- Gemfields Group Limited
- 23 December 2024 10:53:42
Source: Sharecast
The AIM-traded firm said its recent emerald and ruby auctions generated revenue of $16.1m and $46.2m, respectively, which were significantly below historical levels.
It put the decline down to an oversupply of Zambian emeralds sold at discounted prices, lower production of premium rubies at MRM, a weakened luxury market driven by economic challenges in China, and increased geopolitical instability.
Additionally, civil unrest in Mozambique following contested elections had disrupted supply chains and logistics, raising operational risks despite uninterrupted mining at MRM.
The company said the construction of the second ruby processing plant at MRM remained on schedule and within budget, with completion expected by the middle of 2025.
It said the facility would be critical to increasing the production of premium rubies and enhancing revenue streams by the end of next year.
In response to its challenges, Gemfields said it was implementing a series of cost-cutting initiatives to streamline its operations.
Mining at Kagem Mining, its Zambian emerald mine, would be temporarily suspended for up to six months, with operations focused on processing existing ore stockpiles.
Planned capital spending at ruby development projects in northern Mozambique had meanwhile been halted, while operations at Nairoto Resources, a gold project, had ceased, as the company actively seeked out buyers for the asset.
Strategic options were being reviewed for Fabergé, the luxury brand owned by the group, alongside broader operational rationalisation across Gemfields’ businesses.
Gemfields said it was monitoring its working capital closely, and remained prepared to adopt further cost-saving measures or pursue external funding if needed.
At 0957 GMT, shares in Gemfields Group were down 9.09% at 6.5p.
Reporting by Josh White for Sharecast.com.