JOHANNESBURG (miningweekly.com) – Significant operational progress at Aim-listed Gemfields’ 75%-owned mining assets in Zambia and Mozambique have translated into strong financial output in the year ended June 30.

The gemstone miner on Monday posted a profit after tax of $23.5-million for the year under review, up 91% on the $12.3-million recorded in the prior year.

Basic earnings a share increased from $0.01 in 2015 to $0.02 in the 2016 financial year.

The group’s earnings before interest, taxes, depreciation and amortisation (Ebitda) ticked up from $64.4-million in the preceding financial year to $69.4-million in the year under review.

Further, Gemfields’ operating cash flow generation rose by 97% to $64.1-million during the 12 months to June 30.

During the 2016 financial year, revenue also increased to $193.1-million, from the $171.4-million achieved in 2015.

“Over the past five years, Gemfields’ revenue has increased 380% and total revenue generated since the company's first auction in 2008 has reached $717.6-million, an impressive achievement given the challenges faced by the mining and luxury goods industries,” said CEO Ian Harebottle.

Chairperson Graham Mascall attributed the surge in revenue and Ebitda to record-breaking auction results for rough ruby and corundum gemstones and record-breaking prices achieved for rough emerald and beryl gemstones.

“Gemfields held four rough emerald and beryl auctions, including two auctions of predominantly higher-quality emerald and two auctions of predominantly commercial quality emerald and beryl. The auctions saw approximately 8.3-million carats being sold in the financial year, yielding a pleasing overall average value of $12.22/ct,” he pointed out.

The Kagem emerald mine, in Zambia, and the Montepuez ruby operation, in Mozambique, aggregately accounted for $174.3-million of the period’s auction revenue.

Kagem produced 30-million carats of rough emerald and beryl, in line with expectations, while Montepuez exceeded its guidance, delivering some 10.3-million carats of rough ruby and corundum.

“The 2015/16 [financial year] has seen the Montepuez ruby deposit come of age, exceeding production guidance by 29%. The consistency of delivery has been exceptional, allowing Gemfields to meet demand while also achieving solid pricing,” Mascall noted.

The group’s 100%-owned Fabergé business continued to expand its global presence with an improved level of consumer awareness and increased the number of agreements with multibrand retail partners.

Meanwhile, new projects eyed by Gemfields are gaining traction, with the start of a drilling programme at the Dogogo south block, in Ethiopia; the establishment of trading centres in Colombo and Ratnapura, in Sri Lanka, to introduce sapphires into Gemfields’ supply chain; and the expansion of the operating team and in-country footprint in Columbia.