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Wednesday, March 30, 2011

Gemfields Emerald Auction Fetches $9.9 Million

Prices for lower-quality rough emeralds nearly tripled during the past year, according to Gemfields Plc., which recently held an auction of the precious gem from its Kagem mine in Zambia.

The mining giant’s auction of low quality emeralds from its wholly owned on March 10-14 in Jaipur, India, (where it owns a cutting and polishing facility) took in 77 cents per carat, a 148 percent increase from 31 cents per carat received in a similar auction in March 2010.

“This provides a clear indication of robust growth in both prices and demand for emeralds in general, and Gemfields’ ethical emeralds in particular, across all regions and all sectors,” the company said in a statement.

Of the 48 companies invited to attend the auction, 44 placed bids for the material on offer, Gemfields said. The auction saw 16.83 million carats placed on offer, with 12.98 million carats being sold, generating record lower quality auction sales of $9.9 million.

The three auctions held in the current financial year yielded $37 million in aggregate revenues, while all six auctions held since July 2009 have generated $55.7 million in combined revenue for Gemfields.

London-based Gemfields is the only mining company in the world that has incorporated a mine-to-market strategy for the emerald industry. Under the plan, emeralds would come from a single source (the Kagem mine) so the origin of each stone can be traced from the mine to the retail jeweler. In addition, the company is trying to produce emeralds in a way that adheres to fair-trade practices and in accordance with environmental, social and safety standards.

“Gemfields is naturally very pleased with the results in Jaipur,” said Ian Harebottle, Gemfields chief executive . “The overwhelming interest in attending Gemfields' auctions provides sound evidence of an increase in demand for our products across all grades and all markets.”

The Jaipur auction was also used as a platform to test the levels of demand for rough amethyst derived from Gemfields' 50 percent owned Kariba amethyst mine in Zambia. Gemfields said the results were encouraging and it expects to sell significant quantities of the gem.

Gemfields' next auction of predominantly higher quality rough emeralds is scheduled for July 2011.

The last of these, held in Johannesburg in early December 2010, achieved revenue of $19.6 million, exceeding the $18.7 million generated from the three previous emerald auctions held during the current 2009/10 financial year.

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