REG - Gemfields Group Ltd - Proposed Rights Issue Circular and EGM Notice
11/04/2025 12:00
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RNS Number : 7322E Gemfields Group Limited 11 April 2025
Incorporated in Guernsey. Guernsey registration number: 47656
South African external company registration number: 2009/012636/10
Share code on JSE:GML (General Segment of JSE Main Board) / AIM:GEM
ISIN: GG00BG0KTL52 | LEI: 21380017GAVXTCYS5R31
("Gemfields" or the "Group" or the "Company")
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, NEW ZEALAND,
CANADA, HONG KONG, SINGAPORE OR JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH
RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. PLEASE SEE THE
IMPORTANT NOTICES AT THE END OF THIS ANNOUNCEMENT.
THIS ANNOUNCEMENT IS NOT AN OFFER FOR SALE OR SUBSCRIPTION OR A SOLICITATION
OF AN OFFER TO SUBSCRIBE FOR ANY SECURITY IN ANY JURISDICTION AND IS FOR
INFORMATION PURPOSES ONLY. ANY INVESTMENT DECISION TO BE MADE IN CONNECTION
WITH THE PROPOSED RIGHTS ISSUE SHALL BE MADE SOLELY ON THE BASIS OF THE
INFORMATION TO BE CONTAINED IN THE PROSPECTUS.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET
ABUSE REGULATION (EU) NO. 596/2014 AS IT FORMS PART OF UK LAW BY VIRTUE OF THE
EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED ("MAR"). MARKET SOUNDINGS AS
DEFINED IN MAR WERE TAKEN IN RESPECT OF CERTAIN OF THE MATTERS CONTAINED IN
THIS ANNOUNCEMENT, WITH THE RESULT THAT CERTAIN PERSONS BECAME AWARE OF SUCH
INSIDE INFORMATION, AS PERMITTED BY MAR. UPON THE PUBLICATION OF THIS
ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC
DOMAIN AND SUCH PERSONS SHALL THEREFORE CEASE TO BE IN POSSESSION OF INSIDE
INFORMATION.
ADVERTISEMENT - SUBJECT TO THE PASSING OF THE RESOLUTIONS AT THE EXTRAORDINARY
GENERAL MEETING, IT IS PROPOSED THAT A PROSPECTUS WILL BE PUBLISHED IN
CONNECTION WITH THE PROPOSED RIGHTS ISSUE, WHICH INVESTORS WILL BE ABLE TO
OBTAIN FROM THE COMPANY'S WEBSITE, BY USING THE FOLLOWING LINK:
WWW.GEMFIELDSGROUP.COM/PROPOSED-RIGHTS-ISSUE-2025. SHOULD THE FCA AND/OR JSE
APPROVE THE PROSPECTUS, SUCH APPROVAL SHOULD NOT BE UNDERSTOOD AS AN
ENDORSEMENT OF THE SECURITIES TO BE OFFERED PURSUANT TO THE PROPOSED RIGHTS
ISSUE. POTENTIAL INVESTORS SHOULD READ THE PROSPECTUS (WHEN PUBLISHED) BEFORE
MAKING AN INVESTMENT DECISION IN ORDER TO FULLY UNDERSTAND THE POTENTIAL RISKS
AND REWARDS ASSOCIATED WITH THE DECISION TO INVEST IN THE SECURITIES.
PUBLICATION OF A CIRCULAR AND NOTICE OF EXTRAORDINARY GENERAL MEETING
DECLARATION INFORMATION PERTAINING TO THE PROPOSED RIGHTS ISSUE 10 NEW SHARES
FOR EVERY 21 EXISTING SHARES AT 4.22 PENCE OR ZAR1.06860 PER NEW SHARE
RULE 9 WAIVER
AND
NOTICE OF EXTRAORDINARY GENERAL MEETING
LONDON, 11 APRIL 2025
Gemfields Group Limited ("Gemfields" or the "Group" or the "Company")
announces it is seeking shareholder approval to, amongst other things, issue
556,203,396 New Shares to raise approximately USD30 million by way of a fully
committed and underwritten Rights Issue (the "Proposed Rights Issue").
The Company is convening an extraordinary general meeting of its shareholders
to approve the Proposed Rights Issue of 556,203,396 New Shares, representing
approximately 47.6 per cent. of Gemfields' share capital in issue as at the
Latest Practicable Date, and a Rule 9 Waiver to waive the requirement for
Assore International Holdings Limited ("AIH") to make a general offer under
Rule 9 of the Takeover Code in cash for Ordinary Shares in the Company which
might otherwise arise as a result of the Proposed Rights Issue.
The Circular setting out details of the Proposed Rights Issue and the Rule 9
Waiver and containing the Notice of Extraordinary General Meeting will be
posted to shareholders today and will shortly be available on the Company's
website at: www.gemfieldsgroup.com/proposed-rights-issue-2025/.
An extract of information set out in the Circular is set out in the Appendix
to this announcement. All defined terms in this announcement are as set out
in the Circular.
Further details in relation to the Proposed Rights Issue (including, without
limitation, the timetable of events) will be set out in a Prospectus which is
expected to be published by the Company, subject to the passing of the
Resolutions and the approval of the FCA and the JSE, on or around 20 May 2025.
In the UK, Panmure Liberum will be acting as Financial Adviser, Co-ordinator
and Corporate Broker in relation to the Proposed Rights Issue and is the
Company's Nominated Adviser for the purposes of the AIM Rules for Companies.
In South Africa, Investec is acting as JSE Sponsor in relation to the Proposed
Rights Issue.
Full year results and Proposed Rights Issue shareholder and analyst webcast
The Company intends to host a shareholder and analyst webcast on Wednesday, 23
April 2025 at 9:00 am (UK) / 10:00 am (South Africa) to grant shareholders
time to review the released Circular and notice to attend the webcast. Sean
Gilbertson (CEO) and David Lovett (CFO) will present the Company's 2024 full
year results and the Proposed Rights Issue.
The Company will host a question and answer session following the
presentation. Should you wish to ask a question, please either email your
questions in advance to ir@gemfields.com (mailto:ir@gemfields.com) , or use
the 'Ask a question' link on the webcast page during the event.
Shareholders who wish to watch the webcast are requested to register via the
link below:
https://sparklive.lseg.com/GemfieldsGroupLtd/events/d6b68c49-14cb-4ae4-82df-195034866c67/gemfields-group-limited-full-year-results-2024
(https://sparklive.lseg.com/GemfieldsGroupLtd/events/d6b68c49-14cb-4ae4-82df-195034866c67/gemfields-group-limited-full-year-results-2024)
.
The slides that will be presented on the webcast, will be available on
Gemfields' website under Investors: Presentations shortly at
www.gemfieldsgroup.com (https://www.gemfieldsgroup.com/) .
Background to the Proposed Rights Issue
The Proposed Rights Issue will, subject to Shareholder approval, be undertaken
to address a near-term working capital shortfall as a result of the cumulative
impact of a number of challenges the Company encountered in the second half of
2024 and the first quarter of 2025, all of which are considered by the
Directors to be transient in nature, coinciding with a period of significant
planned investment.
As set out in an announcement dated 23 December 2024, the Company is carrying
out a widespread and ongoing cost saving programme to reduce the cost base of
the business. In combination with the Proposed Rights Issue, these initiatives
are intended to secure the near-term future of Gemfields, ahead of the
commissioning of a second ruby processing plant at MRM ("PP2"). Once fully
operational, PP2 is expected to triple the processing capacity and
significantly increase the mine's ruby production, leading to a material
increase in product available for sale and, therefore, the opportunity to
generate additional revenue.
The Company also announced on 23 December 2024 that it was assessing strategic
options in respect of Fabergé, the iconic luxury-brand owned by the Group.
Since the date of that announcement, the Company has engaged with a number of
parties who have expressed an interest in the Fabergé business, and received
a number of non-binding offers. Due to the Company's requirement for external
funding in the short-term, the Board does not believe that the non-binding
offers are sufficiently sound alternatives within the timeframe required to
meet the Group's funding needs. To proceed with external funding in the
required timeframe, the assessment of strategic options for Fabergé has
paused and will only recommence following the completion of the Proposed
Rights Issue.
As a result, the Board is of the view that the Proposed Rights Issue is in the
best interests of the Company and its shareholders as a whole at this time in
order to meet the funding needs of the Group.
Description of the Proposed Rights Issue
Subject to the fulfilment of, amongst others, the conditions described below,
it is expected that New Shares will be offered for subscription to Qualifying
Shareholders (other than Qualifying South African Shareholders) at 4.22 pence
per New Share, or, in the case of Qualifying South African Shareholders,
ZAR1.06860 per New Share, payable in full on acceptance. The Proposed Rights
Issue will be on the basis of:
10 New Shares for every 21 Existing Shares
held by and registered in the names of Qualifying Shareholders (other than
Shareholders resident or with registered addresses in any of the Excluded
Territories) on the relevant Record Date and so in proportion to any other
number of Existing Shares each Qualifying Shareholder then holds and otherwise
on the terms and conditions to be set out in the Prospectus and, in the case
of Qualifying Non-CREST Shareholders or Qualifying South African Shareholders
holding Existing Shares in certificated form (other than such Shareholders
resident or with registered addresses in any of the Excluded Territories), the
Provisional Allotment Letters or Forms of Instruction respectively.
The UK Issue Price of 4.22 pence per New Share represents:
· a 19.7 per cent. discount to the theoretical ex-Rights price based
on the closing price of 5.75 pence per Share; and
· a 35.0 per cent. discount to the 30-day volume weighted average
price per share of 6.50 pence per Share,
in each case on the Latest Practicable Date.
The SA Issue Price of ZAR1.06860 per New Share represents:
· a 21.5 per cent. discount to the theoretical ex-Rights price based
on the closing price of ZAR1.50000 per Share; and
· a 28.8 per cent. discount to the 30-day volume weighted average
price per share of ZAR1.50049 per Share,
in each case on the Latest Practicable Date.
The New Shares will, when issued and fully paid, rank pari passu in all
respects with the Existing Shares, including the right to receive all future
dividends and other distributions declared, made or paid after the date of
their issue.
The Proposed Rights Issue will result in the issue of 556,203,396 New Shares,
which will form approximately 32.3 per cent. of the Shares in issue
immediately following completion of the Proposed Rights Issue.
Subject to the Resolutions being approved and the Proposed Rights Issue taking
place, the Rights Issue and Underwriting Agreement provides that the
Underwriters will receive a commission of 2 per cent. of the gross proceeds
raised from the issue of the Underwritten Shares, in the Agreed Proportions,
to each respective Underwriter.
Underwriting, Pre-Funding Agreements and Relationship Agreement
In order to provide certainty of funding to the Company, subject to the
passing of the Resolutions at the Extraordinary General Meeting, the Proposed
Rights Issue will be underwritten by the Underwriters (AIH and Rational
Expectations (Pty) Ltd ("Rational")) in accordance with the terms of the
Rights Issue and Underwriting Agreement. Accordingly, AIH, which currently
holds approximately 29.14 per cent of the issued share capital of Gemfields,
and Rational, which, together with the parties it represents as set out in
more detail in the paragraph 16 of Part II of the Circular, currently holds
approximately 15.49 per cent of the issued share capital of Gemfields, in each
case at the Latest Practicable Date, have undertaken to take up their
respective entitlements in full in the Proposed Rights Issue and to
collectively underwrite, in the Agreed Proportions, the entirety of the
Proposed Rights Issue in excess of their respective entitlements. The Proposed
Rights Issue is being underwritten by the Underwriters such that the Proposed
Rights Issue shall result in gross proceeds of approximately USD30 million
being raised.
In addition, each Underwriter has entered into an individual Pre-Funding
Agreement with the Company, pursuant to which: (1) AIH shall make a loan in
the amount of USD8,742,000 available to the Company; and (2) Rational shall
make a loan in the amount of USD4,646,000 available to the Company (each being
a "Loan") in each case, on the date of the publication of the Circular. This
will provide the Company with an immediate working capital injection pending
the completion of the Proposed Rights Issue. Each Loan will act as an advance
payment by the relevant Underwriter for its Rights under the Proposed Rights
Issue and repayment of the Loan shall be set-off against the amount otherwise
owed by the relevant Underwriter to the Company for its Rights and the
Underwritten Shares it has committed to subscribe for under the terms of the
Proposed Rights Issue and the Rights Issue and Underwriting Agreement. Further
details of each Pre-Funding Agreement are set out in paragraphs 11.9 and 11.10
of Part II of the Circular.
Furthermore, the Company has also entered into a relationship Agreement with
Rational, pursuant to which, inter alia, Rational shall have the right to
nominate a non-executive director to the board of the Company, subject to
shareholder approval, for so long as it, and the parties it represents, hold
at least 12.5 per cent. of the issued share capital of the Company.
Irrevocable Undertakings
The Committed Shareholders, including the Underwriters, have given irrevocable
undertakings to take up the Committed Shares (being, in aggregate, 229,572,845
New Shares), which represent their collective entitlements to the Rights under
the Proposed Rights Issue. Further details of the irrevocable undertakings are
set out at paragraph 9 of Part II of the Circular.
