Gemfields is pleased to announce the results of the auction of predominantly lower quality rough emerald and beryl held in Jaipur. The auction saw 10.85 million carats of emerald and beryl mined by Gemfields placed on offer, with the 3.47 million carats sold generating auction sales of USD 9.0 million.
Last week's auction was the fourth and final auction of the current financial year (which ends on 30 June 2012). The four auctions, two of which were for lower quality material, have generated aggregate sales of USD 77.9 million while the 10 auctions held since July 2009 have generated USD 133.7 million in aggregate revenues.
The overall quality characteristics of the gems placed on offer at last week's auction were broadly similar to those offered at the previous lower quality emerald auction held in November 2011 in Jaipur (which achieved an average of USD 1.12 per carat for the lots sold). While last week's auction yielded an average of USD 2.61 per carat for the lots sold, in the Company's opinion, this figure is artificially inflated by the number of lowest quality lots that remained un-sold due to the weaker demand experienced at these value points with the current per carat value of this quality material having been largely stable over the past six months.
Given the Company's strong cash position and its belief in the long term fundamentals of the emerald market, Gemfields does not sell lots where the bids do not meet its pre-determined minimum reserve prices. Between November 2011 and June 2012, the Indian Rupee weakened against the US Dollar by 13%, which further negatively affected pricing at this particular auction on account of the large percentage of finished goods produced from this material that is likely to be consumed directly within the Indian domestic retail market.