Our assets

in detail

Key Assets

Montepuez Ruby Mine,
Mozambique

Montepuez Ruby Mining Project is located in the Montepuez District of the Cabo Delgado province, Mozambique. The Montepuez ruby deposit is the most significant recently discovered ruby deposit in the world, covering 10,000 sq. km.

Montepuez Ruby Mining Limitada (“MRM”)is a joint venture between Gemfields (75%) and a local Mozambican minority partner, Mwriti Limitada (25%). MRM received a 25-year mining and exploration licence from the Mozambique Government in November 2011, following which an amalgamation of concessions completed (concession numbers 4702 and 4703, now 4703C), which is valid up to November 2036 and covering an area of 340sq. km.

Gemfields, together with MRM, aim to lead a sector that has historically remained unregulated and largely illicit, by showcasing the benefits of a more systematic, modern and transparent approach to coloured gemstone mining so that the industry becomes more responsible and legitimate, providing sustainable long-term social, economic and environmental benefits to both the country and local communities.

Since commencement of its operations in February 2012, MRM has made a total investment of US$130 million in the project and has contributed an amount of US$73 million to the Mozambican Government in the form of taxes and royalties, until 30 June 2017.

MRM’s first Mozambique ruby auction took place in Singapore in June 2014 and generated a revenue of US$33.5 million. A total of eight ruby auctions to 30 June 2017 have generated total revenue of US$280 million, marking a milestone for the global ruby trade.

Exploration & Geology

MRM adopted a multidisciplinary approach incorporating Airborne-Geophysical survey, Satellite imagery, Geo-chemical studies, Field mapping, Non-Core & Core Drilling and Bulk Sampling to carry out exploration programme. Based on this strategy, first phase of exploration covering an area of 36 sq. km has resulted in a discovery of both primary & secondary mineralization and a resource establishment of 432 million Ct. A total of 24,300 m of core drilling and 21,012 m auger drilling was completed covering 77 sqkm.

The airborne geophysical survey has been completed over an area of 14618 lkm between Oct – Nov 2015, covering all the licenses (2600 sqkm) of Gemfields and its holding companies in the Montepueuz district. The survey was conducted by Thomson Aviation Geophysical Survey to understand the lithological distribution and structural correlation to further target the potential areas for ruby exploration.

Mineral Resource Statement

The Mineral Resource Statement presented is based on the geological modelling of the two mineralisation styles, and the application of factors derived from the bulk sampling.  SRK considers that the Mineral Resource Statement as presented is reported in accordance with the JORC Code (2012).

Table ES 1:   SRK Mineral Resource Statement, as at 01 January 2015, for the Montepuez ruby deposit

Area Mineralisation
Type
Classification Density
(g/cm²)
Tonnage
(kt)
Grade
(ct/t)
Contained Carats
Maninge Nice Primary Indicated Mineral Resources 2.15 2,124 115.4 245,000
Inferred Mineral Resources 2.15 378 115.4 44,000
 Secondary Indicated Mineral Resources 1.53  305  349.8  107,000
Inferred Mineral Resources  –
 Mugloto  Secondary Indicated Mineral Resources  1.95  4,693  15.3  72,000
Inferred Mineral Resources  –
 Total  Primary Indicated + Inferred  2.15  2,502  115.4  289,000
Secondary Indicated + Inferred  1.91  4,998  35.7  178,000

The geological modelling has been modified with further analysis of new drilling data to upgrade the JORC Compliance Resource Statement for an additional area of 45 sqkm.

Bulk Sampling

Bulk sampling commenced in August 2012 and continued to scale up progressively between two main operating blocks of Mugloto and Maninge Nice. At present, the total rock handling is of about 3.5 million T / year. Since inception, a quantity of 1.9 million T or ore has been mined.

Processing

Initially a 50 tph pilot wash plant was set up and the same was augmented to a 70 tph with additions and modifications in the processing technology.

Water treatment plant added to the circuit in August 2016.

The newly upgraded processing plant with a Scrubber unit and a DMS unit has been made operational in December 2016 which has increase the processing capacity to 150 tph (installed capacity: 200 tph). This is for the first time, DMS has been incorporated in colour gemstone recovery. Till date, we have processed a quantity of 1.1 million T of ore at MRM.

Grading of Rubies

Gemfields / MRM has developed the worlds’ first grading system for rough rubies. This system has been widely accepted by customers as it helps them assurance of consistency in colour, size and clarity – crucial in the design and manufacturing of cut and polished rubies. Total recovery till date stands at 33.5 million ct. MRM is in the process of setting up a world class Final Recovery unit involving UV sorting technology for the first time in world for ruby sorting.