Rule 9 Waiver
In the event that no Qualifying Shareholders (save for the Underwriters and
the Committed Shareholders) take up their Rights, AIH would be required to
subscribe for, in aggregate, 329,659,331 New Shares, representing
approximately 19.1 per cent. of the voting rights of the Company's issued
share capital immediately following the Proposed Rights Issue. This would mean
that AIH, (when taking into account the existing 340,367,121 Ordinary Shares
it holds as at the Latest Practicable Date), together with any persons acting
in concert with AIH, would have a maximum shareholding of 670,026,452 Ordinary
Shares, representing 38.9 per cent. of the issued share capital of the Company
following completion of the Proposed Rights Issue. The maximum shareholding of
Rational, together with the parties it represents as set out in more detail in
paragraph 16 of Part II of the Circular, in such circumstances would be
356,088,477 Ordinary Shares, representing 20.7 per cent. of the issued share
capital of the Company following completion of the Proposed Rights Issue.
Given the maximum number of Ordinary Shares that could be held by AIH, and any
persons acting in concert with AIH, following the Proposed Rights Issue, the
Takeover Panel has been consulted and has agreed to waive the requirement for
AIH and any persons acting in concert with AIH to make a general offer under
Rule 9 of the Takeover Code in cash for Ordinary Shares which might otherwise
arise as a result of the issue of the Proposed Rights Issue, subject to the
Rule 9 Waiver Resolution (as set out in the notice convening the Extraordinary
General Meeting) being passed on a poll of the Independent Shareholders. To be
passed, the Rule 9 Waiver Resolution will require a simple majority of the
votes cast by the Independent Shareholders to be in favour. For the purposes
of the Takeover Code, Rational is not considered to be acting in concert with
AIH in connection with the Proposed Rights Issue but is not considered
independent of AIH and is therefore not an Independent Shareholder.
Use of proceeds
Subject to the passing of the Resolutions and the completion of the Proposed
Rights Issue, the Company is expected to raise approximately USD30 million (in
gross proceeds). The proceeds of the Proposed Rights Issue will be used for
general corporate purposes, and specifically to provide working capital
liquidity and ensure the business is able to continue operating and fulfil its
ongoing obligations such as paying employee salaries and key operating costs,
in between auctions.
Related Party Transactions
The entry into the Rights Issue and Underwriting Agreement with the
Underwriters and the entry into each of the AIH Pre-Funding Agreement and the
Rational Pre-Funding Agreement with the Underwriters are each "related party
transactions" for the purposes of Rule 13 of the AIM Rules. The Independent
Directors consider, having consulted with Panmure Liberum, the Company's
nominated adviser for the purposes of the AIM Rules, that the terms of the
related party transactions are fair and reasonable insofar as the Shareholders
of the Company are concerned.
For purposes of the JSE Listings Requirements, the Rights Issue and
Underwriting Agreement is not regarded as a related party transaction as the
commission payable to the related parties (being the Underwriters) is not
greater than the current market-related rates as confirmed by the independent
Non-Executive Directors of the Company, and as such falls within the
exemptions contemplated under paragraph 10.6(c)(vii) of the JSE Listings
Requirements pertaining to transactions that do not constitute related party
transactions.
The Pre-Funding Agreements, for purposes of the JSE Listings Requirements, are
not regarded as related party transactions as each is an agreement involving
the lending of money by a related party (being each Underwriter) to the
Company on normal commercial terms and on an unsecured basis and as such falls
within the exemption contemplated in paragraph 10.6(c)(i) of the JSE Listings
Requirements pertaining to transactions that do not constitute related party
transactions.
Extraordinary General Meeting
An Extraordinary General Meeting of Gemfields will be held at 123 Victoria
Street, Westminster, London, SW1E 6DE, United Kingdom on 19 May 2025 at 10.00
a.m. (London time) to consider and, if thought fit, to approve the
Resolutions. The Resolutions are set out in full in the Notice of
Extraordinary General Meeting.
Actions to be taken
The Extraordinary General Meeting is being convened for the purposes of
considering and, if thought fit, passing the following Resolutions:
1. an Ordinary Resolution to be passed by the Independent Shareholders
on a poll to approve the Rule 9 Waiver Resolution;
2. a Special Resolution to grant the Directors authority to allot and
issue New Shares for cash free of pre-emption rights in connection with the
Proposed Rights Issue; and
3. an Ordinary Resolution to approve the Underwriting Issue to the
Underwriters Resolution.
Please refer to the Notice of Extraordinary General Meeting for a detailed
description of the Resolutions to be voted on by Shareholders at the
Extraordinary General Meeting.
The Proposed Rights Issue is conditional on:
(a) all of the Resolutions being passed by the requisite majority of
Shareholders;
(b) publication of the Prospectus on or around 20 May 2025;
(c) AIM Admission of the New Shares;
(d) approval by the JSE Ltd of the listing and trading of the New Shares
and the Letters of Allocation on the JSE Main Board ("JSE Admission"); and
(e) the Rights Issue and Underwriting Agreement in respect of the
Proposed Rights Issue becoming unconditional in accordance with its terms and
not having been terminated prior to AIM Admission and JSE Admission.
Therefore, if all of the Resolutions are not passed by the requisite majority
of Shareholders, or if any of the other conditions are not satisfied, the
Proposed Rights Issue will not proceed.
AIH has agreed to vote its 29.14 per cent. shareholding in Gemfields in favour
of all of the Resolutions save for the Rule 9 Waiver Resolution which it is
precluded from voting on. Rational has agreed to vote its shareholding,
together with the shareholdings of the parties it represents as set out in
more detail in paragraph 16 of Part II of the Circular, being in aggregate
15.49 per cent. of the issued share capital of Gemfields, in favour of all the
Resolutions save for the Rule 9 Waiver Resolution which it is precluded from
voting on.
Gemfields has facilitated means by which all those holding Existing Shares on
the Registers will be able to vote and/or appoint a proxy by electronic means,
further details of which are set out in the explanatory notes in the Notice of
Extraordinary General Meeting and in the accompanying Form of Proxy.
Shareholders are asked to complete and return their Form of Proxy, or submit
their proxy electronically, as soon as possible, and in any event no later
than 10.00 a.m. (London time) on 15 May 2025.
Expected timetable of events
Subject to the passing of the Resolutions at the Extraordinary General
Meeting, the Prospectus is expected to be made available on the Company's
website on 20 May 2025.
Each of the times and dates in the table below is indicative only and may be
subject to change.
Record date for shareholders to receive the Prospectus 15 May 2025
Publication of finalisation information in relation to the Proposed Rights 19 May 2025
Issue by 11:00 SAST
Restrictions on transfers between UK Register and SA Register begin Close of business on 20 May 2025
Prospectus approved and made available on-the Company's website and the FCA's 20 May 2025
National Storage Mechanism
In SA: Last Day to Trade Existing Shares on the JSE to qualify to participate 22 May 2025
in the Proposed Rights Issue (cum Rights)
Despatch of Forms of Instruction to Qualifying South African Shareholders who Close of business on 22 May 2025
hold their Shares in certificated form
Existing Shares marked "ex" by the Johannesburg Stock Exchange 9:00 SAST on 23 May 2025
Listing of Letters of Allocation commence on the JSE under Alpha code GMLN and 9:00 SAST on 23 May 2025
ISIN:GG00BT3PBP61
UK Record date for entitlement under the Proposed Rights Issue for Qualifying 18.00 London time on 27 May 2025
CREST Shareholders and Qualifying Non-CREST Shareholders
In SA: Record date for entitlements under the Proposed Rights Issue for 27 May 2025
Qualifying South African Shareholders
Despatch of Provisional Allotment Letters (to Qualifying Non-CREST 28 May 2025
Shareholders only)
Prospectus printed and posted to all Qualifying Shareholders 28 May 2025
Qualifying South African Shareholders who hold their Shares in uncertificated 09:00 SAST on 28 May 2025
form will have their accounts at their CSDP or broker automatically credited
with their Letters of Allocation
Qualifying South African Shareholders who hold their Shares in certificated 09:00 SAST on 28 May 2025
form will have their Letters of Allocation credited to an account held with
the SA Registrar
Existing Shares marked "ex" by the London Stock Exchange 08.00 London time on 29 May 2025
Proposed Rights Issue opens 29 May 2025
Admission and dealings in New Shares, nil paid, commence on AIM 29 May 2025
Nil Paid Rights credited to stock accounts in CREST Post 08.00 London time on 29 May 2025
(Qualifying CREST Shareholders only)
UK: Recommended latest time and date for requesting withdrawal of Nil Paid 16.30 London time on 5 June 2025
Rights and Fully Paid Rights from CREST (i.e. if your Nil Paid Rights and
Fully Paid Rights are in CREST and you wish to convert them to certificated
form)
UK: Latest time for depositing renounced Provisional Allotment Letters, nil or 15.00 London time on 6 June 2025
fully paid, into CREST or for dematerialising Nil Paid Rights or Fully Paid
Rights into a CREST stock account (i.e. if your Nil Paid Rights and Fully Paid
Rights are represented by a Provisional Allotment Letter and you wish to
convert them to uncertificated form)
SA: In respect of Qualifying South African Shareholders who hold their Shares 09:00 SAST on 9 June 2025
in certificated form wishing to sell all or part of their Letters of
Allocation, latest time and date for submission of Form of Instruction to SA
Registrar
SA: Last day to trade Letters of Allocation on the JSE to settle trades by the 9 June 2025
closing date of the Proposed Rights Issue in order to participate in the
Proposed Rights Issue
Listing and trading of New Shares on the JSE dealings in New Shares on a 09:00 SAST on 10 June 2025
deferred settlement basis commence
UK: Latest time and date for splitting Provisional Allotment Letters, nil or 15.00 London time on 10 June 2025
fully paid
UK: Latest time and date for acceptance, payment in full and registration or 11.00 London time on 12 June 2025
renunciation of Provisional Allotment Letters
Rights Issue closes 12 June 2025
Record date for Letters of Allocation on the JSE
Restriction on transfers between UK Register and SA Register ends Close of business on 12 June 2025
CSDP/broker accounts credited with New Shares and debited with payments due in 13 June 2025
respect of New Shares in uncertificated form
UK and SA: Results of the Proposed Rights Issue announced 13 June 2025
Listing and trading of New Shares on AIM 08.00 London time on 13 June 2025
UK: New Shares credited to CREST stock accounts as soon as possible after 08.00 London time on 13 June 2025
Expected despatch of definitive share certificates for the New Shares in Within ten Business Days of AIM Admission
certificated form
Notes:
1. The Proposed Rights Issue is subject to certain restrictions
relating to Shareholders with registered addresses in the Excluded
Territories, details of which will be set out in the Prospectus.
2. The results of the Proposed Rights Issue will be announced by way
of a simultaneous RIS and SENS announcement on 13 June 2025.
3. The times and dates set out in the expected timetable of principal
events above may be adjusted by Gemfields in consultation with Panmure
Liberum, in which event details of the new times and dates will be notified to
the Johannesburg Stock Exchange and the London Stock Exchange and, where
appropriate, Qualifying Shareholders by way of a simultaneous RIS and SENS
announcement.
4. Unless stated otherwise, references to times in this timetable are
to London time or South Africa Standard Time, as applicable.
5. The Proposed Rights Issue will open two days post the record date
to allow for the distribution of the Prospectus.
6. No excess applications are allowed. Qualifying Shareholders will
not have the right to apply for any excess New Shares not taken up by other
Qualifying Shareholders. Any New Shares not taken up by Qualifying
Shareholders pursuant to the Proposed Rights Issue, shall be subscribed for by
the Underwriters pursuant to the terms and subject to the conditions of the
Rights Issue and Underwriting Agreement.
7. The allocation of Rights Issue Shares will be such that Qualifying
Shareholders will not be allocated a fraction of a Rights Issue Share and only
whole numbers of Rights Issue Shares will be issued. Rights Issue Shares of
0.5 or greater will be rounded up and fractional entitlements of Rights Issue
Shares of less than 0.5 will be rounded down
8. Qualifying South African Shareholders who hold their Shares in
uncertificated form are required to inform their CSDP or broker of their
instructions in terms of the Proposed Rights Issue in the manner and time
stipulated in the agreement governing the relationship between the shareholder
and their CSDP or broker.
9. Qualifying South African Shareholders who hold their Existing
Shares in uncertificated form will have their accounts at their CSDP or broker
automatically credited with their Letters of Allocation and Qualifying South
African Shareholders who hold their Existing Shares in certificated form will
have their Letters of Allocation credited to an account with the SA Registrar
and will be sent a Form of Instruction.
10. South African Shareholders may not rematerialise or dematerialise
their Existing Shares from 9 June 2025 until 12 June 2025 both days inclusive.
IMPORTANT NOTICES
Panmure Liberum Limited ("Panmure Liberum"), which is authorised and regulated
in the United Kingdom by the FCA, is acting as Financial Adviser, AIM
Nominated Adviser, co-ordinator and Corporate Broker exclusively to the
Company in connection with the Proposed Rights Issue and no one else in
connection with the matters referred to in this announcement, and will not be
responsible to anyone other than the Company for providing the protections
afforded to its clients, for the contents of this announcement or for
providing any advice in relation to this matters set out in this announcement.
Neither Panmure Liberum nor any of its affiliates (nor any of their respective
directors, officers, employees or agents), owes or accepts any duty, liability
or responsibility whatsoever (whether direct or indirect, whether in contract,
in tort, under statute or otherwise) to any person who is not a client of
Panmure Liberum in connection with this announcement, any statement contained
herein or otherwise.
