News

Nov 14, 2017

Gemfields’ Singapore Auction of Montepuez Rubies Fetches Record US$ 55 Million

Pallinghurst Resources Ltd has reported that its 100% subsidiary, Gemfields plc achieved record results at the recent auction of rough rubies from the Montepuez mine in Mozambique, with revenues reaching US$ 54.96 million, the highest ever achieved at any Gemfields auction. This was the 9th auction of rough rubies from Montepuez.

The mine comes under the Montepuez Ruby Mining Limitada, which is 75% owned by Gemfields and 25% by local partner Mwiriti Limitada.

Pallinghurst reported that of the 76 lots offered, 71 were sold (93%) and an average price of US$ 90.81 per carat was realised. The Company reported that this was a 49% premium to the last auction of similar qualities in June 2017.

A total of 605,229 carats were sold out of the 682,508 carats offered (89%) at the auction, which saw 54 companies placing bids.

The goods included high, medium and commercial grade rough rubies in both untreated and treated form. All treated lots were offered using industry-accepted treatment and on a fully disclosed basis.

The nine Montepuez auctions held since June 2014 have generated US$335 million in aggregate revenues, Pallinghurst said.

The Company reported that given that the quality mix offered at this auction comprised a blend of varying qualities and sizes of material, a direct top-line comparison with the results of previous auctions is not feasible. However, it said that on a direct a quality-for-quality basis however, the per carat prices demonstrated strong demand, and reflected Gemfields’ experiences at recent industry events.

Sean Gilbertson, CEO of Gemfields, commented: “The strong revenues from this auction provide a solid boost to the Gemfields cash position and underscore the fact that market demand for responsibly sourced rubies from Mozambique remains in fine fettle.”

The proceeds of this auction will be repatriated to MRM in Mozambique, with the production tax due to the Government of Mozambique being paid on the full sales price achieved at the auction, Pallinghurst reported.