Star Diamond acquires Buffalo Hills project in Alberta
Located approximately 400 kilometres northwest of Edmonton, the Buffalo Hills project includes 21 mineral leases covering 4,800 hectares.
Coloured gemstones miner Gemfields (LON: GEM) (JSE: GML) said on Wednesday it sold almost $69 million of mixed-quality rubies at its June auction, with 97% of the offering gone.
The auction marked the 10th anniversary of Gemfields’ first sale of rubies from the Montepuez mine in Mozambique, the world’s richest known deposit of the precious red stones. The operation is 75%-owned by Gemfields and 25% by its local partner, Mwiriti.
“While auction results should not be directly compared, our team is proud to have crossed the milestone of an average selling price of $300 per carat at this auction,” Adrian Banks, Gemfields’ MD of product and sales, said in the statement.
The total was still lower than the $80.4 million Gemfields collected around the same time last year and slightly below the $69.5 million obtained from December’s ruby sale.
The company, which also produces emeralds at the Kagem mine in Zambia, acknowledged the precious gemstones industry, particularly the diamond sector, continues to face headwinds.
The diamond industry faced substantial challenges last year, with a global decline in demand for roughs gemstones that affected prices.
Economic challenges in key markets included China and the US, coupled with increased supply of lab-made diamonds, prompted jewellery retailers to adopt a cautious approach. This impacted diamond and coloured gemstones sales, contributing to the overall profit decline of top producers.
Gemfields’ pre-tax profit nose-dived 86% last year, due partly to the cancellation of an emerald auction in November, a lower number of carats sold overall and a write-down in its platinum group metals investments.
The company, which has just appointed former De Beers chief executive Bruce Cleaver as chair and independent non-executive director, remains optimistic about the market direction.
“We’ve announced another strong result demonstrating the confidence that loyal customers have in our product offering and auction platform,” Banks said. “We hope this result provides good comfort to other stakeholders in our sector.”
Gemfields believes the coloured gemstone market is relatively safe from the emergence of lab-grown alternatives, as man-made rubies and emeralds have existed for more than 120 years and haven’t taken market share away from the mined gemstones segment.
Shares in the precious stones miner jumped more than 5% on the news and were trading at 13p in London mid-afternoon. The stock closed 4.9% higher Johannesburg, leaving Gemfields with a market capitalization of 3.49 billion South Africa rand (about $195m).