Apart from the responsibilities and liabilities, if any, which may be imposed
by the FCA, FSMA or the regulatory regime established thereunder, neither
Panmure Liberum nor any person affiliated with it, accepts any responsibility
whatsoever and makes no representation or warranty, express or implied, in
respect of the contents of this announcement, including its accuracy or
completeness, or for any other statement made or purported to be made by any
of them, or on behalf of them, in connection with the Company or any matter
described in this announcement and nothing in this announcement is or shall be
relied upon as a promise or representation in this respect, whether as to the
past or future. Panmure Liberum has not approved the contents of, or any part
of, this announcement and no liability whatsoever is accepted by Panmure
Liberum for the accuracy of any information or opinions contained in this
announcement and, accordingly, Panmure Liberum and its affiliates disclaim, to
the fullest extent permitted by law, all and any liability whatsoever, whether
arising in tort, contract or otherwise (save as referred to above) which it
might otherwise have to any person, other than the Company, in respect of this
announcement or any such statement.
Forward Looking Statements
This announcement includes "forward-looking statements" which include all
statements other than statements of historical facts, including, without
limitation, those regarding the Group's financial position, business strategy,
plans and objectives of management for future operations, or any statements
preceded by, followed by or that include the words "targets", "believes",
"expects", "aims", "intends", "will", "may", "anticipates", "would", "could"
or "similar" expressions or negatives thereof which are predictions of or
indicate future events and future trends. Such forward-looking statements
involve known and unknown risks, uncertainties and other important factors
beyond the Company's control that could cause the actual results, performance
or achievements of the Group to be materially different from future results,
performance or achievements expressed or implied by such forward-looking
statements. Such forward-looking statements are based on numerous assumptions
regarding the Group's present and future business strategies and the
environment in which the Group will operate in the future. These
forward-looking statements speak only as at the date of this announcement. The
Company expressly disclaims any obligation or undertaking to disseminate any
updates or revisions to any forward-looking statements contained herein to
reflect any change in the Company's expectations with regard thereto or any
change in events, conditions or circumstances on which any such statements are
based unless required to do so by applicable law or the AIM Rules for
Companies.
All subsequent oral or written forward-looking statements attributed to the
Company or any persons acting on its behalf are expressly qualified in their
entirety by the statements in the paragraph immediately above. All
forward-looking statements contained in this announcement are based on
information available to the Directors at the date of this announcement,
unless some other time is specified in relation to them, and receipt of this
announcement shall not give rise to any implication that there has been no
change in the facts set forth herein since such date. Shareholders are hereby
cautioned that certain important factors could cause actual results, outcomes,
performance or achievements of the Company or the industry in which it
operates to differ materially from those anticipated in the forward-looking
statements. These factors include, but are not limited to, those summarised in
Part I "Letter from the Chair of Gemfields" in the Circular, which is set out
below. Except as required by the FCA, the London Stock Exchange, the JSE Ltd,
the AIM Rules, the Prospectus Regulation Rules, the Disclosure and
Transparency Rules and the JSE Listings Requirements (to the extent
applicable) or other applicable laws or regulations, the Company and the
Directors undertake no obligation to release publicly any updates or revision
to any forward-looking statement contained herein to reflect any change in the
Company's or the Directors' expectations with regard thereto or any change in
events, conditions or circumstances on which any such statement is based.
Foreign shareholders
Foreign Shareholders, who have registered addresses outside the United Kingdom
or South Africa, or who are resident, or located, in, or citizens of,
countries other than the United Kingdom or South Africa, may be affected by
the laws of the relevant jurisdiction. In addition to carefully considering
the disclaimers and restrictions set out in the Prospectus, such foreign
Shareholders should inform themselves with regard to and observe any
applicable legal requirements of such jurisdiction in relation to all aspects
of this announcement that may affect them, including the Proposed Rights
Issue. It is the responsibility of each foreign Shareholder to satisfy himself
as to the full observation of the laws and regulatory requirements of the
relevant foreign jurisdiction in connection with the Proposed Rights Issue,
including obtaining any governmental, exchange or other consents or the making
of any filing which may be required, the compliance with any other necessary
formalities and the payment of any issue, transfer or other taxes or other
requisite payments due in such jurisdictions.. Nothing in this declaration
announcement, the Circular or the Prospectus referred to herein constitutes an
offer of securities for sale in any jurisdiction where it is unlawful to do so
and should not be forwarded or transmitted by recipients thereof to any person
in any territory other than where it is lawful to make such an offer
Shareholders in Excluded Territories
Shareholders who are resident or located in any one of the Excluded
Territories will not be entitled to participate in the Proposed Rights Issue
and the Prospectus will not be posted to them.
-ENDS-
Further information on Gemfields Group Limited can be found at:
GEMFIELDSGROUP.COM (http://WWW.GEMFIELDSGROUP.COM)
To join our investor mailing list, please contact us on:
ir@gemfields.com (mailto:ir@gemfields.com)
This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) no. 596/2014 which forms part of domestic UK
law pursuant to the European Union (withdrawal) act 2018 ("MAR"). The person
responsible for arranging the release of this announcement on behalf of the
Company is David Lovett, CFO.
ENQUIRIES
GEMFIELDS Sean Gilbertson / David Lovett / Ian Hughes
ir@gemfields.com (mailto:ir@gemfields.com)
T: +44(0) 20 7518 3400
SPONSOR (JSE) Investec Bank Limited
NOMINATED ADVISER Panmure Liberum
(AIM) & BROKER
Scott Mathieson / Amrit Mahbubani / John More
T: +44(0) 20 3100 2222
PRESS ENQUIRES, GEMFIELDS HEAD OFFICE, LONDON Helena Choudhury / Albertina Namburete
helena.choudhury@gemfields.com (mailto:helena.choudhury@gemfields.com) /
albertina.namburete@gemfields.com (mailto:albertina.namburete@gemfields.com)
ADDITIONAL INFORMATION ON GEMFIELDS
Gemfields is a world-leading responsible miner and marketer of coloured
gemstones. Gemfields is the operator and 75% owner of both the Kagem emerald
mine in Zambia (believed to be the world's single largest producing emerald
mine) and the Montepuez ruby mine in Mozambique (one of the most significant
recently discovered ruby deposits in the world). In addition, Gemfields also
holds controlling interests in various other gemstone mining and prospecting
licences in Zambia, Mozambique, Ethiopia and Madagascar.
Gemfields' outright ownership of Fabergé - an iconic and prestigious brand of
exceptional heritage - enables Gemfields to optimise positioning, perception
and consumer awareness of coloured gemstones through Fabergé designs,
advancing the wider group's "mine and market" vision.
Gemfields has developed a proprietary grading system and a pioneering auction
platform to provide a consistent supply of coloured gemstones to downstream
markets, a key component of Gemfields' business model that has played an
important role in the growth of the global coloured gemstone sector.
APPENDIX - LETTER FROM THE CHAIR OF GEMFIELDS
To holders of Existing Shares and for information purposes to the holders of
options over Ordinary Shares
Dear Shareholder,
Authority to Allot and Issue 556,203,396 New Shares for cash in connection
with the Proposed Rights Issue
Approval of Waiver of Rule 9 of the City Code on Takeovers and Mergers and
Notice of Extraordinary General Meeting
1. Introduction
Today, Gemfields Group Limited ("Gemfields" or the "Company") has announced it
is seeking shareholder approval to, amongst other things, issue 556,203,396
New Shares to raise approximately USD30 million by way of a Proposed Rights
Issue.
The Proposed Rights Issue will, subject to Shareholder approval, be undertaken
to address a near-term working capital shortfall as a result of the cumulative
impact of a number of challenges the Company encountered in the second half of
2024 and the first quarter of 2025, all of which are considered by the
Directors to be transient in nature, coinciding with a period of significant
planned investment.
As set out in an announcement dated 23 December 2024, the Company is carrying
out a widespread and ongoing cost saving programme to reduce the cost base of
the business. In combination with the Proposed Rights Issue, these initiatives
are intended to secure the near-term future of Gemfields, ahead of the
commissioning of a second ruby processing plant at MRM ("PP2"). Once fully
operational, PP2 is expected to triple the processing capacity and
significantly increase the mine's ruby production, leading to a material
increase in product available for sale and, therefore, the opportunity to
generate additional revenue.
The Company also announced on 23 December 2024 that it was assessing strategic
options in respect of Fabergé, the iconic luxury-brand owned by the Group.
Since the date of that announcement, the Company has engaged with a number of
parties who have expressed an interest in the Fabergé business, and received
a number of non-binding offers. Due to the Company's requirement for external
funding in the short-term, the Board does not believe that the non-binding
offers are sufficiently sound alternatives within the timeframe required to
meet the Group's funding needs. To proceed with external funding in the
required timeframe, the assessment of strategic options for Fabergé has
paused and will only recommence following the completion of the Proposed
Rights Issue.
As a result, the Board is of the view that the Proposed Rights Issue is in the
best interests of the Company and its shareholders as a whole at this time in
order to meet the funding needs of the Group. The Proposed Rights Issue will
involve the issue of 556,203,396 New Shares, representing approximately 47.6
per cent. of Gemfields' share capital in issue as at the Latest Practicable
Date.
The UK Issue Price of 4.22 pence per New Share represents:
• a 19.7 per cent. discount to the theoretical ex-Rights price
based on the closing price of 5.75 pence per Share; and
• a 35.0 per cent. discount to the 30-day volume weighted average
price per share of 6.50 pence per Share,
in each case on the Latest Practicable Date.
The SA Issue Price of ZAR1.06860 per New Share represents:
• a 21.5 per cent. discount to the theoretical ex-Rights price
based on the closing price of ZAR1.50000 per Share; and
• a 28.8 per cent. discount to the 30-day volume weighted average
price per share of ZAR1.50049 per Share,
in each case on the Latest Practicable Date.
In order to provide certainty of funding to the Company, subject to the
passing of the Resolutions at the Extraordinary General Meeting, the Proposed
Rights Issue will be underwritten by the Underwriters, (1) Assore
International Holdings Limited ("AIH"); and (2) Rational Expectations (Pty)
Ltd ("Rational"), in accordance with the terms of the Rights Issue and
Underwriting Agreement. Accordingly, AIH, which currently holds approximately
29.14 per cent of the issued share capital of Gemfields, and Rational, which,
together with the parties it represents as set out in more detail in paragraph
16 of Part II, currently holds approximately 15.49 per cent. of the issued
share capital of Gemfields, in each case at the Latest Practicable Date, have
undertaken to take up their respective entitlements in full in the Proposed
Rights Issue and to collectively underwrite, in the Agreed Proportions, the
entirety of the Proposed Rights Issue in excess of their respective
entitlements. The Proposed Rights Issue is being underwritten by the
Underwriters such that the Proposed Rights Issue shall result in gross
proceeds of approximately USD30 million being raised.
The Committed Shareholders, including the Underwriters, have given irrevocable
undertakings to take up the Committed Shares (being, in aggregate, 299,572,845
New Shares). Further details of the irrevocable undertakings are set out at
paragraph 9 of Part II of this document.
In addition, each Underwriter has entered into an individual Pre-Funding
Agreement with the Company, pursuant to which: (1) AIH shall make a loan in
the amount of USD8,742,000 available to the Company; and (2) Rational shall
make a loan in the amount of USD4,646,000 available to the Company (each being
a "Loan") in each case, on the date of the publication of this Circular. This
will provide the Company with an immediate working capital injection pending
the completion of the Proposed Rights Issue. Each Loan will act as an advance
payment by the relevant Underwriter for its Rights under the Proposed Rights
Issue and repayment of each such Loan shall be set-off against the amount
otherwise owed by the relevant Underwriter to the Company for its Rights and
the Underwritten Shares it has committed to subscribe for under the terms of
the Proposed Rights Issue and the Rights Issue and Underwriting Agreement.
Further details of each Pre-Funding Agreement are set out in paragraphs 11.9
and 11.10 of Part II of this document.
In the event that no Qualifying Shareholders (save for the Underwriters and
the Committed Shareholders) take up their Rights, AIH would be required to
subscribe for, in aggregate, 329,659,331 New Shares, representing
approximately 19.1 per cent. of the voting rights of the Company's issued
share capital immediately following the Proposed Rights Issue. This would mean
that AIH, (when taking into account the existing 340,367,121 Ordinary Shares
it holds as at the Latest Practicable Date), together with any persons acting
in concert with AIH, would have a maximum shareholding of 670,026,452 Ordinary
Shares, representing 38.9 per cent. of the issued share capital of the Company
following completion of the Proposed Rights Issue. The maximum shareholding of
Rational, together with the parties it represents as set out in more detail in
paragraph 16 of Part II, in such circumstances would be 356,088,477 Ordinary
Shares, representing 20.7 per cent. of the issued share capital of the Company
following completion of the Proposed Rights Issue.
Given the maximum number of Ordinary Shares that could be held by AIH, and any
persons acting in concert with AIH, following the Proposed Rights Issue, the
Takeover Panel has been consulted and has agreed to waive the requirement for
AIH and any persons acting in concert with AIH to make a general offer under
Rule 9 of the Takeover Code in cash for Ordinary Shares which might otherwise
arise as a result of the issue of the Proposed Rights Issue, subject to the
Rule 9 Waiver Resolution (as set out in the notice convening the Extraordinary
General Meeting) being passed on a poll of the Independent Shareholders. To be
passed, the Rule 9 Waiver Resolution will require a simple majority of the
votes cast by the Independent Shareholders to be in favour.
Further details in relation to the Proposed Rights Issue (including, without
limitation, the timetable of events) will be set out in the Prospectus which
is expected to be published by the Company, subject to the passing of the
Resolutions and the approval of the FCA and the JSE, on or around 20 May 2025.
The Directors believe that the receipt of proceeds from the Proposed Rights
Issue will strengthen the Group's financial position.
