Sales, profits fall in fiscal 2013 for Gemfields

London--Colored gemstone miner Gemfields PLC saw both sales and profits decline this fiscal year, a year in which it held one less auction due to its issues with the Zambian government.

According to the company’s recently released year-end report, Gemfields recorded revenues of $48.4 million in its fiscal year ended June 30, 2013, down 42 percent from $83.7 million in fiscal 2012.

The company reported a net loss of $22.8 million, a drastic drop from a profit of $161.5 million in fiscal 2012.

Gemfields’ results were adversely affected by discussions between the company and the Zambian government regarding the proposed ban on the auctioning of emeralds outside of the country.

In the second half of the year, the Government of the Republic of Zambia asked Gemfields to host its auctions in the country rather than abroad, resulting in the disruption of its auction schedule.

Gemfields was only able to hold two auctions during the year, rather than the planned three, with the company noting that revenues from the third auction now will be counted in fiscal year 2014.

Annual production of emerald and beryl from the company’s main asset, the Kagem mine, was 30 million carats during the period, up 42 percent from the 21.1 million carats produced in 2012.

Fiscal 2013 was the first year the Montepuez ruby deposit was in operation for Gemfields, and the company reports that approximately 1.8 million carats of ruby were extracted during the year. Gemfields said it expects to hold its first ruby auction before June 30, 2014.

Meanwhile, Gemfields and ZCCM-IH, its partner in Kariba Mineral Limited, invested $1.25 million each into the Kariba mine, allowing for the purchase of mining and processing equipment for amethyst operations with a view to doubling monthly revenue in 2014.

“In tandem with the growth in production this year, Gemfields’ reputation as the leading producer, marketer and distributor of high-quality rough gems has developed apace, with ever-increasing consumer appetite for our ethically sourced and consistently supplied colored gemstones,” said Graham Marshall, non-executive chairman.

“The record (average) auction price of $54 per carat achieved at our July 2013 emerald auction in Zambia (just three weeks after the close of this reporting period) clearly illustrates the increased demand and other benefits we continue to derive from our global marketing campaigns.”

During the 2013 fiscal year, Gemfields completed its acquisition of Fabergé, the fine jewelry