Gemfields recorded a loss in 2024 amid a weak demand for gemstones, borrowing money to keep the business afloat.
The miner expects to report a loss of $100.8 million for the year, compared with a loss of $2.8 million in 2023, it estimated in a trading update last week. The steeper loss is primarily the result of an impairment on its Kagem emerald mine in Zambia, which is temporarily shut, as well as a slowdown in demand for those gems due to heavy competition which caused an oversupply in the market. Lower-than-expected production of premium rubies at the miner’s Montepuez deposit in Mozambique also hit its bottom line. Revenue fell 19% to $212.9 million.
“Market conditions through 2024 were more challenging than we could have anticipated,” said Gemfields CEO Sean Gilbertson. “Revenues at both emerald and ruby auctions were materially lower than the group experienced in recent years.”
The company’s operations at Kagem remain paused, with emeralds produced only from the processing of stockpiled ore.
Gemfields is seeking approval from its shareholders to issue over 556 million new shares so it can raise approximately $30 million to continue to run its business, it said. The company was trying to sell some of its assets to raise funding, including its Fabergé business, but it was unable to complete a sale in time. Instead, the miner will borrow $13.4 million to provide an “immediate working capital injection,” it explained.
“We…confirmed we would consider options outside of the group for our wholly owned luxury jeweler Fabergé as a means of addressing a forecast near-term working capital shortfall,” Gilbertson added. “This work did not yield the certainty of funds necessary within the desired time period.”
Image: Polished rubies, emeralds and sapphires. (Gemfields)