As set out in more detail in paragraphs 8 (Rule 9 Waiver and Maximum Control
Position) and 10 (Extraordinary General Meeting) below, the Shareholders will
be asked at the Extraordinary General Meeting to approve the following
Resolutions:
(a) an Ordinary Resolution to be passed by the Independent
Shareholders on a poll to approve the Rule 9 Waiver Resolution;
(b) a Special Resolution to grant the Directors authority to allot
and issue New Shares for cash free of pre-emption rights in connection with
the Proposed Rights Issue; and
(c) an Ordinary Resolution to approve the Underwriting Issue to the
Underwriters Resolution.
Please refer to the Notice of Extraordinary General Meeting for a detailed
description of the Resolutions to be voted on by Shareholders at the
Extraordinary General Meeting.
The Proposed Rights Issue is conditional on:
(a) all of the Resolutions being passed by the requisite majority
of Shareholders;
(b) the publication of the Prospectus on or around 20 May 2025;
(c) AIM Admission of the New Shares;
(d) approval by the JSE Ltd of the listing and trading of the New
Shares and the Letters of Allocation on the JSE Main Board; and
(e) the Rights Issue and Underwriting Agreement in respect of the
Proposed Rights Issue becoming unconditional in accordance with its terms and
not having been terminated prior to JSE Admission.
Therefore, if all of the Resolutions are not passed by the requisite majority
of Shareholders, or if any of the other conditions are not satisfied, the
Proposed Rights Issue will not proceed.
AIH has agreed to vote its 29.14 per cent. shareholding in Gemfields in favour
of all of the Resolutions save for the Rule 9 Waiver Resolution. Rational has
agreed to vote its shareholding, together with the shareholdings of the
parties it represents as set out in more detail in paragraph 16 of Part II,
being in aggregate 15.49 per cent. of the issued share capital of Gemfields,
in favour of all of the Resolutions save for the Rule 9 Waiver Resolution,
which it is precluded from voting on.
The purpose of this Circular is to give you details of the Proposed Rights
Issue to ensure Shareholders have all relevant information prior to the
Extraordinary General Meeting.
Please read the contents of this Circular (including the Notice of
Extraordinary General Meeting) in their entirety. Should the Resolutions be
passed by Shareholders, the Prospectus will subsequently be published, setting
out the full terms and conditions of the Proposed Rights Issue.
2. The Group's business
Gemfields is a world-leading responsible miner and marketer of coloured
gemstones. Gemfields is the operator and 75 per cent. owner of both the Kagem
emerald mine in Zambia (believed to be the world's single largest producing
emerald mine) and the Montepuez ruby mine in Mozambique (one of the most
significant recently-discovered ruby deposits in the world). In addition,
Gemfields also holds controlling interests in various other gemstone mining
and prospecting licences in Zambia, Mozambique, Ethiopia and Madagascar.
Gemfields' outright ownership of Fabergé - an iconic and prestigious brand of
exceptional heritage - enables Gemfields to optimise positioning, perception
and consumer awareness of coloured gemstones through Fabergé's designs,
advancing the Group's "mine and market" vision.
Gemfields has developed a proprietary grading system and a pioneering auction
platform to provide a consistent supply of coloured gemstones to downstream
markets, a key component of Gemfields' business model that has played an
important role in the growth of the global coloured gemstone sector.
The Company is incorporated in Guernsey and has a primary listing on the
General Segment of the JSE Main Board and is quoted on AIM in London (as a
secondary listing), with a market capitalisation at the Latest Practicable
Date of approximately USD86.9 million.
3. Background to and reasons for the Proposed Rights Issue
Introduction
Since the second half of 2023, Gemfields has undertaken material capital
expenditure investment programmes across its business in order to secure the
future operational performance of the business and to position the Group for
growth. The key investment projects have been:
i. the 18-month construction of MRM's second processing plant,
PP2, the single largest investment Gemfields has ever made with an initial
capital expenditure outlay of c. USD70 million. The plant is due to go online
by the end of the first half of 2025 and has been funded through USD55 million
of in-country debt facilities with the remaining from existing cash reserves.
There will be additional mining fleet related capital expenditure expected
from December 2025 to December 2026 of c. USD15 million;
ii. an upgraded and enlarged processing plant at Kagem (project
completed July 2024) (aggregate capital investment of USD1.3 million);
iii. increase of yellow goods and fleet at both Kagem and MRM, and
replacing aged equipment (project completed December 2024) (aggregate capital
investment of USD35.4 million); and
iv. development assets to expand, and diversify risk across the
business (aggregate capital investment of USD16.7 million in 2024).
The investment required to deliver these projects has required significant
deployment of available working capital alongside a material increase in the
Group's net debt. Additional debt facilities totalling USD66 million have been
entered into since the start of 2024 and the Group's net debt position as at
31 December 2024 was USD80.5 million, compared to a net cash position of
USD11.1 million as at 31 December 2023. It is expected that the Group's net
debt position will exceed USD100 million at points during 2025 as it fully
draws down on its debt.
Gemfields' management was aware of the careful financial path it was leading
the business along through 2024 and into 2025, and was confident that it would
be able to achieve all of the Group's objectives, without the need for
additional funding.
Unfortunately, four simultaneous and material challenges, which management
believe are transient, have been impacting the business and have resulted in
the need for additional external funding in the short term.
Four simultaneous challenges are and have been materially impacting Gemfields
As stated in the Company's announcement dated 23 December 2024, Gemfields has
been experiencing four significant negative impacts to its business
simultaneously, at the same time as it funds a growth-focused investment cycle
for the future development of the business.
These challenges are viewed by management as being transient, whilst having a
direct impact on Gemfields' recent auction revenues and an expectation that
they will impact future auction revenues in 2025. Whilst the civil unrest and
associated supply chain and logistical interruptions in Mozambique have since
materially improved, further unrest cannot be ruled out.
The principal factors that have resulted in materially lower auction revenues
in the second half of 2024 and which could also impact auction revenues in
2025 are:
i. disturbed emerald market dynamics arising from an oversupply
of Zambian emeralds at discounted prices by a competing Zambian emerald
producer during the second half of 2024, compounded by conflicting auction
dates and giving rise to a poor Zambian emerald market outlook during the
first half of 2025;
ii. lower production of premium rough rubies at MRM;
iii. uncertainty in the luxury-goods and gemstone market generally
given economic headwinds in China and geopolitical turbulence; and
iv. civil unrest, illegal mining, insurgency and associated supply
chain and logistical interruptions in Mozambique.
Further details on the ongoing challenges and how Gemfields is addressing them
follows:
The First Challenge: disturbed emerald market dynamics from the actions of a competing Zambian emerald producer
Gemfields' principal competitor for the production and marketing of Zambian
emeralds has taken recent actions that, the Directors believe, have had the
effect of damaging the supply and demand dynamics of the emerald market in the
short to medium term. This competitor conducted three rough emerald auctions
in three consecutive months (September to November 2024), the timing and
pricing of which impacted Gemfields' own auctions. This is at odds with their
prior approach and caused uncertainty in the emerald market.
In November 2024, this was demonstrated when an auction was promoted as "the
largest emerald auction in history" and was scheduled to start the day after
Gemfields' higher-quality auction closed. The effect of this was that
customers were less likely to bid fair market price if there were large
quantities of potentially cheap emeralds on offer the day after Gemfields'
auction closed.
This has markedly impacted Gemfields' performance at its last two emerald
auctions (commercial- quality in September 2024 and higher-quality in November
2024), with significantly lower bids for the mid and lower quality emeralds
and ultimately resulting in Gemfields' emerald revenues materially
underperforming in the second half of 2024. In its additional auction in
February 2025 of higher-quality emeralds which were previously unsold in the
November 2024 auction, the Company saw an improvement in both demand and
pricing, although the market remains subdued.
How Gemfields is addressing the first challenge:
Gemfields has no appetite to change its fundamental approach to auctions,
which focuses on generating the most value for the emeralds mined at Kagem,
for the benefit of all stakeholders, including its customers.
This also maximises the value generated for the local community and Zambian
government in the form of mineral royalties, corporation tax paid, dividends
to the government and export taxes/levies. In 2023 this amounted to 31 per
cent. of Gemfields' emerald revenue, and 19 per cent of revenue from 2008 to
2023. Gemfields repatriates auction revenues for all of its emeralds sold,
ensuring the value is recognised in country and at the full sale price rather
than a materially lower export price.
Gemfields remains committed to leadership and market stability in the emerald
market and takes proactive steps to support the market by withholding certain
lots that do not achieve satisfactory bidding. This approach helps foster a
more secure and sustainable market for all stakeholders including our
customers.
Kagem is ensuring its costs are carefully managed during this period of
uncertainty and has paused mining in Kagem's pits, only processing its
considerable stockpile of pre-mined emerald bearing-ore through its recently
upgraded wash plant to produce emeralds. This mining pause was introduced from
1 January 2025 and is currently due to be in place for 6 months or until such
a time that Gemfields has confidence that the recent and transient over-supply
of emeralds has subsided and the market returns to a normalised state. Not
mining for any period of time may limit near-term production, as there is
uncertainty as to the quantity and quality that would result from processing
the stockpile, but would save approximately USD1.5 million per month in
operating costs. Based on recent production statistics, overall emerald
production at the wash plant is broadly aligned with internal expectations,
while a lower proportion of premium emeralds have been recovered.
The Second Challenge: lower production of premium rough rubies at MRM
Each coloured gemstone is unique and, although geological methods can help
identify areas where both emeralds and rubies should be found, currently there
can be no certainty on the quantity, quality or value of such gemstones, until
they are brought to the surface and processed.
Gemfields is significantly reliant for revenue on the discovery of 'premium'
rough gemstones (the largest or best quality gemstones), especially so for
rubies. Tumbled rubies also make a significant contribution to revenue. Based
on recent analysis, 90 per cent. of Gemfields' ruby auction revenues since
2021 has come from just 5 per cent. of the weight of gemstones mined.
Unfortunately, the Group's premium ruby production across 2024 has been
significantly below historic averages.
In 2024, 40,006 carats of premium rubies were recovered, against a three-year
average (2021-2023) of 74,931 carats produced. This reflects both a reduction
in the grade achieved but, most importantly, the quantity of top-value rubies
brought to auction and therefore the Group's revenues.
How Gemfields is addressing the second challenge
There is no indication so far that the lower production of 'premium' rubies,
is due to any specific driver other than the natural variability of the
geological conditions where the rubies are mined, and therefore management has
the expectation that the production will improve again more towards such
historic averages.
The relative lack of premium production at MRM will be significantly addressed
by the completion of PP2, which will triple the ruby ore processing capacity
from 200 tonnes per hour to 600 tonnes per hour. The new processing plant will
allow Gemfields to:
a) process MRM's sizable stockpile of ruby ore standing at 1,476
thousand tonnes, on a 100% basis based on MRM's resources and reserves
statement in the 2024 Annual Report;
b) bring to market additional sizes and colour variations of
rubies - previously not practical given limited processing capacity; and
c) explore more of MRM's untapped licence areas, with currently
only ~10 per cent. included within the life-of-mine calculation.
The plant will diversify the risk of future lower producing pockets of supply
and expand the customer base as new types of rubies are brought to market.
The Third Challenge: uncertainty in the luxury-goods and gemstone market generally given economic headwinds in China and geopolitical turbulence.
Gemfields takes the cost of mining, processing, sorting and grading rough
coloured gemstones in Zambia and Mozambique, before selling them in sealed-bid
auctions. These typically take place four times a year for emeralds and twice
a year for rubies.
Gemfields is subject to the dynamics of supply and demand with regards to
pricing for its coloured gemstones but uses an intricate reserve price model
to ensure the gemstones maintain a fair market price. The market demand for
emeralds and rubies can vary over time and currently there are concerns over
the luxury-goods industry, which is the primary market that buys the Company's
'premium' coloured gemstones.
Concerns over China's consumption of luxury-goods and other macroeconomic
uncertainty raises the risk that Gemfields' future auctions could see lower
demand and fewer coloured gemstones being sold for fair market prices. Lower
demand could materially reduce the revenue Gemfields earns.
As announced on 22 November 2024, Gemfields' recent higher-quality emerald
auction saw lesser bids for the lower-quality gemstones on offer and
ultimately under-performed against internal expectations. In the additional
auction in February 2025 of the higher-quality emeralds that were previously
unsold at the November 2024 auction, the results indicated an improvement in
both demand and pricing, although the market remains subdued.
Similarly, as announced on 12 December 2024, the mixed-quality ruby auction in
December 2024 saw some softer prices and thinner bidding but represented a
positive outcome under the current market conditions, reaffirming the
stability of demand for Gemfields' rubies, and prices for fine-quality
aligning well with the limited supply of these rare gemstones.
Additionally, Gemfields has limited visibility into its customers' levels of
coloured gemstone stock, changes in the cost of cutting and polishing and the
availability of credit to purchase coloured gemstones at its auctions.
How Gemfields is addressing the third challenge:
Consumption patterns for luxury-goods are typically cyclical and inter-linked
with wider macroeconomic trends. Gemfields has previously seen these cycles
play out, with coloured gemstones (specifically emeralds, rubies and
sapphires) maintaining their underlying value during such periods of lower
demand for luxury-goods.
By materially increasing the scale of production at MRM, through the
construction of PP2 (the second processing plant due to complete by the end of
the first half of 2025), Gemfields expects to be able to produce more
higher-quality rubies which are more immune to market variability. This
increased production will also open up new sizes and colours of rubies that
previously were not produced at scale in order to focus on producing the
highest-quality rubies. This will diversify Gemfields' customer base and
expand the reach of coloured gemstones globally to new end-point consumers.
