Gemfields’ Revenue Falls 46 Percent

London--The delay of an auction led to both a revenue decrease and a net loss for Gemfields in the first half of its fiscal year ended Dec. 31.

The colored gemstone miner reported that revenue for the first half of the fiscal year was down 46 percent, declining from $94 million last year to $51 million this year.

The company said the decrease was due in large part to its postponement of a higher quality rough emerald auction originally scheduled for December 2016. The sale was pushed to this month to give Gemfields’ Indian customers time to adjust to the country’s demonetization program.

As a result, the company held only two gemstone auctions in the six-month period: one commercial quality rough emerald and beryl auction, and one mixed quality rough ruby and corundum auction.

This compares with three auctions in the prior-year period: one higher quality rough emerald and beryl sale, one commercial quality rough emerald and beryl sale, and one mixed to higher quality rough ruby and corundum auction.

The emerald and beryl auction held during the half-year period took place in September in Jaipur, India, generating revenues of $10.7 million.

The ruby sale took place in December in Singapore and achieved total revenues of $30.5 million.

In terms of Gemfields’ two biggest projects--the Kagem emerald mine in Zambia and the Montepuez ruby site in Mozambique--production was varied.

At Kagem, output was down from 15.7 million carats in the prior-year period to 10.7 million carats in 2016, while average grade declined from 254 carats per ton last year to 166 carats per ton this year. Gemfields said the difference in both was attributable to the “varied nature of the mineralization and a lower grade zone mined in the current period.”

Due to the low first-half production, Gemfields said it is dropping its expectations for Kagem’s production from 30-35 million carats to 25-30 million carats.

At Montepuez, meanwhile, output more than doubled, increasing from 2.1 million carats in 2015 to 5.6 million carats in the half-year period, with the grade also nearly doubling from 15 carats per ton to 29 carats per ton this year.

Gemfields said in its results that while the “positive impact” of the efforts to grow and expand the downstream emerald market are visible, it is likely to take a few more years for the ruby market to have access to similar levels of