Suspension of Mozambican ruby auctions will affect performance of Gemfields

8 April 2020

The financial performance of Gemfields may this year be significantly affected by the Covid-19 pandemic, which has led to the suspension of auctions of precious stones, which accounted for 93% of the company’s turnover in 2019, Gemfields’ chief executive Sean Gilbertson.

The CEO was commenting on the company’s results in 2019, in which earnings before interest, taxes, depreciation and amortization (EBITDA) registered an increase of slightly more than one-third to US$80.9 million.

“Although 2019 was very positive for the company, the Covid-19 pandemic will have an impact on our operational and financial performance in 2020,” he said, noting that the restrictions on the movement of people have forced the suspension of auctions of rubies mined in Mozambique and of emeralds “for an unknown period of time.”

The company had cash of US$25.4 million at the end of December 2019, an annual increase of 159% due to the sale of its stake in the Júpiter mines for US$30.4 million , but the need to suspend the auctions  may lead to this amount “disappearing.”

Gilbertson also mentioned the invasion by illegal miners of the ruby concession area that the company has in Cabo Delgado province, northern Mozambique, as another problem in addition to Covid-19.

The company reported last February that illegal miners had destroyed equipment and attacked workers.

“Montepuez Ruby Mining Limited is in touch with the Mozambican authorities so that they take measures against the financiers, facilitators and unions that are behind the illegal trade of rubies,” said the chief executive of Gemfields. (macauhub)