Gemfields Share Discussion Threads

[saracen3] 01/4/2022 14:06

Spiked ? Making 3x our money.

[chickbait] 01/4/2022 13:29

To risky. I know you got spiked. I hope you get some money back.

[saracen3] 01/4/2022 13:27

Liberum note today,

Gemfields has rallied well this year, but is still on sub 2x EV/EBITDA with significant pricing upside, production growth, and a maiden dividend to help underpin the valuation. Big net cash balance sheet, supportive LT s/holder came on late last year highlighting the long-term value. And country risk in Mozambique (a key barrier to many) is unquestionably falling. Plenty of scope for the shares to sustain recent momentum and keep outperforming


On Montepuez mine
Expansion capex as previously guided. Tripling throughput of processing plant (200t per hour currently, building 400t next door)
Capex cost $55m, payback 12 months
This is bottleneck. No change needed for sort house
Also opens up further exploration in region. Looking to update MRM CPR with much broader coverage, should => upgrade LoM (and compensate for additional throughput post washplant expansion)
Not a tripling of revenue, but hopeful of doubling once full run-rate in 23 (lower grade ore)
Insurgency situation in Mozambique much more stable. Gas (Exxon, Total) could restart in summer
Slightly behind schedule, due to excess rain, but

FINANCIALS
Revenues “certainly hope repeatable” in FY22
But EBITDA/FCF might not be repeatable. 9m of mining in 21 not 12m, and capex lower. Opex probably $20-30m higher
Capex to increase “significantly” in 22
NB also Mozambique tax also paid 1y delayed
17% FCF margin in 2019, so the potential is clearly there
Mid-term revenue outlook - should do $250m MRM, then $110m Kagem => $360-380m + c$20m Faberge => c£400m revenues
“Disappointed if not above 400 in 23-24+”

CAPITAL ALLOCATION
$20m divi today not “special”; as quoted in RNS. Defined as such due to SA regulator quirk. Regular dividend, top of agenda. Implies 7% yield
At ZAR2.50 would consider buyback, but probably not up here
Don’t think ready for a formal divi / capital allocation policy. See the value, but unlikely for another 12 months

AUCTION PRICING AND DEMAND
Q4 auctions v strong. Only 1 month post Ukraine. Next auction underway in Jaipur (commercial for Kagem) – queus are long. No reason to see pricing or demand decay. Russia demand probably <1% of sales

FABERGE
Online sales are still seeing growth, but slowing. Can flex marketing spend in response to this
No sales network or production in Russia
Wholesale biz remains strong, no decline in end-sales to customer

SEDIBELO – IPO WHEELS IN MOTION, PROCEEDS WOULD BE RETURNED
Stake in private PGM mine in SA. Was in books at $24m, now written up to $37m (on FX rates and PGM basket price)
Hearing it is working on IPO, on NYSE, currently working with Evercore on market sounding, with JPM involved. Obv no guarantees
Dream would be cash sale, would then expect to return c80% straight to s/holders
Also talking to other s/holders re pre-IPO stake sale. Could sell part of stake then be locked up.


Thanks for reminding me to post this Chicken.

[chickbait] 01/4/2022 13:25

Are synthetic rubies valuable?
Image result for synthetic rubies
Price Point. Since natural rubies are rare, they're also expensive. Generally, synthetic rubies run about 20% cheaper than natural rubies do. Imitations and fakes tend to be 90% cheaper than natural rubies.

[saracen3] 01/4/2022 13:24

We may find out on Monday. Diamonds are up 40%, Shares trading at 2X EBITDA if you know what that is.

[chickbait] 01/4/2022 13:19

saracen. You are predicting sales to be up. What if sales are really down?

[saracen3] 31/3/2022 11:08

• Commenting on the diamond market, Botswana Diamonds says that it has “seen a rapid and dramatic recovery in recent months with prices rising by upwards of 40%” and the company says that if sanctions on the world’s largest supplier, Russia’s Alrosa, impact supply “then prices will rise further”.

Very positive for coloured gemstones,

[saracen3] 30/3/2022 17:06

Results of lower quality emerald auction likely for Monday.

Last such auction raised $23.1m at an average of $6.61 per carat.

Would expect a higher price this time but mix of emeralds is never quite the same.

Big auctions of emeralds in May and rubies in June not many weeks away.

On a yield of nearly 7% the shares of this unique company are a strong buy.

[saracen3] 28/3/2022 11:44

Good man, glad I could help. The Co is actually in the best shape ever and there are 3 auctions by the end of June which will reflect strong demand for coloured gemstones.

[gill17] 28/3/2022 11:23

Thanks for your help Saracen-I will have to did deep to find the paperwork on my Pallinghurst shares, but I've just put 3000 shares in my Sipp because I have always been a fan of Gemfields.

[saracen3] 28/3/2022 10:41

Joint broker Liberum note today.

