Gemfields' ruby production to exceed expectations

Coloured gemstone miner Gemfields said production from its ruby mine would exceed expectations.

For the three months ended 30 June, the company reported that its 75% owned subsidiary Montepuez Ruby Mining in Mozambique produced 6.2m carats of ruby and corundum with an average grade of 75 carats per tonne.

Annual ruby and corundum production is anticipated to to be 10.3m carats and is about 2.3m carats ahead of expectations.

The Montepuez mine’s operating costs for the quarter increased by about 6% to $7.4m in comparison to the same period last year.

The Kagem emerald mine in Zambia produced produced 7.2m carats of emerald and beryl, which was down about 11% from the same period last year. The company, which last month secured a $65m financing facility, had a record $101.3m from an emerald auction.

Chief executive Ian Harebottle, who wants to expand annual production to 20m carats of rough rubies and more than 40m carats of rough emeralds within the next three years, said: "Demand for our products and the way in which they are presented continue to rise, achievable prices are on the increase and costs are well contained while the level of work and output has increased significantly.

"This is an exceptional achievement in itself, but is even more impressive when considered against a backdrop of market uncertainty in a number of jurisdictions and Gemfields' ever expanding operating footprint."

The AM listed company's luxury brand Faberge reported a strong financial year as sales were up 14% in the quarter, transactions more than doubled and total operating costs fell 25%.

Shares in Gemfields were up 9.12% to 40.38p at 1452 BST.