Gemfields' proprietary grading system alongside high-quality sorting and
auction processes provides transparency to market participants in what they
are purchasing. This can reduce the uncertainty in the value of the coloured
gemstones being sold and help limit the natural variability in market pricing
over time. Despite the recent market disruption, Gemfields will maintain its
approach as a leader in standards and promoter of responsibly-mined coloured
gemstones.
In addition, in 2025 so far, there have been signs of improved demand for
jewellery. LVMH reported 3 per cent. quarterly organic growth in revenue in
its 'Watches & Jewelry' business group in the fourth quarter of 2024.( 1
(#_ftn1) )
The Fourth Challenge: Impact of civil unrest in Mozambique.
The fourth challenge, which has already materially improved, relates to the
civil unrest and associated supply chain and logistical interruptions in
Mozambique between October 2024 and mid-January 2025 because of the contested
presidential election. This civil unrest related disruption resulted in higher
costs to access essential goods and fuel, and a three day pause in mining and
processing in December 2024 as a number of employees were temporarily
relocated in reaction to an attempted invasion of the MRM Village. The civil
unrest is in general no longer taking place. However, lingering challenges
remain amid heightened illegal miner intrusions onto MRM's licence area and a
recent increase in insurgent activities.
How Gemfields is addressing the fourth challenge:
Gemfields worked carefully with its employees, contractors and suppliers
during the period of civil unrest to limit any operational impact beyond
increased costs and temporary pause of production as described above.
Notwithstanding the ongoing insurgency risks and risk of any further
disruption or re-escalation, MRM has operated as usual since the start of
2025.
Additional actions taken by Gemfields to reduce costs and streamline business activity
As announced on 23 December 2024, Gemfields has taken and continues to
undertake actions to cut costs and streamline business activity, while
prioritising construction and commissioning of PP2, which is regarded by
Gemfields as a critical project to increase premium ruby production and
deliver additional revenue for the Group by the end of 2025.
Gemfields is also considering the timing of emerald and ruby auctions to best
match the requirements for working capital across the year.
In terms of cost cutting and operational changes, the actions include:
i. suspending, for a period expected to be up to 6 months, all
mining at Kagem (with the suspension commencing from 1 January 2025). Instead,
Kagem will focus on processing ore from Kagem's significant ore stockpile
utilising the recently upgraded processing plant;
ii. halting all non-essential spend and suspending planned
capital expenditure at its ruby development assets in northern Mozambique,
namely Megaruma Mining Limitada ("MML") and Campos De Joia Limitada ("CDJ").
Eastern Ruby Mining ("ERM") will continue core developmental work but will
delay the capital expenditure associated with its originally planned
processing plant;
iii. halting operations at Nairoto Resources Limitada ("NRL"), the
gold project situated north of MRM and seeking potential buyers;
iv. assessing strategic options in respect of Fabergé, the iconic
luxury-brand owned by the Gemfields Group; and
v. targeted rationalisation of operations and businesses across
the Group.
This list of actions is not exhaustive and Gemfields will continue to adjust
its actions as circumstances change.
Additionally, the Company intends to continue the assessment of strategic
options for Fabergé and in light of the progress made to date (as referenced
above), the Board will consider viable and deliverable options following the
conclusion of the Proposed Rights Issue.
4. Use of proceeds
Subject to the passing of the Resolutions and the completion of the Proposed
Rights Issue, the Company is expected to raise approximately USD30 million (in
gross proceeds). The proceeds of the Proposed Rights Issue will be used for
general corporate purposes, and specifically to provide working capital
liquidity and ensure the business is able to continue operating and fulfil its
ongoing obligations such as paying employee salaries and key operating costs,
in-between auctions.
5. Current Trading and Outlook
Current Trading
Since the end of the previous reporting period to 31 December 2024, Gemfields
has held an auction, in February 2025, of higher-quality emeralds that were
previously unsold from the November 2024 auction, earning total auction
revenues of USD4.8 million, with 77 per cent. of lots sold at an average price
of USD105.49 per carat.
This excludes any weight lost during the packaging process and therefore small
adjustments to the ultimately invoiced amounts. A commercial-quality emerald
auction and a small mixed-quality ruby auction is expected in April 2025.
In relation to production, Gemfields has seen coloured gemstone production
continue to underperform at MRM for premium rubies, whilst Kagem has seen
steadier production when taking into account the pause of mining since 1
January 2025.
Recent Kagem Production
KAGEM
Monthly Summary Units Jul-24 Aug-24 Sep-24 Oct-24 Nov-24 Dec-24 Jan-25 Feb-25
PRODUCTION
Gemstone production
(emerald+beryl), of which '000 carats 2,373 4,224 3,902 2,951 4,776 2,452 1,662 1,417
Premium emerald '000 carats 8.9 32.0 18.8 5.7 9.1 6.5 3.6 5.2
Emerald '000 carats 666 1,364 1,287 758 985 710 402 370
Beryl-1 '000 carats 703 1,398 1,255 902 1,677 844 496 477
Beryl-2 '000 carats 995 1,429 1,342 1,285 2,104 892 760 565
Ore processed
(from Jan 2025) '000 tonnes - - - - - - 21 20
Grade (emerald+beryl/ore
processed) (from Jan 2025) carats/tonne - - - - - - 80 71
Ore production (reaction zone) '000 tonnes 28.70 18.58 25.22 21.94 23.82 14.18 - -
Grade (emerald+beryl/
reaction zone) carats/tonne 83 227 155 135 201 173 - -
Waste mined (including TMS) '000 tonnes 1,486 1,510 1,694 1,413 1,275 617 9 5
Total rock handling '000 tonnes 1,515 1,529 1,719 1,435 1,298 631 9 5
Stripping ratio 45 69 63 63 52 41 - -
Recent MRM Production
MONTEPUEZ
Monthly Summary Units Jul-24 Aug-24 Sep-24 Oct-24 Nov-24 Dec-24 Jan-25 Feb-25
PRODUCTION
Gemstone total production,
of which '000 carats 293 206 182 156 117 199 76 181
Premium ruby '000 carats 3.69 3.14 3.54 2.84 2.22 1.52 3.58 2.63
Tumble ruby '000 carats 29.19 14.05 27.82 29.58 51.93 42.39 48.46 41.81
Ruby '000 carats 0 0 0 0 1 0 - 0
Low ruby '000 carats 8 4 2 3 5 32 5 1
Corundum '000 carats 7 6 3 3 3 3 1 2
Sapphire '000 carats 18 11 11 6 4 20 2 4
Low sapphire '000 carats 227 167 135 111 50 100 16 129
Ore production
(primary+secondary) '000 tonnes 98.4 90.0 97.9 83.6 76.9 63.0 59.8 69.6
Ore processed
(primary+secondary) '000 tonnes 93.0 97.2 85.1 97.7 83.9 79.9 76.2 74.6
Grade (total production/
ore processed) carats/tonne 3.1 2.1 2.1 1.6 1.4 2.5 1.0 2.4
Waste mined '000 tonnes 693.2 709.9 746.6 761.9 703.7 351.9 283.1 341.6
Total rock handling '000 tonnes 791.6 799.9 844.5 845.5 780.6 414.9 342.9 411.2
Stripping ratio 6.0 6.3 6.2 7.3 7.5 4.7 4.7 4.8
Outlook
Following a successful Proposed Rights Issue that addresses the short-term
working capital deficits, Gemfields is expected to be in a materially stronger
position both financially and strategically. The cost cutting and strategic
changes taken in recent months is significantly streamlining the business,
improving efficiency and materially reducing the cost base. The level of
capital expenditure at the business' development assets will also be remaining
low through 2025 while Gemfields establishes a clear strategy and capital
allocation policy for the future. At a high level, Gemfields' cost saving
programme, as described in the section 'Additional actions taken by
Gemfields', is expected to reduce Gemfields' annual operating cash cost base
down by USD35-40 million to approximately USD130 million, compared to 2024.
For capital expenditure, the business expects a total spend in 2025 of c.
USD50 million, split between
c. USD43 million at MRM, c. USD6 million at Kagem and c. USD1 million on
development assets, primarily ERM. MRM's capital expenditure in 2025 largely
relates to the remaining payments for the construction of the second
processing plant of USD21 million, with USD10.2 million already paid this so
far this year.
Gemfields expects that, following the conclusion of the Proposed Rights Issue,
a number of the transient challenges set out above will have seen signs of
improvement while it approaches the completion of its USD70 million investment
in the second ruby processing plant at MRM, significantly transforming the
production capacities of the mine.
6. Description of the Proposed Rights Issue
The Proposed Rights Issue is intended to raise net proceeds of approximately
USD30 million via the issue of 556,203,396 New Shares. The Proposed Rights
Issue is underwritten by the Underwriters in accordance with the terms of the
Rights Issue and Underwriting Agreement.
In the UK, Panmure Liberum will be acting as Financial Adviser, co-ordinator
and Corporate Broker in relation to the Proposed Rights Issue and is the
Company's Nominated Adviser for the purposes of the AIM Rules for Companies.
In South Africa, Investec is acting as JSE Sponsor in relation to the Proposed
Rights Issue. Panmure Liberum will, subject to the terms of the Rights Issue
and Underwriting Agreement, coordinate and advise the Company on the Proposed
Rights Issue. A summary of the material terms of the Rights Issue and
Underwriting Agreement is set out in paragraph 11.8 of Part II of this
document.
Subject to the fulfilment of, amongst others, the conditions described below,
it is expected that New Shares will be offered for subscription to Qualifying
Shareholders (other than Qualifying South African Shareholders) at 4.22 pence
per New Share, or, in the case of Qualifying South African Shareholders,
ZAR1.06860 per New Share, payable in full on acceptance. The Proposed Rights
Issue will be on the basis of:
10 New Shares for every 21 Existing Shares
held by and registered in the names of Qualifying Shareholders (other than
Shareholders resident or with registered addresses in any of the Excluded
Territories) on the relevant Record Date and so in proportion to any other
number of Existing Shares each Qualifying Shareholder then holds and otherwise
on the terms and conditions to be set out in the Prospectus and, in the case
of Qualifying Non-CREST Shareholders or Qualifying South African Shareholders
holding Existing Shares in certificated form (other than such Shareholders
resident or with registered addresses in any of the Excluded Territories), the
Provisional Allotment Letters or Forms of Instruction respectively.
The Proposed Rights Issue is expected to be conditional upon:
(a) the passing of all of the Resolutions by the requisite majority
of Shareholders at the Extraordinary General Meeting;
(b) the publication of the Prospectus on or around 20 May 2025;
(c) AIM Admission becoming effective by not later than 8.00 a.m.
(London time) on 29 May 2025 (or such later date as may be agreed between the
Company, Panmure Liberum and the Underwriters being a date not later than 8.00
am on 30 June 2025);
(d) approval by the JSE of the listing and trading of the New
Shares and the Letters of Allocation on the JSE Main Board and JSE Admission
becoming effective by not later than 9.00 a.m. (London time) on 23 May 2025
(or such later date as may be agreed between the Company, Panmure Liberum and
the Underwriters being a date not later than 8.00 am on 30 June 2025); and
(e) the Rights Issue and Underwriting Agreement becoming
unconditional in all respects, and not having been terminated in accordance
with its terms prior to the AIM Admission and the JSE Admission.
The New Shares will, when issued and fully paid, rank pari passu in all
respects with the Existing Shares, including the right to receive all future
dividends and other distributions declared, made or paid after the date of
their issue.
The Proposed Rights Issue will result in the issue of 556,203,396 New Shares,
which will form approximately 32.3 per cent. of the Shares in issue
immediately following completion of the Proposed Rights Issue.
Subject to the Resolutions being approved and the Proposed Rights Issue taking
place, the Rights Issue and Underwriting Agreement provides that the
Underwriters will receive a commission of 2 per cent. of the gross proceeds
raised from the issue of the Underwritten Shares, in the Agreed Proportions,
to each respective Underwriter.
Further information on the Proposed Rights Issue, including the terms and
conditions of the Proposed Rights Issue, the timetable of the Proposed Rights
Issue and the procedure for acceptance and payment and the procedure in
respect of Rights not taken up will be set out in the Prospectus which is
expected to be published on or around 20 May 2025 on the Company's website and
will be posted to Qualifying Shareholders thereafter.
7. Takeover Code
The Takeover Code applies to the Company. Under Rule 9 of the Takeover Code,
any person who acquires an interest in shares (as defined in the Takeover
Code) which, taken together with shares in which that person or any person
acting in concert with that person is interested, carry 30 per cent. or more
of the voting rights of a company which is subject to the Takeover Code is
normally required to make an offer to all the remaining shareholders to
acquire their shares.
Similarly, when any person, together with persons acting in concert with that
person, is interested in shares which in the aggregate carry not less than 30
per cent. of the voting rights of such a company but does not hold shares
carrying more than 50 per cent. of the voting rights of the company, an offer
will normally be required if such person or any person acting in concert with
that person acquires a further interest in shares which increases the
percentage of shares carrying voting rights in which that person is
interested.
An offer under Rule 9 of the Takeover Code must be made in cash at the highest
price paid by the person required to make the offer, or any person acting in
concert with such person, for any interest in shares of the company during the
12 months prior to the announcement of the offer.
Following completion of the Proposed Rights Issue, AIH will be interested in
shares carrying more than 30% of the voting rights of the Company but will not
hold shares carrying more than 50% of the voting rights of the Company. Any
increase by AIH (together with any persons acting in concert with AIH from
time to time) in its aggregate interest in shares will be subject to the
provisions of Rule 9.