Gemfields* (BUY, TP 25p from 23p) – Maiden dividend declared (7 pgs)
Company has declared its maiden dividend of $20m (best yield in the precious stones sector of 7.3%).
It has been a long-held ambition of the company to pay a dividend to shareholders. With the balance
sheet once again solid (net cash at Y/E with $63m), it can now pursue growth (2nd wash plant at MRM;
200% capacity lift) and return money to shareholders. Russia’s war has shown no negative impact on
precious stones market thus far. We expect strong prices to continue. Raising price target to 25p, 42%
upside.
Ben Davis, [e-mail], [phone]

[saracen3] 28/3/2022 09:43

Trading at a 5 year high but so cheap on a yield of 6.8$.

3 auctions by end June including one happening now.

[saracen3] 25/3/2022 19:12

The new wash plant will treble Ruby production from 2023. Result of emerald auction due on Friday or following Monday. Should trade in 20s next week.

[saracen3] 25/3/2022 09:42

Liberum raises target from 23p to 25p

[saracen3] 25/3/2022 07:55

1.3p dividend announced for a 7.1% yield Crazy cheap.

[saracen3] 24/3/2022 12:18

This is the link to the Investor Presentation at 8.30am tomorrow after the results

hxxps://investorpresentations.co.za/gemfields/events/32-shareholder-and-analyst-webcast

[chickbait] 22/3/2022 17:58

Market Summary
>
Gemfields Group Ltd
17.60 GBX
-27.33 (-61.40%)all time
22 Mar, 17:04 GMT • Disclaimer

[saracen3] 22/3/2022 16:44

Wow, being short is going to cost you.

If you think your posts are going to stop me commenting on Greatland you are greatly mistaken.

[chickbait] 22/3/2022 16:41

Lab Created Rubies
Lab made rubies have an identical chemical composition of natural rubies, consisting of aluminum oxide. The only difference is that these rubies are made in a controlled environment. This means that these gemstones can be made with all of their desired attributes and exclude inclusions. Ultimately, lab made rubies are virtually identical to natural rubies in terms of chemical composition, optical, and physical properties.

[chickbait] 22/3/2022 16:39

hxxps://www.withclarity.com/education/gemstone-education/ruby/natural-vs-lab-ruby

Natural vs. Lab Created Ruby
Arguments for lab created vs natural ruby gemstones and jewelry is well documented. For those deciding between which to purchase, take a look at our guide for the facts of each and decide what works best for you.


Natural rubies
Are the ones that were formed over time by the components of the earth crust. Natural rubies are found in nature and require no other treatment than to be cut and polished. These are the real stones with high price tags. They vary widely due to their imperfections and impurities. This is due to the fact their process of formation is not controlled or not under moderation conditions. Often, different forms and types of gemstones can be found in just one dig. A good representation of this can be a find of smoky quartz together with amethyst and citrine. Although they are all crystals, they all possess their distinct impurities which express different colors.


Synthetic rubies
Are created in a laboratory under controlled and monitored conditions. The process is started with a “seed” given by a natural ruby. The growth and creation are precisely regulated that the resulting gemstones have the desired attributes. In laboratory gemstones, the irrelevant inclusions and impurities that are often found in natural gems are not present in laboratory ones. Still, these lab created rubies possess the same chemical, physical, and optical characteristics as the naturally occurring rubies. This fact makes them seem “too” perfect. Some of the more famous laboratory gemstones are sapphires and emeralds.


Genuine rubies
Are stones that started as natural stones but were treated in one or more media which has influenced their appearance. These types of treatments are often used to improve the appearance of stones towards the desired color or to make them luster.

The type of rubies you want and prefer for yourself greatly depends on the money you have to yourself. Natural rubies are costly than the lab created ones. The value of natural ones tend to appreciate with time and the majority of investors and collectors tend to prefer authentic rubies to laboratory ones.


Lab-made Rubies
Give a more affordable option for jewelry lovers to own more. The perfectness factor is undoubtedly an attractive index that draws lots of attention. This factor adds to the beauty of the jewelry as well.


ALL ABOUT NATURAL VERSUS LAB RUBIES
Buying gemstones can be a very difficult process, especially when the deal involves some of the rather unscrupulous sellers of nowadays. Hence, how would you know if a ruby is natural or lab created? It is always better if the decision is made by oneself but if you cannot, then make an inquiry.

A reputable jeweler or seller should be honest with you concerning the origin of the stone. In case they do not know or they are not willing to say, you may consider going somewhere else to make your purchase.

Although the differences between the two pieces of jewelry may not be readily visible on physical examination, there may exist vivid and significant differences between the pieces. The choice between a real and otherwise jewelry relies solemnly on your budget and preferences. Below are some of the necessary terms you should understand in an attempt to differentiate between a real and laboratory rubies.

[chickbait] 22/3/2022 16:23

Gemfields back on Aim at similar grade - Investors' Chronicle › 2020/02/17 › ge...
18 Feb 2020 — Gemfields (GEM) has returned to Aim more than two years after it exited ... we get both bad grade, and also poor quality crystals,” he said.