Gemfields July Auction Sales Of $7.5M

28th Jul 2010 08:02

LONDON (Dow Jones)--Gemfields PLC (GEM.LN), said Wednesday that its July 2010 rough emerald auction realizes sales of $7.5 million, the highest auction revenue to date. MAIN FACTS: -Demand for Zambian emeralds, and more specifically Gemfields' Kagem emeralds, has seen a steady increase across all sectors over the past year. -Per carat prices improved 83% over the last auction of higher quality material held in November 2009. -Four auctions held since July 2009 generated revenues totaling $26.2 million. -Quarter ending June 30 saw solid production volumes, good grades and the lowest quarterly unit production costs achieved to date. -The year ending June 30 saw Kagem's operating costs fall 42%, with gemstone production down just 38%, representing real achieved economies of scale. -Gemfields' next auction of (predominantly higher quality) rough emeralds is scheduled to take place during December 2010. -Despite these improvements, the stripping ratio is anticipated to increase in the short to medium term as areas of overburden are mined in order to expand the levels of available ore and is expected to have a commensurate impact on total mining costs. -Underground mining project continues to make progress with a total of 76.6 meters having been developed by June 30. -This remains a trial project in which the various challenges and technicalities associated with underground mining within Kagem's specific geological context being tested and refined before expanding underground mining into other target areas across the mining license area. -Presently has $1.3 million in cash. -Kagem Mining Ltd, in which Gemfields has a 75% interest, has bank loans and leases repayable by Dec. 31, totaling $2.4 million. -Gemfields has gemstone inventory estimated by management to exceed $10 million. -Shares at 0700 GMT up 0.1 pence, or 2.6%, at 4.9 pence. By Iain Packham, Dow Jones Newswires; 44-20-7842-9269; [email protected] (END) Dow Jones Newswires July 28, 2010 03:02 ET (07:02 GMT)