: “The results of the auctions held during the quarter - one of emeralds and one of rubies - demonstrated the ongoing firmness in global demand for coloured gemstones and associated jewellery.
“We remain upbeat about the growth and development of our sector and look forward to the results of our two forthcoming auctions and the various luxury events scheduled to take place over the next few months."
Gemfields said a 12% fall in sales orders at Fabergé was the result of a short term shift of focus and the ongoing tensions in Russia and the Ukraine.
It added the opening of new wholesale accounts was deferred pending the “strategic unveiling of Fabergé's new watch, high jewellery and updated core jewellery collections” in late March.
Broker Investec said the quarterly grade and cost volatility was common for a company ramping up activities.
“Of greater importance is news flow on gem auctions and development in particular of Montepuez as work being under taken delivers greater understanding of the asset’s potential which we view as particularly exciting, and so are not concerned about short term operational volatility,” it added.
At 11.30am, the stock, up 37% in the last year, was steady at 48.5p, valuing the business at £236mln.