8. Rule 9 Waiver and Maximum Control Position
Pursuant to the Takeover Code, the Panel may waive the requirement for a
general offer to be made in accordance with Rule 9 of the Takeover Code if,
amongst other things, the shareholders of a company who are independent of the
person who would otherwise be required to make an offer, and any person acting
in concert with it, pass an ordinary resolution on a poll approving such a
waiver.
AIH currently has an interest in 29.14 per cent. of the issued share capital
of the Company as at the Latest Practicable Date and has agreed to underwrite
the Proposed Rights Issue in the Agreed Proportions in accordance with the
terms of the Rights Issue and Underwriting Agreement.
If all of the Qualifying Shareholders (including the Underwriters) take up
their Rights and participate in the Proposed Rights Issue, AIH and any persons
acting in concert with AIH would, in aggregate, continue to be interested in
29.14 per cent. of the voting rights of the issued share capital of the
Company immediately following Admission.
However, assuming that:
(a) all Qualifying Shareholders (save for the Underwriters and the
Committed Shareholders) renounce their Rights;
(b) no Shareholders who are resident or located in any one of the
Excluded Territories subscribe for any New Shares;
(c) no other person converts any convertible securities or
exercises any options or any other right to subscribe for Shares;
(d) the Rights Issue and Underwriting Agreement becomes
unconditional in all respects and is not terminated in accordance with its
terms prior to Admission;
(e) the Resolutions are passed by the Shareholders (excluding AIH,
and any person acting in concert with AIH, and Rational, and any person acting
in concert with Rational, in relation to the Rule 9 Waiver Resolution) at the
Extraordinary General Meeting (without material amendment); and
(f) there are no other changes to the Company's issued share
capital,
AIH and any persons acting in concert with AIH could, in aggregate,
potentially be interested in a maximum of 670,026,452 Shares, representing
approximately 38.9 per cent. of the voting rights of the Company's issued
share capital immediately following the Proposed Rights Issue.
Following completion of the Proposed Rights Issue, AIH and any persons acting
in concert with AIH could, potentially, be interested in more than 30 per
cent. of the voting rights but will not hold shares carrying more than 50 per
cent. of the voting rights of the Company. Any increase in the aggregate
interest in shares of AIH and any persons acting in concert with AIH will be
subject to the provisions of Rule 9.
The Takeover Panel has been consulted and has agreed, subject to the passing
of the Rule 9 Waiver Resolution by the Independent Shareholders on a poll at
the Extraordinary General Meeting, to waive the obligation of AIH and any
persons acting in concert with AIH to make a mandatory offer for the Ordinary
Shares not already owned by it which could potentially arise following
completion of the Proposed Rights Issue. Accordingly, the Company is proposing
the Rule 9 Waiver Resolution to seek the approval of Independent Shareholders
to the Rule 9 Waiver Resolution. AIH is not eligible to vote on the Rule 9
Waiver Resolution in respect of the Ordinary Shares held by it and any of the
persons acting in concert with it. AIH has undertaken to procure (to the
extent that it is legally able to do so) that any persons acting in concert
with AIH who hold Ordinary Shares will not vote on the Rule 9 Waiver
Resolution. For the purposes of the Takeover Code, Rational is not considered
to be acting in concert with AIH in connection with the Proposed Rights Issue
but is not considered independent of AIH and is therefore not an Independent
Shareholder.
Under Rule 25.2 of the Takeover Code, any director who has a conflict of
interest should normally be excluded from the recommendation of the board to
the Independent Shareholders with respect to the proposed Rule 9 Waiver
Resolution. As at the date of this document, Patrick Sacco and Kieran Daly,
are both directors of the Company and also directors of AIH, and therefore
have a conflict of interest by virtue of not being independent of AIH. As
such, they do not have any involvement in the recommendation of the board to
the Independent Shareholders, and do not form part of the Independent
Directors.
Shareholders (excluding AIH and Rational) are therefore asked to vote in
favour of the Rule 9 Resolution at the Extraordinary General Meeting in order
for the Proposed Rights Issue to proceed.
The Independent Directors believe it is in the best interests of the Company
that the Rule 9 Waiver Resolution be passed and hereby recommend that
Independent Shareholders vote in favour of the Rule 9 Waiver Resolution.
Panmure Liberum, as the Company's independent financial adviser, has provided
formal advice to the Independent Directors that it considers the terms of the
Rule 9 Waiver Resolution to be fair and reasonable and in the best interests
of Shareholders and the Company as a whole. In providing this advice, Panmure
Liberum has taken into account the Independent Directors' commercial
assessments as well as AIH's future intentions in relation to the Company (as
set out in paragraph 2.8 of Part II of this document). In accordance with the
requirements of the Takeover Code: (1) AIH is not permitted to vote on the
Rule 9 Waiver Resolution in respect of its aggregate holding of 340,367,121
Ordinary Shares; and (2) Rational, together with the parties it represents as
set out in more detail in paragraph 16 of Part II, are not permitted to vote
on the Rule 9 Waiver Resolution in respect of their aggregate holdings of
180,896,490 Ordinary Shares.
Shareholders should note that, in the event that the Rule 9 Waiver Resolution
is approved by Independent Shareholders and the Proposed Rights Issue takes
place, AIH will not be restricted from making a subsequent offer in the future
for the Company.
Following completion of the Proposed Rights Issue, Rule 9 of the Takeover Code
will continue to apply to AIH and any persons acting in concert with AIH, as
its overall shareholding will not exceed 50 per cent. of the voting rights of
the Company. This means AIH would be required to make a general offer to all
Shareholders if it or persons acting in concert with it were to acquire
further Shares in addition to those which are the subject of the Rule 9 Waiver
Resolution, unless a further waiver is obtained.
Unless the Panel agrees otherwise, the Rule 9 Waiver will be invalidated if
any purchases of Ordinary Shares are made by AIH or any of its concert parties
in the period between the date of this document and the Extraordinary General
Meeting.
Your attention is drawn to Part II (Additional Information) of this document
which sets out certain further information and financial information that is
required to be disclosed in this document pursuant to the rules contained in
the Takeover Code.
9. Related Party Transactions
The entry into the Rights Issue and Underwriting Agreement with the
Underwriters and the entry into each of the AIH Pre-Funding Agreement and the
Rational Pre-Funding Agreement with the Underwriters are each "related party
transactions" for the purposes of Rule 13 of the AIM Rules. The Independent
Directors consider, having consulted with Panmure Liberum, the Company's
nominated adviser for the purposes of the AIM Rules, that the terms of the
related party transactions are fair and reasonable insofar as the Shareholders
of the Company are concerned.
For purposes of the JSE Listings Requirements, the Rights Issue and
Underwriting Agreement is not regarded as a related party transaction as the
commission payable to the related parties (being the Underwriters) is not
greater than the current market related rates as confirmed by the independent
Non- Executive Directors of the Company, and as such falls within the
exemptions contemplated under paragraph 10.6(c)(vii) of the JSE Listings
Requirements pertaining to transactions that do not constitute related party
transactions.
The Pre-Funding Agreements, for purposes of the JSE Listings Requirements, are
not regarded as a related party transaction as each is an agreement involving
the lending of money by a related party (being each Underwriter) to the
Company on normal commercial terms and on an unsecured basis and as such falls
within the exemption contemplated in paragraph 10.6(c)(i) of the JSE Listings
Requirements pertaining to transactions that do not constitute related party
transactions.
10. Extraordinary General Meeting
Part IV of this document sets out a notice convening an Extraordinary General
Meeting of Gemfields to be held at 123 Victoria Street, Westminster, London,
SW1E 6DE on 19 May 2025 at 10.00 a.m. (London time) to consider and, if
thought fit, to approve the Resolutions. The Resolutions are set out in full
in the Notice of Extraordinary General Meeting.
Gemfields has facilitated means by which all those holding Existing Shares on
the Registers will be able to vote and/or appoint a proxy by electronic means,
further details of which are set out in the explanatory notes in the Notice of
General Meeting and in the accompanying Form of Proxy.
The Directors have taken the decision to dispatch a notice to convene the
Extraordinary General Meeting prior to the announcement of the terms of the
Proposed Rights Issue and the publication of the Prospectus in connection with
it in order to enable the Proposed Rights Issue to be completed by the end of
June 2025, whilst meeting timing constraints imposed by UK and South African
legal and regulatory requirements. Accordingly, the Directors expect that,
subject to FCA and JSE approval, the Prospectus in connection with the
Proposed Rights Issue will be published on or around 20 May 2025.
Resolution 1
Resolution 1, the Rule 9 Waiver Resolution, will be proposed as an Ordinary
Resolution.
The Rule 9 Waiver Resolution is required for the reasons which are set out in
paragraph 8 of this Part I of this document. In accordance with the Takeover
Code, the Rule 9 Waiver is subject to the passing of this resolution by the
Independent Shareholders on a poll at the Extraordinary General Meeting. As
required by the Takeover Code, the Rule 9 Waiver Resolution will be taken on a
poll of the Independent Shareholders. AIH, and any persons acting in concert
with AIH, and Rational, and any persons acting in concert with Rational, are
not eligible to vote on the Rule 9 Waiver Resolution.
Resolution 2
Resolution 2 will be proposed as a Special Resolution.
Resolution 2 proposes that, subject to and conditional upon the passing of
Resolution 1, the Directors be authorised to exercise all the powers of the
Company to allot and issue shares for cash up to an aggregate nominal amount
of ordinary share capital of USD5,562 and to do so free of pre-emption rights
(howsoever arising, whether pursuant to article 6 of the Company's Articles or
otherwise). This represents in excess of 47.6 per cent. of the total ordinary
issued share capital of as at the Latest Practicable Date. The Directors
intend to use the authority of Resolution 2 to allot and issue 556,203,396 New
Shares for cash in connection with the Proposed Rights Issue, and for no other
purpose and to allow the Directors to deal with treasury shares, fractional
entitlements, record dates and legal, regulatory or practical problems in, or
under the laws of, any territory or any other matter in connection with the
Proposed Rights Issue. The authority will expire at the conclusion of
Gemfields's annual general meeting in 2025 or, if earlier, on the date that is
15 months after the passing of this Resolution. All shareholders are eligible
to vote on this Resolution without restriction.
Resolution 3
Resolution 3 will be proposed as an Ordinary Resolution.
The Underwriting Issue to the Underwriters Resolution is required to allow New
Shares to be allotted and issued to, inter alia, the Underwriters in
accordance with the terms of the Proposed Rights Issue and Underwriting
Agreement in the event that any other Qualifying Shareholders do not take up
their Rights and participate in the Proposed Rights Issue. All shareholders
are eligible to vote on this Resolution without restriction.
The Directors have decided that the fairest way for the Extraordinary General
Meeting to proceed would be by way of poll. This means that every eligible
Shareholder present in person or by proxy has one vote for every Ordinary
Share held.
Conducting a meeting by way of a poll ensures that all Shareholders are given
the opportunity to participate in the decision-making of the Company and have
their votes recorded even if they do not attend the meeting in person.
The Proposed Rights Issue is conditional inter alia on the passing of all of the Resolutions. If any of the Resolutions are not approved at the Extraordinary General Meeting, Gemfields will be unable to proceed with the Proposed Rights Issue.
11. Irrevocable Undertakings
AIH has irrevocably undertaken to vote in favour of the Resolutions, other
than the Rule 9 Waiver Resolution which it is precluded from voting on, at the
Extraordinary General Meeting. Rational has irrevocably undertaken to vote in
favour of the Resolutions, other than the Rule 9 Waiver which it is precluded
from voting on, and has procured that those parties that it represents (as set
out in more detail in paragraph 16 of Part II) irrevocably undertake to vote
in favour of such Resolutions. Similarly, each of those Independent Directors
who hold Existing Shares have also entered into an irrevocable undertaking to
vote in favour of all of the Resolutions at the Extraordinary General Meeting.
Furthermore, certain significant shareholders of the Company have also entered
into irrevocable undertakings to vote in favour of the Resolutions. Further
details of the irrevocable undertakings are set out at paragraph 9 of Part II
of this document.
In addition to undertaking to vote in favour of the Resolutions, the Committed
Shareholders, including the Underwriters, have each given an irrevocable
undertaking to take up their Rights under the Proposed Rights Issue. Further
details of the irrevocable undertakings are set out at paragraph 9 of Part II
of this document.
12. Additional information
Your attention is drawn to the additional information set out in this
document. You are advised to read the whole of this document and not to rely
solely on the information contained in this letter.
13. Overseas Shareholders
The Prospectus will contain information in relation to the Proposed Rights
Issue for Overseas Shareholders who have registered addresses outside the
United Kingdom or South Africa, or who are residents of or located in
countries other than the United Kingdom or South Africa.
Shareholders who are resident or located in any one of the Excluded
Territories will not be entitled to participate in the Proposed Rights Issue
and the Prospectus will not be posted to them.
14. Independent Advice
Panmure Liberum has provided competent, independent advice to the Independent
Directors, in accordance with the requirements of paragraph 4(a) of Appendix 1
to the Takeover Code, in relation to the granting of the Rule 9 Waiver.
This advice was provided by Panmure Liberum to the Independent Directors only
and, in providing such advice, Panmure Liberum has taken into account the
Independent Directors' commercial assessments as well as AIH's future
intentions in relation to the Company (as set out in paragraph 2.8 of Part II
of this document). Panmure Liberum confirms that it is independent of AIH and
has no commercial relationship with it.
