Closed period can't have been ongoing for the last 4 months though! |
 Panmure have 16p target
Tom Price
Research Analyst
+44 (0) 20 3100 2085
tom.price@panmureliberum.com
In its year-end Operational Update, GEM has confirmed total
auction revenues of US$196m (known since final ruby sale,
12 Dec’24) vs US$241m in 2023 (-19%) following weak
sales in H2’24 (ruby volumes, emerald prices). 2024 finished
with a number challenges (Mozambique unrest, emerald
market commotion + royalties), however, things are on track
at MRM, and we’re encouraged that the Company has felt
confident enough to suggest the 15% export duty may be
revoked, which would be some welcome good news. BUY
maintained, TP 16p.
MRM business as usual since start of the year
Although operations were briefly halted at MRM in late-Dec following
disturbances at the mine, at a time of election turmoil across the country, since
the start of the year MRM has been mining / operating as usual, and
construction of the second processing plant remains ‘materially on budget and
on track’, for completion by end-June’25 (key GEM earnings driver).
Kagem sales paused
As flagged in the 23 Dec’24 ‘Strategy Update’, mining at Kagem has been
paused for up to 6 months as part of a cost cutting exercise, with some of the
ample stockpiles to be processed. But news that emerald exports have also
been halted following the reintroduction of a 15% export duty is a different
matter, and the statement that “Kagem anticipates that the duty may be
revoked and allow a commercial-quality emerald auction to go ahead in Q1
2025” suggests GEM is confident of some good news here.
No change to earnings
Net debt at end-2024 was US$80.5m, before auction receivables of
US$33.9m, and the Company has already guided that this could exceed
US$100m during 2025 as the capex spend at MRM is completed. Some
operational costs + capex are reported in the update, and we note these are
slightly higher than PL estimates (+US$7m and +US$6m respectively) – cost
pressures are being felt – however, we are not changing our numbers at this
stage given the unaudited nature of these figures (+potential royalty unwind =
modelling changes) and await the more detailed full year operational / financial
results due on Thursday 27 March 2025. BUY maintained, TP 16p.
United Kingdom | Resources: Mining & Commodities | Precious Stones | GEM LN
| Market Cap £62.5m | 31 January 2025^ BUY Target Price 16.0p
Share price 5.3p
at close on 30/01/2025
G |
Directors cannot buy in a closed period. |
& the net debt will be paid off how exactly? & no directors buying any stock? |
On my scoring of -5 to +5, I give Gemfields latest update a sold +2. |
Better than feared New wash plant on time and on budget and Mozambique calmer.
Should pick up from here. |
Hello, any holders here still? |
No directors buying still. Placing coming? |
Gemfields scales back emerald and ruby ambitions in southern Africa:
The world leader in coloured gemstones has scaled back operations in Zambia and Mozambique after disappointing auctions. In Madagascar, the British group is no longer welcome in the sapphire sector after it brought a corruption case against an adviser to Andry Rajoelina, president of Madagascar from 2009 to 2014.
The UK mining group looked set to become a key player in Madagascar's gemstone sector until its talks with the government were abruptly interrupted amid accusations of bribery and corruption. |
Covid low hit. 5p. |
Saracen it looks like this is going bust.
6p now. |
As a note - 74.38% of Gemfields shares are held by just 7 share holders with Assore holding 29.17%, Rational Expectations (Pty) 13.40% and Ophorst Van Marwijk Kooy Vermogensbeheer N.V. 9.79%. |
The Zambian woes have been mounting for Gemfields. Last month, the company said a claim had been filed against Kagem by rival miner, Grizzly Mining Limited, its sister company Pridegems Mines Limited, and proprietor Abdoulaye Ndiaye.
The claim related to “alleged unlawful occupation” by Kagem of an area known as Kamakanga House as well as “conspiracy to injure business reputation” and goodwill.
Gemfields and Kagem said these claims were entirely without merit.
“Kagem, which had previously filed its own claim in Zambia against Grizzly, Pridegems and others in mid-November 2024 in relation to another area known as the BISMA licence, is in the process of preparing a robust defence in conjunction with its legal advisers.” |
London-listed Gemfields has been blindsided by the imposition of a double-digit tax on the export of gemstones from Zambia.
This marks another blow to Gemfields after the miner warned investors on Christmas Eve that its operations had become the target of violent protests in Mozambique.
Growing instability in Mozambique is likely to put further pressure on the company to find ways to save money, which could include the sale of the iconic Faberge brand. |
Saracen will be getting all his Aussie clients to buy in here , he has the Midas touch you know 😂🤣😭📉 |
Gemfields tried to sell Faberge a few years ago and got no serious interest. The Russians are since blocked by sanctions which makes a sale even more unlikely. |
Faberge brand alone must be worth more than the current market cap? Thoughts saracen? |
Only solace is no placing announced |
I am full of the flu and your last post made me chuckle so much it was a welcome relief😁. A thumbs up 👍🏻 and seasons greetings! 🤣🤣🤣 |
Saracen will be getting all his Aussie clients to buy in here , he has the Midas touch you know |
saracen looks like almost everyone has sold out. Placing must be coming or it is going into liquidation. Stupid management not even buying here - wasted all that cash on capex. |
Wow down to 7p on high volume. |
Panmure Liberum note 20p target.
Huge recovery forecast for next and following years thanks to new ruby wash plant
trebling production and a return to better grades.
Patience required but upside much greater than the downside.
Chinese recovery will boost demand again when consumer optimism picks up. |
So what do people make of the legal case?
Almost back to Covid lows... |
It's a diabolical share price and where are the director/CEO/Chairman buys? |
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