Gemstone producer Gemfields has almost tripled the production of emerald and beryl from its flagship Kagem mine, in Zambia, lifting production from 3.6-million carats in the quarter ended March 31, 2014, to a robust 9.9-million carats in the three months ended March 31.

The company, which holds a 75% stake in the mine, outlined in a market update last week that the quarter saw a healthy increase in the overall quantity and quality of emerald and beryl produced from Kagem, validating its belief that the “fluid nature” of emerald mineralisation ideally required the grade to be evaluated on at least a 12-month rolling average basis.

Emerald grades at the world’s largest emerald mine increased by 79% in the quarter, from an average of 198 ct/t in the prior year’s comparable quarter, to 355 ct/t in the period under review.

The fourth phase of the high wall pushback programme in the main Chama pit continued to be advanced by the in-house team and a third-party contractor, while some four-million tons of waste was moved during the quarter, with a slightly accelerated rate of contractor waste mining now likely to result in the completion of the push-back project ahead of schedule.

While Kagem’s trial underground mining project had been placed on hold towards the end of last year, the group believed that, given the continued viability of openpit operations, supported by the robust emerald prices and well contained unit costs, Kagem enjoyed a high level of flexibility to continue to extend the openpit operations through further pushbacks.

“In addition, the exploration and bulk sampling activities at the Fibolele and Libwente pits are progressing well. Social initiatives are currently in progress in the local community, including ground breaking and the appointment of construction contractors for a new secondary school and [the] expansion of the clinic in Nkana district,” it noted.

The reduction of illegal mining activity within the boundaries of the Kagem mining licence had also made “considerable” progress over the three months, given that the mine had now reabsorbed these areas into the site’s routine operations.

Gemfields’ February auction of predominantly lower-quality rough emerald and beryl held in Lusaka, Zambia, saw 3.9-million carats sold, representing 88% of the value offered, and generating auction revenues of $14.5-million.

The auction yielded an overall average of $3.72/ct – a new record for lower-quality emerald and beryl auctions.

Gemfields’ next auction would be of traded rough emerald and was scheduled to take place in Jaipur, India, alongside the auction of rubies from the company’s 75%-owned Montepuez ruby mine, later this month.

Montepuez Rubies
During the quarter under review, bulk sampling operations at the Montepuez ruby deposit, in Mozambique, continued to provide positive results and insight into the geology of the deposit.

This included further studies of both the primary and secondary deposits, with a resource statement still on track for completion before the end of the current calendar year.

Gemfields outlined that the core infrastructure was largely in place and progress was being made towards formalised mining.

“The testwork has led to an enhanced understanding of the ore characteristics and improved throughput in the semimobile processing plant. These improvements saw an almost threefold increase in processed tons, compared with the same quarter in the prior year,” said the group.

Gemfields lifted the production of rubies from Montepuez from 1.1-million carats in the quarter ended March 31, 2014, to 1.4-million carats in the three months under review.

However, the quarter’s average grade of 18 ct/t was markedly lower than the same quarter in the prior year, but attributed to the largely alluvial and higher-quality nature of the particular areas mined during the quarter.

The miner added that, given the size and nature of the Montepuez ruby licence, unlicensed mining activity and asset loss remained a key challenge.

The new mining law had, however, been a supportive mechanism in partly addressing these activities, while a significant security presence and ongoing efforts had resulted in a strong improvement in the quarter under review.

Social initiatives are currently under way in the local community, including pilot agriculture farming, while environmental- and social-impact assessment studies have been carried out by accredited third parties and are due to be submitted to the Mozambique Ministry of Environment by the end of June.

Commenting on the quarterly showing, CEO Ian Harebottle said the increases in production volumes, underpinned by constant growth in market demand for these products, validated the company’s decision to expand the scale of operations across key sites.