Pallinghurst Resources Ltd (PRL), which earlier this year successfully acquired full control of coloured gemstone mining company Gemfields as part of its planned transformation into a long-life operating mining company, has reported a Total Comprehensive Loss of US$ 81 million for the six month period ending June 30, 2017.

Releasing its interim figures, the miner said that almost all of the loss is due to unrealised write downs in asset valuations, with the Gemfields’ valuation having fallen significantly as its share price has drastically declined since end 2016. This acquisition accounts for a 79% share of the loss as a result of write down of the investment by US$ 64 million.

Despite this, PRL stated that the acquisition represents an attractive value proposition for shareholders and it still has the vision of the Company becoming “the coloured gemstones equivalent of De Beers”.

Arne H. Frandsen, CEO stated that “the integration is well advanced and significant cost benefits are being realised”.

Giving details of the operations under Gemfields plc, PRL said the Company experienced a challenging period, with auction revenues declining by 24% to US$ 133 million in H1 (H1 2017 US$ 174 million), primarily on account of a more than 37% fall in gem production at Kagem to 19 million carats, the lowest figure in seven years. Emerald prices remained robust, but lower production, especially of high value gems, meant Kagem’s auction revenues fell 53% to US$ 47.5 million (H1 2016: US$ 101.4 million). Ruby production at Montepuez fell b y 14%, PRL said

As earlier reported, PRL is undertaking a thorough review and analysis of the operations, including processes, plans, budgets and financial position of Gemfields. Certain operational improvements have already been made at Kagem and an encouraging increase in the recovery of premium emeralds has already been seen. A selection of these will be offered as part of the predominantly high-quality emerald auction in Lusaka, Zambia from October 2-5, 2017.