Gemfields Share Discussion Threads

[43rick] 14/9/2015 20:21

From the Motley Fool - apparently today

"One mining stock that does appear to be worth buying right now is Gemfields (LSE:GEM). It has been a star performer in 2015, with its share price rising by 34% since the turn of the year. This is at least partly because of the company returning to profitability in 2014 and being forecast to increase its earnings by 37% in the current year, followed by further growth of 144% next year.

This rate of growth is likely to continue to catalyse investor sentiment - especially since much of the mining sector is undergoing a period of financial decline at the present time. Furthermore, Gemfields continues to offer a relatively wide margin of safety despite its upbeat growth forecasts, with it trading on a price to earnings growth (PEG) ratio of just 0.1. This indicates that further share price gains are very much on the cards."

[hazl] 11/9/2015 14:15

I like the 'considered but cautious' bit!

[hazl] 10/9/2015 07:52

"Gemfields is delighted to announce its entry into Colombia, home to some of history's most legendary emerald mines and a country with tremendous potential. The proposed acquisitions will require further work and additional exploration before any meaningful production commences but they are clearly in line with our strategy of expanding Gemfields' global footprint in a considered yet cautious fashion. The acquisitions offer exciting green- and brownfield growth opportunities over the medium to longer term.'

rns

[nehpets81] 08/9/2015 13:32

Yes, quite a robust set of prices achieved here when the Chinese slow-down and the decline in diamond prices is considered. I wonder how much of that was due to the move back to Singapore?

Does anyone know who is the biggest consumer of emeralds/rubies?

[43rick] 07/9/2015 07:09

Today's RNS - Yet another marvellous emerald auction - and it is back to the International market in Singapore! Amethyst prices up significantly too...

Ian Harebottle, CEO of Gemfields, commented:

"Our Singapore auction has delivered another very strong result for our Kagem emeralds. With 98% of the emeralds sold, it is very pleasing indeed to see Zambian emeralds continuing to enjoy such firm demand, aided by our return to running an auction in Singapore. Despite severely depressed global commodity prices, well-documented difficulties in the diamond sector and recent volatility across international financial markets, emerald prices remain as robust as ever. The counter-cyclicality often associated with precious gemstones, and their reputation as a store of value in turbulent times, have shone through. In addition it is pleasing to see the prices received for amethyst increase markedly since the last auction in February. I'm delighted that these results underscore the intended vision and trajectory for coloured gemstones, and for Gemfields.

Kagem is a partnership between the Zambian Government and Gemfields, and we'd like to thank the Government for their vision and support in internationalising the Zambian emerald industry and for supporting an 'international auction circuit' that will see Lusaka remain one of the key hubs for hosting emerald auctions in order to ensure we reach an expanded client base. "

[hazl] 24/8/2015 09:00

Not very much volume....
IMO

[hazl] 21/8/2015 08:49

I have a great deal of faith in this company as well goldminer.
Quality will out.

[goldminer70] 19/8/2015 08:04

On 22nd September 2014 Gem fields announced the results for the financial year to 30th June 2013-14. These showed that a revenue (turnover) of £94.00M they made a profit £21.39M. The Share Price closed on that date was 51.50p
On 9th March 2015 Gemfields announced the interim results for the period 30th June 2014 to 31st December 2015. These showed that a revenue (turnover) for the six months of £66.40M they made a profit £27.92M. So Gemfields made £6.53M more profit in the first six months than the previous twelve months. This barely moved the share price it was though the market did not believe the interim figures. Although the increase in activity was substantiated by the Market Updates.
In the six months in the second half of the year there have been three auctions which generated sales of £38.4M. Auctions only represent part of the total revenue of the Company
The two Market Updates for the third quarter and fourth quarter generally show increased production levels on the previous quarters and the corresponding periods in the previous years.
So taking all these factors in account I am estimating that in September 2015 the results will show revenue of £120.0M (up 24%) and profit of £50.0M (up 134%).
Gemfields is selling at a PE of 53.7 and is capitalised at £353.6M. If the profit does go up to £50M the PE will come down to a lowly 20 which is ridiculous for a company with profits increasing at such a rate
When results are analysed I believe the share price will go up over £1 by Christmas.
Goldminer70

[43rick] 14/8/2015 11:40

So the next higher quality Kagem emeralds auction to look forward to is at the end of this month -

from the recent market update RNS -

"Gemfields' next auction of predominantly higher quality rough emerald from its Kagem mine is scheduled to take place from 31 August to 4 September 2015."

Large buys at 64.75p yesterday pm has led to today's modest tick up.