15. Action to be taken in respect of the Extraordinary General Meeting
AIM Shareholders
A Form of Proxy for use at the Extraordinary General Meeting by those
shareholders whose Ordinary Shares are admitted to trading on AIM accompanies
this document. The Form of Proxy should be completed and signed in accordance
with the instructions thereon and returned to the UK Registrar, Computershare
Investor Services (Guernsey) Limited, c/o The Pavilions, Bridgwater Road,
Bristol BS99 6ZY, as soon as possible, but in any event so as to be received
by no later than 15 May 2025 (or, if the Extraordinary General Meeting is
adjourned or postponed, 48 hours (excluding any part of a day that is not a
working day) before the time fixed for the adjourned or postponed meeting).
If you hold your Existing Shares in uncertificated form in CREST, you may vote
using the CREST Proxy Voting service in accordance with the procedures set out
in the CREST Manual. Further details are also set out in the notes
accompanying the Notice of Extraordinary General Meeting at the end of this
document. Proxies submitted via CREST must be received by the UK Registrar
(Participant ID: 3RA50) by no later than 15 May 2025 (or, if the Extraordinary
General Meeting is adjourned or postponed, 48 hours (excluding any part of a
day that is not a working day) before the time fixed for the adjourned or
postponed meeting). The Company may treat as invalid a proxy appointment sent
by CREST in the circumstances set out in the CREST Regulations.
JSE Shareholders
a. If you are a JSE Dematerialised Shareholder other than with
"own name" registration
Your CSDP or broker should contact you in the manner stipulated in the
agreement concluded between you and your CSDP or broker to ascertain how you
wish to cast your votes at the Extraordinary General Meeting and thereafter to
cast your votes in accordance with your instructions. If you have not been
contacted by your CSDP or broker, you should contact your CSDP or broker and
furnish them with your voting instructions. If your CSDP or broker does not
obtain voting instructions from you, it will be obliged to vote in accordance
with the provisions contained in the agreement concluded between you and your
CSDP or broker. Similarly, you should contact your CSDP or broker in the event
that you wish to appoint another person to vote as your proxy at the
Extraordinary General Meeting. You must NOT complete the attached Forms of
Proxy.
b. If you are a JSE Certificated Shareholder or a JSE
Dematerialised Shareholder with "own name" registration
A Form of Proxy for use at the Extraordinary General Meeting by those
shareholders whose Ordinary Shares are admitted to the JSE accompanies this
document. The Form of Proxy should be completed and signed in accordance with
the instructions thereon and returned to the SA Registrar, as soon as
possible, but in any event so as to be received by no later than 15 May 2025
(or, if the Extraordinary General Meeting is adjourned or postponed, 48 hours
(excluding any part of a day that is not a working day) before the time fixed
for the adjourned or postponed meeting).
You are not required to take any action at present with respect to the
Proposed Rights Issue.
New Shares offered under the Proposed Rights Issue will be offered to
Shareholders pro rata to their existing shareholdings as at the relevant
Record Date.
By subscribing for the New Shares to be offered under the Prospectus, a
Shareholder will avoid a dilution in its percentage of their shareholding
resulting from the Proposed Rights Issue.
16. Importance of vote
As explained above, the Proposed Rights Issue is conditional, inter alia, upon
the passing of the Resolutions at the Extraordinary General Meeting.
If the Resolutions are not passed at the Extraordinary General Meeting, the
Proposed Rights Issue will not take place and the proceeds of the Proposed
Rights Issue will not be received by the Company.
Shareholders should note that, if the Company does not receive the proceeds of
the Proposed Rights Issue, the Company would have to seek other forms of
emergency funding. The Company is unable to provide any assurance that
alternative financing could be secured. Failure to secure alternative forms of
finance on commercially acceptable terms or at all could have a material
adverse effect on the Group's business, financial condition, prospects,
capital resources, cash flows, share price, liquidity, results and/or future
operations.
17. Recommendation of Directors
The Proposed Rights Issue is conditional, inter alia, upon the passing of all
of the Resolutions at the Extraordinary General Meeting including, without
limitation, the Rule 9 Waiver Resolution. Shareholders should be aware that,
if all of the Resolutions are not approved at the Extraordinary General
Meeting, the Proposed Rights Issue will not proceed.
The Independent Directors believe it is in the best interests of the Company
that the Rule 9 Waiver Resolution be passed and hereby recommend that
Independent Shareholders vote, or procure the vote, in favour of the Rule 9
Waiver Resolution. In reaching this decision, the Independent Directors have
taken into account that AIH does not currently intend to change (or to seek to
change) the strategic plans and operations of the Group nor to make any
changes to employment and/or the locations in which the Group operates.
Panmure Liberum, as the Company's independent financial adviser, has provided
formal advice to the Independent Directors that it considers the terms of
these proposals to be fair and reasonable and in the best interests of
Shareholders and the Company as a whole. In providing this advice, Panmure
Liberum has taken into account the Independent Directors' commercial
assessments as well as AIH's future intentions in relation to the Company (as
set out in paragraph 2.8 of Part II of this document).
In accordance with the requirements of the Takeover Code, AIH is not permitted
to vote on the Rule 9 Waiver Resolution in respect of its aggregate holding of
340,367,121 Ordinary Shares but has irrevocably undertaken to vote in favour
of the other Resolutions.
In accordance with the requirements of the Takeover Code, Rational, together
with the parties it represents as set out in more detail in paragraph 16 of
Part II, are not permitted to vote on the Rule 9 Waiver Resolution in respect
of their aggregate holdings of 180,896,490 Ordinary Shares but have
irrevocably undertaken to vote in favour of the other Resolutions.
The Independent Directors who hold Existing Shares have irrevocably undertaken
to vote in favour of all the Resolutions in respect of their own shareholdings
amounting to 27,315,661 Existing Shares (representing 2.34 per cent. of the
Existing Shares in issue as at the Latest Practicable Date).
Yours faithfully,
Bruce Cleaver
Chair
DEFINITIONS
The following definitions apply throughout this announcement, unless the
context requires otherwise:
Admission as the context so requires, AIM Admission and/or JSE Admission
Agreed Proportions in the case of AIH: 65.30 per cent.; in the case of Rational: 34.70 per cent.
AIH Assore International Holdings Limited, incorporated as a private company
limited by shares registered in England and Wales with company registration
number 12617478 on 21 May 2020. AIH's registered address is at 4 Walcote
Place, High Street, Winchester, United Kingdom, SO23 9AP
AIH Directors the directors of AIH at the date of this document whose names are set out on
paragraph 2.2 of Part II of this document
AIH Pre-Funding Agreement the agreement entered into between the Company and AIH dated 11 April 2025,
details of which are set out in paragraph 11.9 of Part II of this document
AIH UBO Directors the directors of AIH's indirect parent company, Assore Holdings Proprietary
Limited, at the date of this document, being each of: (1) Desmond Sacco; (2)
Patrick Sacco; (3) Charles Walters; (4) Bastiaan van Aswegen; (5) Sandra du
Toit; (6) Kieran Daly; (7) Mandla Tobela; (8) Eric Mackeown; (9) Sydney
Mhlarhi; and (10) Ross Davies
AIM the AIM Market, the multi-lateral trading facility operated by the London
Stock Exchange
AIM Admission admission of the Nil Paid Rights, the Fully Paid Rights and the New Shares (as
the case may be) to trading on AIM becoming effective in accordance with the
AIM Rules for Companies
AIM Rules or AIM Rules for Companies the AIM Rules for Companies, as published and amended from time to time by the
London Stock Exchange
Articles the existing articles of incorporation of the Company as at the date of this
document
Board or Directors the Company's directors, whose names appear on page 6 of this document
broker any person registered as a broking member (equities) in terms of the JSE
Listings Requirements and in accordance with the provisions of the SA
Financial Markets Act
Business Day a day (excluding Saturday, Sunday and public holidays) on which: (1) banks
generally are open for business in the City of London for the transaction of
normal banking business; (2) banks generally are open for business in South
Africa for the transaction of normal banking business; and (3) banks generally
are open for business in Guernsey for the transaction of normal banking
business
CDJ Campos De Joia Limitada, a 100 per cent. indirect subsidiary of the Company
certificated or certificated form means either: (1) Existing Shares that have not been Dematerialised in terms
of the requirements of Strate, title to which is represented by the Documents
of Title; or (2) in relation to a share or other security, a share or other
security which is not in uncertificated form (that is, not in CREST or Strate)
Circular or this document this circular to Shareholders, and all documents and annexes bound herein,
dated 11 April 2025
City Code or Takeover Code the City Code on Takeovers and Mergers issued from time to time by or on
behalf of the Panel on Takeovers and Mergers
Committed Shareholders those Shareholders (details of which are set out in paragraph 9 of Part II of
this document) who have entered into irrevocable undertakings to subscribe for
their Rights under the Proposed Rights Issue
Committed Shares the, in aggregate, 299,572,845 New Shares which the Committed Shareholders
have irrevocably undertaken to take up pursuant to the Proposed Rights Issue
Companies Act the Companies Act 2006 of England and Wales, as amended from time to time
Companies Law The Companies (Guernsey) Law, 2008 (as amended)
Company or Gemfields Gemfields Group Limited, a company incorporated under the Companies Law and
registered in Guernsey, with registered number 47656
CREST the system for the paperless settlement of trades in securities and the
holding of uncertificated securities in accordance with the CREST Regulations
operated by Euroclear
CREST Manual the rules governing the operation of CREST, consisting of the CREST Reference
Manual, CREST International Manual, CREST Central Counterparty Service Manual,
CREST Rules, Registrars Service Standards, Settlement Discipline Rules, CREST
CCSS Operations Manual, Daily Timetable, CREST Application Procedure and CREST
Glossary of Terms (all as defined in the CREST Glossary of Terms promulgated
by Euroclear on 15 July 1996, as amended from time to time)
CREST Member a person who has been admitted by Euroclear as a system member (as defined in
the CREST Regulations)
CREST Participant a person who is, in relation to CREST, a system- participant (as defined in
the CREST Regulations)
CREST Regulations the Uncertificated Securities (Guernsey) Regulations 2009
CREST Sponsor a CREST Participant admitted to CREST as a CREST Sponsor
CREST Sponsored Member a CREST Member admitted to CREST as a sponsored member
CSDP Central Securities Depository Participant, being a "participant" as defined in
Section 1 of the SA Financial Markets Act and appointed by individual
Shareholders for the purposes of, and in regard to, dematerialisation in terms
of the Financial Markets Act
Dematerialised or Dematerialisation the South African process by which securities which are evidenced by a
Document of Title are converted to securities that are held in collective
custody by a CSDP or its nominee in a separate central securities account and
are transferable by entry without a certificate or written instrument
Disclosure and Transparency Rules the disclosure guidance rules and transparency rules made by the FCA under
Part VI of FSMA (as set out in the FCA Handbook) as amended from time to time
Disclosure Period the period commencing on the date twelve months prior to the Latest
Practicable Date and ending on the Latest Practicable Date
Document of Title share certificates, certified transfer deeds, balance receipts or any other
documents of title to the Shares
ERM Eastern Ruby Mining, a subsidiary of the Company, 80 per cent. indirectly
owned by Company and 20 per cent. owned by Mr. Taibo Caetano Mucobora
Euroclear or Euroclear UK & International Euroclear UK & International Limited, the operator of CREST
EUWA the European Union (Withdrawal) Act 2018
Excluded Territories the United States, Australia, New Zealand, Canada, Hong Kong, Singapore and
Japan and any other jurisdiction (subject to certain limited exceptions) where
the Company is advised that the allotment or issue of the New Shares pursuant
to the Proposed Rights Issue would or may infringe the relevant laws and
regulations of such jurisdiction or would or may require the Company to obtain
any governmental or other consent or to effect any registration, filing or
other formality which, in the opinion of the Company, it would be unable to
comply with or is unduly onerous and Excluded Territory means any one of them
Executive Directors Sean Gilbertson and David Lovett
Existing Shares the 1,168,027,130 Ordinary Shares in issue on the Latest Practicable Date
Extraordinary General Meeting or Meeting the extraordinary general meeting of the Company convened for 10.00 a.m.
