Gemfields Reports Short-Term Cash Flow Challenges Amid Operational Disruptions

Gemfields Interim Trading Update: Lower Revenues, Operational Challenges, and Strategic Moves to Boost Liquidity

Gemfields has issued a trading update ahead of its interim results scheduled for September 26, following its operational update for the six months ended June 30 released in July. CEO Sean Gilbertson attributed the performance to several temporary challenges that resulted in short-term cash flow pressures.

“Gemstone production proved challenging during the period at both of our mines,” Gilbertson stated. “Montepuez Ruby Mining (MRM) saw a decline in premium ruby output, while Kagem Mining suspended mining operations at the end of 2024, operating only the wash plant until May this year, when two focused emerald production sites were reopened.”

For the period, Gemfields’ two main assets — MRM and Kagem Mining — generated revenues of $38.9 million and $21.1 million, respectively. Total auction revenues reached $60 million, significantly lower than the same period in 2024.

This decline was driven by reduced availability of premium carats at MRM, the implementation of a 15% export duty on emeralds in Zambia (subsequently revoked), and the suspension of mining at Kagem for much of the six months under review.

Despite these setbacks, pricing and demand for gemstones remained encouraging, the company noted.

In a bid to strengthen its financial position, Gemfields successfully completed a fully underwritten $30-million rights issue on June 13. Furthermore, post-period, it sold its entire interest in the luxury brand Fabergé for $50 million on August 29.

Of this amount, $44.7 million was received upon completion, with the remaining $5 million payable through quarterly royalty payments equal to 8% of Fabergé’s revenue starting July 1, 2026.

These transactions have improved Gemfields’ liquidity and working capital.

The company expects a net loss after tax of approximately $4.6 million for the period under review, compared with a net profit after tax of $13.7 million for the same period in the previous year.

The loss primarily reflects lower auction revenues due to a disrupted auction schedule, though strict cost control measures helped mitigate the impact.

“Gemfields has streamlined its operations, reduced costs, and is focused on achieving profitability across the group,” Gilbertson said. “We are optimistic about the prospects of increased ruby production through the second processing plant at MRM, and I look forward to seeing these measures deliver results in the second half of the year.”