[proactivest] 12/8/2015 14:22

Ian Harebottle, chief executive of coloured gemstone specialist Gemfields (LON:GEM), says cautious and prudent growth will lead to long-term success for the company in China, the world’s major consumer of luxury goods.
Video interview with CEO Harebottle


Although the People’s Republic is not officially in recession - its growth rate has been slowing leading to a devaluation of the yuan.

“Our biggest challenge is the global economy. China has been a very good consumer of luxury goods for a while, so we are aware of what’s going on in that economy and the potential knock on effects globally.”

Gemfields, for whom Mila Kunis acts as brand ambassador, is one of the stand-out performers in the mining space on the London market. The firm owns luxury jewellery brand Faberge.

Today, it reported encouraging figures on production and grades, with cost increases offset by the increased scale of exploration, processing and mining activities at both its Kagem and Montepuez mines.

[hazl] 12/8/2015 12:24

yes goldminer pleased with that

[ftseproactive] 12/8/2015 12:12

Proactive speaks to Gemfields boss Ian Harebottle.....

[goldminer70] 12/8/2015 08:34

Gemfields issued their market update this morning. See their website for full details. Most of the figures are good. Ian Harbottle commented
“Gemfields is pleased to report on another solid production quarter with output at each of its Kagem and Montepuez mining operations generating steady increases in production volumes, associated with improved overall mining efficiencies, and in support of the Company’s commitment to providing the downstream luxury market place with a consistent supply of responsibly sourced coloured gemstones. The 30.1 million carats of emerald and beryl produced at Kagem for the full year is the second highest level of production since Gemfields took control of Kagem in 2008 and underpins the increasing expertise we have built in the gemstone sector.
Market demand for coloured gemstones remains firm, with our Mozambican rubies having enjoyed considerable success at each of the two ruby auctions held during the period. The exciting projections published in the Maiden JORC Resource and Reserves Statement for Montepuez was a further milestone event for Gemfields, and a pivotal moment for the global ruby industry, as we continue to unlock the value of these assets by scaling up production and delivering a concerted programme of market education and communication. These successes are likely to be further supported by the Company’s ongoing exploration and growth initiatives being carried out in numerous locations across the globe, as well as the continued improvements and pleasing results of Fabergé over the past year. We look forward to our next auction of higher quality emeralds, scheduled to take place later this month.”

[goldminer70] 09/8/2015 11:48

The last 4 Market Updates have been
4Q 2013-14 Thursday 7th Aug 2014
1Q 2014-15 Tuesday 11th Nov 2014
2Q 2014-15 Tuesday 17th Feb 2015
3Q 2014-15 Tuesday 14th Apr 2015

As GEM seems to favour Tuesdays perhaps the next Market Update will read
4Q 2014-15 Tuesday 11th Aug 2015

Last year the final full Year Results were announced Monday 8th September
We look forward to seeing the final results for 2014-15 early September

Goldminer70

[hazl] 04/8/2015 14:51

We can never be complacent,it's true but Gemfields grades its gems according to which sale is currently in progress.
Top quality is always going to fetch a certain price.
Whilst things go in and out of fashion at least the products aren't perishable and can be reinvented in different jewellery I imagine.
I guess it depends whether you are in for the long term or not.
It has done particularly well compared to its peers.
The director did sell some at a height.
Each factor has to be considered as well as the general market.
For me,I m letting the modest number of shares I have run on their profits.

[goldminer70] 02/8/2015 15:12

hazl
I agree that some commentators seem to think gemstones are commodity like iron ore, gold or oil, which has a fixed price per carat.
In his article Questor stated ".....Gemfields latest auction in Singapore showed falling prices......" and "Commodity, precious metal and gemstone prices are all falling..."
So much depends on quality of the ruby, which not apply to an ingot of gold or a tonne of iron ore.
As yet I haven't detected a fall in prices of emeralds and rubies the same as oil, gold or iron ore, but I can see it might happen.

[hazl] 31/7/2015 15:02

I wrote that post before I read the previous posts
Post 784 is either displaying complete ignorance of the products and the company itself,or envy,in my opinion and I actually found it quite amusing.

To liken us to iron-ore is laughable....you couldn't get more different products!
Iron-ore is all about high-growth in the economy....gems are about the retaining of wealth.
43 rick how right you are about post 357 by the same poster..... its long time to be wrong......

IMO

[hazl] 31/7/2015 14:50

You need only look at the rest of the Gem miners to see that Gemfields is streaks ahead.
The sentiment behind jewellery is often immense, as uncle john has just said and quality sells; intellectual property can be very valuable indeed.