(London time) at 123 Victoria Street, Westminster, London, SW1E 6DE on 19 May
2025 by the Notice of Extraordinary General Meeting and any adjournment or
postponement thereof
Fabergé the brand "Fabergé" which is wholly-owned and controlled by the Group
FCA the Financial Conduct Authority of the United Kingdom acting in its capacity
as the competent authority for the purposes of Part VI of the FSMA
FCA Handbook the FCA's Handbook or Rules and Guidance, as amended from time to time
Financial Markets Act the South African Financial Markets Act, No. 19 of 2012, as amended from time
to time
Form of Instruction the form of instruction to be posted to each Qualifying South African
Shareholder who holds Existing Shares in certificated form, in respect of
their Letters of Allocation, reflecting the entitlement of that Qualifying
Shareholder to Nil Paid Rights if the Resolutions are approved
Forms of Proxy (1) the Guernsey form of proxy, for use by those shareholders whose Ordinary
Shares are admitted to AIM; and (2) the South African form of proxy, for use
by those Shareholders whose Ordinary Shares are admitted to the JSE,
accompanying this document for use at the Extraordinary General Meeting
FSMA the Financial Services and Markets Act 2000 of England and Wales (as amended)
Fully Paid Rights rights to acquire the New Shares fully paid
Group or Gemfields Group Gemfields and each of its direct and indirect subsidiaries from time to time
(where "subsidiary" shall have the meaning ascribed to it in the Companies
Act)
Independent Directors all of the Directors save for Keiran Daly and Patrick Sacco
Independent Shareholders Shareholders who are eligible to vote on the Rule 9 Waiver Resolution (being
all Shareholders other than AIH and Rational (including the parties that
Rational represents as set out in more detail in paragraph 16 of Part II))
Investec or JSE Sponsor Investec Bank Limited, acting through its investment banking division, a
public company incorporated under the laws of South Africa and the JSE Sponsor
to the Company in connection with the Proposed Rights Issue
Irrevocable Undertakings the undertakings, executed by the Committed Shareholders, pursuant
to which they have irrevocably agreed to: (1) vote in favour of the
Resolutions; and in certain cases, (2) subscribe for their Rights under the
Proposed Rights Issue, details of which are set out in paragraph 9 of Part II
of this document
ISIN the international securities identification number
issued share capital except where stated to the contrary, the issued share capital of the Company
(excluding treasury shares)
JSE the Johannesburg Stock Exchange, a licensed exchange operated by JSE Limited
JSE Admission the admission of Letters of Allocation and the New Shares (as the case may be)
to listing and trading on the General Segment of the JSE's Main Board
JSE Certificated Shareholders Shareholders who hold JSE Certificated Shares
JSE Certificated Shares Ordinary Shares which have not been surrendered for Dematerialisation in terms
of the requirements of Strate, and title to which is evidenced by a Document
of Title
JSE Dematerialised Shareholders Shareholders who hold JSE Dematerialised Shares
JSE Dematerialised Shares Ordinary Shares that have been Dematerialised
JSE Limited JSE Limited, a public company incorporated in accordance with the laws of
South Africa and licensed to operate an exchange in terms of the Financial
Markets Act
JSE Listings Requirements the JSE Limited Listings Requirements in force as at the Latest Practicable
Date
JSE Main Board the main board of the JSE
Kagem Kagem Mining Limited, a subsidiary of the Company, 75 per cent. indirectly
owned by Gemfields and 25 per cent. indirectly owned by the Government of the
Republic of Zambia;
Last Day to Trade the last day to trade Existing Shares on the JSE to qualify to participate in
the Rights Issue (cum Rights), being 22 May 2025
Latest Practicable Date 10 April 2025, being the latest practicable date prior to the date of this
document
Letter of Allocation a renounceable letter of allocation to be issued by the Company in electronic
form conferring Nil Paid Rights on a Qualifying South African Shareholder if
the Resolutions are approved
London Stock Exchange or LSE London Stock Exchange plc
Memorandum the memorandum of incorporation of the Company
MML Megaruma Mining Limitada, a subsidiary of the Company, 75 per cent. indirectly
owned by Company and 25 per cent. owned by EME Investments SA, Mozambique
MRM Montepuez Ruby Mining Limitada, a subsidiary of the Company, 75 per cent.
indirectly owned by Company and 25 per cent. owned by a local Mozambican
minority partner, Mwiriti Limitada
New Shares 556,203,396 new Ordinary Shares to be issued pursuant to the Proposed Rights
Issue
Nil Paid Rights in the case of Qualifying Shareholders (other than Qualifying South African
Shareholders), New Shares in nil paid form provisionally allotted to such
Qualifying Shareholders pursuant to the Proposed Rights Issue and, in the case
of Qualifying South African Shareholders, the right to subscribe for New
Shares at the SA Issue Price, as represented by Letters of Allocation
automatically credited to their CSDP or broker accounts or, in the case of
Qualifying South African Shareholders who hold their Shares in certificated
form, the account of the SA Registrar for the benefit of such Shareholder
Non-CREST Shareholders Shareholders whose Ordinary Shares are on the Company's Guernsey (AIM)
register and are held in certificated form
Non-Executive Director Bruce Cleaver; Patrick Sacco; Kieran Daly; Kwape Mmela; Mary Reilly; Simon
Scott
Notice of Extraordinary General Meeting or Notice the notice of the Extraordinary General Meeting set out at the end of this
document
NRL Nairoto Resources Limitada, a subsidiary of the Company, 75 per cent.
indirectly owned by the Company and 25 per cent. owned by a Mozambican
minority partner, Mwiriti Limitada
Ordinary Resolution a resolution, taken in accordance with the Articles and the Companies Law,
passed by a simple majority of the Shareholders, present or by proxy, at the
meeting, convened with the proper notice of the meeting having been provided
to the Shareholders
Ordinary Shares or Shares the ordinary shares with a par value of USD0.00001 each in the capital of the
Company
Overseas Shareholders Shareholders or Qualifying Shareholders, as the context so requires, who have
registered addresses, or who are located or resident, outside the United
Kingdom or South Africa
Panel or Takeover Panel means the Panel on Takeovers and Mergers of the United Kingdom
Panmure Liberum or Financial Adviser or AIM Nominated Adviser or co-ordinator Panmure Liberum Limited, the financial adviser, nominated adviser,
or Corporate Broker co-ordinator and corporate broker to the Company in connection with the
Proposed Rights Issue and the Resolutions
Participant ID the identification code or membership number used in CREST to identify a
particular CREST Member or CREST Participant
Pre-Funding Agreements each of the AIH Pre-Funding Agreement and the Rational Pre-Funding Agreement
Proposed Rights Issue the 10 New Shares for 21 Existing Shares rights issue which Gemfields proposes
to undertake, further details of which will be set out in the Prospectus
Prospectus the prospectus relating to Gemfields for the purpose of the Proposed Rights
Issue, which is expected to be published, subject to the passing of the
Resolutions and FCA approval, on or around 20 May 2025 and which will be
posted to Qualifying Shareholders and be made available on the Company's
website, its registered address and at the registered address of the JSE
Sponsor
Prospectus Regulation the UK version of the EU Prospectus Regulation as it forms part of the
domestic law of the United Kingdom by virtue of EUWA, as amended from time to
time
Prospectus Regulation Rules the Prospectus Regulation Rules made by the FCA as from time to time amended
and includes, where appropriate, relevant provisions of the Prospectus
Regulation as referred to or incorporated within the Prospectus Regulation
Rules
Provisional Allotment Letters the renounceable provisional allotment letters relating to the Proposed Rights
Issue, expected to be dispatched to Qualifying Non-CREST Shareholders if the
Resolutions are approved
Qualifying CREST Shareholder Shareholders (other than those resident in an Excluded Territory) whose
Ordinary Shares are on the Company's Guernsey (AIM) register at the relevant
Record Date and which are held in uncertificated form and held through CREST
Qualifying Non-CREST Shareholder Shareholders (other than those resident in an Excluded Territory) whose
Ordinary Shares are on the Company's Guernsey (AIM) register at the relevant
Record Date and which are in certificated form
Qualifying Shareholder a Qualifying Non-CREST Shareholder, Qualifying CREST Shareholder and/or
Qualifying South African Shareholder, as the case may be
Qualifying South African Shareholder Shareholders (other than those resident in an Excluded Territory) on the
Company's South African (JSE) register as at the relevant Record Date
Rand or ZAR South African rand, the lawful currency of South Africa
Rational Rational Expectations (Pty) Ltd, incorporated as a private company with
limited liability, registered in South Africa with registered number
1997/003025/07 and whose registered address is at Unit 203, Second Floor,
Paardevlei RI, 12 Gardner Williams Avenue, Paardevl, Somerset West, Western
Cape, 7130, South Africa
Rational Pre-Funding Agreement the agreement entered into between the Company and Rational dated 11 April
2025, details of which are set out in paragraph 11.10 of Part II of this
document
Record Date the record date(s) for participation in the Proposed Rights Issue, details of
which will be included in the Prospectus
Registers the register of members of the Company maintained in the United Kingdom and
the branch of the register maintained in South Africa
Registrars the UK Registrar and/or the SA Registrar, as the context so requires
Regulatory Information Service any of the services set out in the list of Primary Information Providers
maintained by the FCA
Relationship Agreement the agreement entered into between the Company and Rational dated 11 April
2025, details of which are set out in paragraph 11.11 of Part II of this
document
Resolutions the resolutions to be proposed at the Extraordinary General Meeting
Rights the Nil Paid Rights and the Fully Paid Rights (as the context so requires)
Rights Issue and Underwriting Agreement the rights issue and underwriting agreement dated 11 April 2025 entered into
between the Company, the Underwriters and Panmure Liberum relating to the
Proposed Rights Issue and the underwriting and more fully described in
paragraph 11.8 of Part II
RIS the Regulatory Information Service of London Stock Exchange
Rule 9 Rule 9 of the Takeover Code
Rule 9 Waiver the waiver granted by the Panel, conditional on the passing of the Rule 9
Waiver Resolution by Independent Shareholders, of any requirement under Rule 9
of the Takeover Code for AIH and its concert parties (individually and
collectively) to make a mandatory general offer to all Shareholders of the
Company, which would otherwise arise as a result of the AIH's participation
in, and underwriting of, the Proposed Rights Issue
Rule 9 Waiver Resolution resolution 1 to be proposed at the Extraordinary General Meeting as set out in
the Notice of Extraordinary General Meeting to approve the Rule 9 Waiver
SA Issue Price the price at which New Shares will be issued to Qualifying South African
Shareholders pursuant to the Proposed Rights Issue, being ZAR1.0686 per New
Share
SA Register the branch of the register of members of the Company maintained in South
Africa
SA Registrar Computershare Investor Services Proprietary Limited registration number
2004/003647/07, a private company duly incorporated in accordance with the
laws of South Africa
SENS the Stock Exchange News Service of the JSE
Shareholder Helpline the relevant helpline telephone number listed in the paragraph 22 of Part II
Shareholders holders of Existing Shares
South Africa the Republic of South Africa
South African Companies Act the South African Companies Act No. 71 of 2008 (as amended from time to time)
Special Resolution a resolution taken in accordance with the Articles and the Companies Law,
passed by a majority of not less than 75 per cent. of the votes of the
Shareholders, present or by proxy, at the meeting convened with the proper
notice of the meeting having been provided to the Shareholders
sterling or £ or GBP, or pence or p the lawful currency of the United Kingdom from time to time
Strate Strate Proprietary Limited, a private company incorporated in accordance with
the laws of South Africa, which is licensed as a registered central securities
depositary under the Financial Markets Act responsible for the electronic
custody and settlement system for transactions that take place on the JSE
UK Issue Price the price at which New Shares will be issued to Qualifying Shareholders (other
than Qualifying South African Shareholders) pursuant to the Proposed Rights
Issue, being 4.22 pence per New Share
UK Register the register of members of the Company maintained in the United Kingdom
UK Registrar Computershare Investor Services (Guernsey) Limited of 2nd Floor, Lefebvre
Place, Lefebvre Street, St Peter Port, Guernsey, GY1 2JP
uncertificated or in uncertificated form in respect of a Qualifying Shareholder other than a Qualifying South African
Shareholder, describes the form of a share held by such person in CREST; and
in respect of a Qualifying South African Shareholder describes the form of a
share held by such person not evidenced by a certificate or written
instrument, incorporated into Strate and entered and recorded in the Company's
South African sub-register in electronic form in terms of the Financial
Markets Act
Underwriters each of AIH and Rational
Underwriting Issue to the Underwriters Resolution resolution 3 as set out in the Notice of Extraordinary General Meeting to be
proposed at the Extraordinary General Meeting in connection with the issue of
New Shares to, inter alia, the Underwriters as contemplated by this Circular
and the Rights Issue and Underwriting Agreement pursuant to the Proposed
Rights Issue
Underwritten Shares the New Shares being underwritten by the Underwriters, which includes all New
Shares other than the New Shares for which the Underwriters have irrevocably
undertaken to subscribe
United Kingdom or UK the United Kingdom of Great Britain and Northern Ireland
United States or US the United States of America, its territories and possessions, any state of
the United States of America and the District of Columbia
US dollar(s) or dollar(s) or USD or US$ or $ or US cents United States dollars and cents, the lawful currency of the United States
GEMFIELDS
GEMFIELDS.COM (https://gemfields.com/) (https://gemfields.com/) | INVESTORS
(https://www.gemfieldsgroup.com/) (https://www.gemfieldsgroup.com/)
|FOUNDATION (https://www.gemfieldsfoundation.org/)
INSTAGRAM (https://www.instagram.com/gemfields/)
(https://www.instagram.com/gemfields/) | FACEBOOK
(https://www.facebook.com/Gemfields/) (https://www.facebook.com/Gemfields/)
| X (https://x.com/GemfieldsLtd?lang=en) | YOUTUBE
(https://www.youtube.com/channel/UCArCE0JFtakTP-tHq6v0KVg)
FABERGÉ
FABERGÉ.COM (https://www.faberge.com/) | INSTAGRAM
(https://www.instagram.com/officialfaberge/)
(https://www.instagram.com/officialfaberge/) | FACEBOOK
(https://www.facebook.com/OfficialFaberge)
(https://www.facebook.com/OfficialFaberge) | X (https://x.com/OfficialFaberge)
(https://x.com/OfficialFaberge) | YOUTUBE
(https://www.youtube.com/user/officialfaberge)
KAGEM MINING LINKEDIN (https://www.linkedin.com/company/kagem-mining-ltd)
MONTEPUEZ RUBY MINING LINKEDIN
(https://www.linkedin.com/company/montepuez-ruby-mining)
1 (#_ftnref1)
www.lvmh.com/en/publications/lvmh-achieves-a-solid-performance-despite-an-unfavorable-global-economic-environment
(http://www.lvmh.com/en/publications/lvmh-achieves-a-solid-performance-despite-an-unfavorable-global-economic-environment)
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