REG - Gemfields Group Ltd - Strategic Update

GemfieldsAnnouncement

23/12/2024 07:00

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20241223:nRSW0229Ra&default-theme=true

RNS Number : 0229R  Gemfields Group Limited  23 December 2024

Incorporated in Guernsey. Guernsey registration number: 47656

South African external company registration number: 2009/012636/10

Share code on JSE:GML / AIM:GEM

    ISIN: GG00BG0KTL52   |   LEI: 21380017GAVXTCYS5R31

("Gemfields" or the "Group" or the "Company")

 

Strategic Update

LONDON, 23 DECEMBER 2024

Following Gemfields' most recent emerald and ruby auctions (the results of
which were published on 22 November and 12 December 2024 respectively), the
Group announces that it has taken, and will continue to undertake, actions to
cut costs and streamline business activity amid four key challenges being
encountered concurrently, while maintaining focus on the Group's principal
growth project, completion of the second ruby processing plant at Montepuez
Ruby Mining Limitada in Mozambique ("MRM").

Strategic Update

Gemfields' most recent emerald and ruby auctions have earned revenues of USD
16.1 million and USD 46.2 million respectively, as previously announced. These
revenues are materially lower than the company has experienced in recent years
due to three principal factors:

a)    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;

b)   lower production of premium rubies at MRM; and

c)    a weaker luxury and gemstone market generally given economic
difficulties in China and geopolitical turbulence.

The fourth challenge the Company faces relates to the ongoing civil unrest and
associated supply chain and logistics interruptions in Mozambique as a result
of the contested general election. While mining operations at MRM have thus
far remained unaffected, the overall operating risk profile has increased with
the Company's priority remaining the safety and security of Gemfields'
employees, contractors and community members.

Gemfields regards the construction of the second ruby processing plant at MRM
as a critical project to increase premium ruby production and deliver
additional revenue for the Group by the end of 2025. Construction presently
remains materially on budget and on schedule for completion by the end of H1
2025 and Gemfields is working closely with its partners to deliver this
project as planned.

As a result of these four challenges, each of which management view as being
transient, Gemfields is enacting Group-wide actions to cut costs and
streamline the business. These actions include:

i.     suspending, for a period expected to be up to 6 months, all mining
at Kagem Mining Limited ("Kagem"), the emerald mine in Zambia which is 75%
owned by Gemfields. 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
(https://www.gemfieldsgroup.com/nairoto-gold-project-maiden-inferred-mineral-resource-estimate-for-tl5-and-independent-technical-report-released/)
("NRL"), the gold project situated north of MRM and seeking potential buyers.
Interested parties should contact preciousmetals@gemfields.com
(mailto:preciousmetals@gemfields.com) ;

iv.   assessing strategic options in respect of Fabergé
(https://www.faberge.com/) , the iconic luxury-brand owned by the Gemfields
Group; and

v.    targeted rationalisation of operations and businesses across the
Group.

Gemfields continues to closely monitor its working capital as it navigates the
prevailing challenges. As stated in the 2024 Interim Report, management
remains prepared to take additional cost reduction measures and pursue
external funding options as may be required.

 

-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)

 

For any press enquiries, please contact Helena and Albertina:
helena.choudhury@gemfields.com (mailto:helena.choudhury@gemfields.com) /
albertina.namburete@gemfields.com (mailto:albertina.namburete@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").

 

 

 

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 / Kieron Hodgson / Amrit Mahbubani / John More
                                   T: +44(0) 20 3100 2222
 GEMFIELDS HEAD OFFICE PR, 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.

 

 

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)

 

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  UPDFLLFLZLLBFBE