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Precious stones miner Gemfields Plc’s revenue for the first half more than doubled as demand for its emeralds mined in Zambia grew and per-carat prices continued to rise.
Gemfields, which produces about a fifth of the world’s rough emeralds, said revenue soared 137 percent to $65.7 million for the six months ended Dec. 31.
Last month, Gemfields reported record revenue of $36.5 million from its latest auction in Zambia.
The company saw an average price of $54 per carat in the auctions held in July last, while the average price hit a record high of $59.31 in the auctions held in February.
Gemfields had been selling output from its flagship Kagem mine around the world until the Zambian government said last April that all emeralds mined in the country must be auctioned at home.
“Auction prices, despite the location switching to Lusaka, have been strong as demand for Zambian emeralds strengthens,” JPMorgan Cazenove analyst Alexander Mees wrote in a note to clients.
The company has two more auctions scheduled before the close of its financial year on June 30.
Gemfields’ core earnings or earnings before interest, tax, depreciation and amortization (EBITDA) fell about 8 percent to $18 million due to costs related to its luxury jewellery brand Fabergé, and its Montepuez ruby deposit in Mozambique.
“Gemfields is a company that’s not just a mining company. We’re building our inventory, we’re building marketing and building demand,” Chief Executive Ian Harebottle told Reuters explaining the developmental costs.
The London-listed miner has long held ambitions of creating a stable world market for emeralds and polishing the gem’s image in the same way that Anglo American Plc -owned De Beers has championed diamonds from London’s Bond Street to China.
“H1 FY2014 revenue was up significantly, due to the timing of auctions and an increase in average selling prices, but costs also grew as marketing expenditures ramped up,” analyst Mees said.
Unit production costs rose to $0.85 per carat from $0.57 per carat a year earlier, the company said.
Production during the period fell about 28 percent to 10.4 million carats of emerald and beryl.
Gemfields shares were marginally down from Friday’s close at 35.6825 pence at 1041 GMT on the London Stock Exchange on Monday.
