Gemfields Sees Q3 Emerald Production Slide 28%

London--Despite a decrease in emerald production in its fiscal third quarter ended March 31, Gemfields reported that overall production was solid enough that its Kagem emerald mine and Montepuez ruby mine are on track to meet their guidance for the year.

Production of emerald and beryl was 7.1 million carats in the third quarter, compared with 9.9 million carats in the prior-year period. Gemfields said the difference is attributed in large part to finding a higher-grade zone during the third quarter 2015.

This also affected the average grade from Kagem in the third quarter, with Gemfields reporting 297 carats per ton in 2016. This is a 16 percent year-over-year decline.

The company held an auction of predominantly higher quality rough emeralds in Lusaka, Zambia from March 30 to April 3, generating revenues of $33.1 million and an average of $70.68 per carat, a record average price for higher quality emerald auctions at Gemfields.

The next auction will be of predominantly lower quality rough emerald and beryl from Kagem and is scheduled to take place this month in Jaipur, India.

Ruby production, meanwhile, was up in the third quarter.

Gemfields reported that it mined 2 million carats of ruby and corundum, compared with 1.4 million carats in the third quarter ended March 2015.

This was supported in part by the processing of the higher grade, lower value amphibolite (a type of metamorphic rock) resources but offset by prolonged and heavy rainfall.  

The average grade also was up, from 18 carats per ton last year to 30 carats per ton this quarter.

There were no ruby actions held during the three-month period. The next auction, which will consist of mixed qualities of rough ruby from Montepuez, is slated to take place in Singapore in June.

To date, Gemfields has generated more than $116 million in revenue from auctions held in the 2016 financial year and still has the two additional auctions prior to year-end to add to that total.

When it comes to Fabergé, sales orders agreed (sales to which the brand has agreed and confirmed with customers during the period) fell 26 percent when compared with the year-earlier period, due to the sale of the high value Pearl Egg in February 2015 and the timing of the 2016 Baselworld show, the company said.

The number of sales transactions for the brand in the third quarter 2016 was up 17 percent while the average selling