GEMFIELDS has returned tentatively to the gemstone market completing the first of five proposed small scale auctions of emeralds on November 6.
Adrian Banks, MD of product and sales at Gemfields, said in a statement that the revenue generated from the mini-auction was “not significant” compared to the $216m in sales generated by the firm in 2019, but the auction nonetheless enabled it to gauge logistics and sales “variations” ahead of additional sales events.
As with the diamond market, sales of precious gemstones have been heavily interrupted ever since Covid-19 disease was declared a pandemic by the World Health Organisation on March 11.
“The first in our series of five sequential online mini-auctions saw all four of the offered lots successfully sold,” said Banks. “Prices were robust and in some cases comfortably exceeded bids received in pre-Covid-19 auctions.”
“The fact that operations at the world’s largest mines for emerald and ruby have been suspended since March and April 2020, and may remain suspended until March 2021, is clearly also on people’s minds,” he said.
The five auctions are planned to cater for clients in Tel Aviv, Singapore and Jaipur. In terms of the first auction, buyers first inspected the goods in-person before participating in an online bidding process via a platform developed specifically for Gemfields.
Gemfields mines emeralds from its Kagem mine in Zambia. It also produces rubies from Montepuez, a mine in Mozambique. Both mines have been mothballed since the second quarter and were unlikely to resume operations in the current calendar year.
“Due to the ongoing uncertainty surrounding the Covid-19 pandemic, Gemfields remains unable to provide reliable guidance as to when it might return to its regular auction format and schedule,” the company said.
The auctions, if successful, may provide Gemfields some succour amid a devastating year which it started in a net cash position. In September, the London- and Johannesburg-listed firm reported a taxed loss of $56.7m or R959m for the six months ended June compared to a $12.4m (R177m) profit in 2019.
The outlook for the remainder of the year was “… bleaker rather than better for the remainder of 2020,” said Gemfields CEO, Sean Gilbertson at the time. Cash stood at $9.3m as of end-June. There had been only one fully-fledged emerald auction this year, in Lusaka during February, which generated $11.5m in sales revenue.
The remaining four mini-auctions will be completed on November 12 and 27 and December 4 and 11, the company said. Gemfields said it expected to announce the final and aggregated results of the five auctions on December 11.