The word Faberge conjures up nostalgia,quality and intrigue,bundled together with a large dose of history that just cannot be emulated in a modern product.
Perhaps because gemstones themselves are hundreds of years old and sourced in such specific regions they retain their sense of mystery.
For me, Gemfields has something special and I really do enjoy owning this share!

IMO

[uncle john] 31/7/2015 13:16

The problem with 2Cageys analysis about increasing supply and consequent lowering of price is that he overlooks the added value created in designing and manufacturing an item of jewellery.
Rough prices, polished and cut stones, and sale to consumer prices are all vastly different.
In my view, given a stone of a certain colour and size it is the standard of design that makes the biggest difference. The imagination and flair of the designer is key to successfully building a brand that engenders loyalty in consumers.

[43rick] 31/7/2015 12:31

I have been in since 20p post Faberge acquisition.

Interesting to see 2Cagey's 3rd post out of a total of 6 - post 357 on this board - startling example of how wrong some predictions can be re gemfields and auctions of Kagem stones being confined to Zambia.

Gemfields' CEO is very well aware that investors are keen to receive dividends but at present he is growing the company and therefore needs that cash - investors are likely to be content as the share price is growing as the revenues increase. Part of that cash is being spent on Faberge - Faberge is in the business plan, along with the grading process that takes place for the auctions, to drive up the demand for coloured gemstones.

see for the latest CEO interview and the ruby mine JORC

[2cagey] 31/7/2015 12:00

To all you excited posters, have you given any thought to the fact that Gemstones are valuable because of the fact that they are rare. Gemfield's Ruby production is presently catering to a market void and the production targets outlined in the JORC announcement are huge and will in themselves if realized create a downward pressure on prices obtainable as saturation of the market by Gemfields itself occurs. Public company policies of never ending increases in production quantities are not the way to go with gemstones and close reading of Gemfields actual net profit leaves plenty of room to doubt that they would have the resources to withhold stock like DeBeers to uphold prices for any length of time. The company's announcements make big of the many millions in gross receipts from Auctions, however apart from the dividend that Kagem paid to Gemfields itself and the Zambian Government recently, dividends to shareholders seems to be far from the thoughts of the CEO. If you think that it can't or won't happen then take a look at what has happened to the Giants of Iron Ore as prices have collapsed from under their empires and the gemstone markets are much more fickle than that of base metals. In the meantime good luck to day traders sweating on the next exciting announcement.

[43rick] 31/7/2015 11:12

Looks as if someone is keen to build a stake in GEM - maybe buying about 800k at 65p on Tuesday, about 100k yesterday and 50k this morning - now buying at 68p. Not much on the ask on level 2. DYOR.

What is reassuring is that the peak is being scaled not so much with auction results in view, which always create buying before the news and selling after, but more IMO in response to that ruby JORC - minimum mine life 21 years - and the consequent significant raising of brokers' targets and tipsters comments.

Market update for the quarter to 30th June due about a week into August if the last two years' timetable is followed.
Production figures, unit operating costs, Faberge performance etc - see



for this time last year.

[goldminer70] 27/7/2015 22:02

The article by Questor was quite good but I couldn't understand why he was so pessimistic about this years expected profit.
He said "The lower ruby prices mean pre-tax profits are expected to fall from $36.1m (£23M) to $27.5M in the year to June"
Note $27.5m is £17.5m

According to my records Finncap estimate £33.63m profit,Investec £34.95m, Numis£33.83m profit, Panmure Gordon £27.78m profit, Peel Hunt £20.36m profit,
Average of 5 £32.26m i.e. Nearly double Questors

My guesses show
2013-14 1st Half £4.72m profit, £39.82m Revenue
2013-14 2nd Half £16.58m profit, £84.18m Revenue
2013-14 Total £21.3m profit, £94.00m Revenue

2014-15 1st Half £27.92m profit, £66.43m Revenue ~ Interim report
2014-15 2nd Half £25.00m profit, £126.00m Revenue ~ Last Year +50%
2014-15 Total £53m profit, £192m Revenue
i.e triple Questor and up 50% on the 5 brokers

Some will say my second half guesses are wildly optimistic but the Market Report Jan-Mar said production was up in emerald mining, ruby mining and Faberge Sales. We will get the market report for the quarter Apr-Jun in the next fortnight and the true full year results in September.
Goldminer 70

[43rick] 27/7/2015 20:10

Upgrade from Numis today from 80p to 90p.

[43rick] 26/7/2015 22:20

3 brokers raised their targets on 22nd July -

hxxp://sharedealing.nandp.co.uk/broker-views/GEM/Gemfields

The largest increase, as a result of that ruby JORC RNS on the 22nd, was Investec - 69.9p up to 90p