Accolades

As a responsible corporate entity MRM has been awarded the following accolades in Mozambique:

Award By Year
1 Biggest tax payer in Cabo Delgado Province Mozambique Tax Authority 2015
2 Biggest tax payer in Cabo Delgado Province Mozambique Tax Authority 2016
3 Biggest Mining Exporter in Mozambique IPEX at FACIM 2015
4 Second Biggest Overall Exporter in Mozambique IPEX at FACIM  2016

Manpower, Communities and Environment

  • Current total of 1,110 employees, 95% of whom are Mozambican nationals
  • MRM salaries are above national and industry average, and there is 100% unionisation
  • As part of mining plan, Nthoro village will be resettled from within the mining concession area, providing 600 community members with new skills and jobs in the build process from 2018-2020.
  • A model house for the resettlement measuring 74 sq m was constructed for review and governmental approval.
  • In October 2017, final government approval for resettlement was granted.
  • Since 2015, international training experts provide weekly training to ensure that our entire security team and operational management teams continually meet international standards of the Voluntary Principle on Security & Human Rights.

Community and conservation projects

MRM has invested significantly in the long-term sustainability of the communities in and around its concession, engaging and collaborating with the local community to identify areas of greatest need and long-term benefit, selecting to invest in:

  1. Education
  2. Health
  3. Agriculture

All community investment projects have been implemented in close collaboration and consultation with the communities and where possible in partnership with the Government of Mozambique. Since 2012, MRM has invested US$1.1million directly into the community through these projects, a sum which is additional to the Provincial repatriation of tax revenues that the Mozambique Government reinvests in the local area. This direct community investment has resulted in the establishment of 9 farming associations (two of which are dedicated to empowering women and in total represents 290 partner farmers), the building of school infrastructure for 4 primary schools and the establishment of a mobile health clinic that serves 10,000 people across 6 villages. As a result of this investment, farming yields amongst the participating partner farmers has improved by 200%, nearly 2,000 primary school-aged children have received education and 25,000 patients received health care from the mobile health clinic since March 2017. In addition to improvements to infrastructure, such as road, electricity and telecommunications networks, that came with organised development of this project, MRM responds to disaster relief to aid the local community, for example flood or storm damage, or pest problems affecting farmers crops.

Details of the major community and conservation investments that have been undertaken by MRM:

1. Education

Project Intervention Beneficiaries Date Complete Investment
(USD)
I Nanhupo Primary School Rehabilitation of 7 classrooms and admin 1102 September 2016 17,000.00
II Nanune Primary School Construction of 5 classrooms, admin and 2 teachers’ houses 380 April 2017 174,000.00
III Nseue Primary School Construction, rehabilitation of 5 classrooms, admin, 2 teachers’ houses 288 April 2017 159,000.00
IV Mpene Primary School Construction of 3 classrooms, admin and 2 teachers’ houses 143 April 2017 138,000.00
TOTAL FOR SCHOOL PROJECTS 1913 488000.00

2. Health

Project Intervention Beneficiaries Date Complete Investment
(USD)
I Mobile Clinic Van Purchase, operation of outreach health program in partnership with Gvt 12,000 January 2017  65,000.00

3. Agriculture

Project Intervention Beneficiaries Date Complete Investment
(USD)
I Nanune Chicken Farm Construction of chicken farm, training of association members, funding first 3 cycles with total of 4.000 chickens 12 August 2016 44,000.00
II Namanhumbir Chicken Farm Construction of chicken farm, training of association members, funding first 3 cycles with total of 6.000 chickens 10 March 2017 45,000.00
III Agriculture Farming Assisting 7 associations with technical farming methods, teaching them conservation farming 210 2017 230,000.00
TOTAL FOR AGRICULTURE PROJECTS 232 319,000.00

4. Others

Project Intervention Beneficiaries Date Complete Investment
(USD)
I Water Boreholes Construction and rehabilitation of 17 boreholes 3,000 August 2015 11,500.00
II Electrification Installation of Village Electricity and Public lighting in Namanhumbir 3,000 August 2015 39,000.00
III ATM Shelter Construction of an ARM shelter in Namanhumbir 3,000 January 2017 20,000.00
IV Niassa Carnivore Project Donation of money towards environmental conservation Wildlife On-going 125,000.00
V Quirimbas National Park Donation of money towards environmental conservation Wildlife On-going 50,000.00
TOTAL OTHERS 9,000 & wild life 245,500.00

Grand Total (investment in CSR projects): More than US$ 1 million

Key Assets

Kariba Amethyst Mine,
Zambia

Overview

The Kariba amethyst mine covers an area of 396 hectares, and is located in the southern part of Zimba district, Zambia (approximately 550 kilometres south- southwest from the Kagem emerald mine). Kariba has produced some of the finest amethyst in the world. Its unparalleled deep purple hue, combined with exceptional lustre, sets the standard for excellence internationally.

Kariba market share has been estimated at over 90% of the amethyst originating from Zambia with annual production reaching as much as 900 tonnes per annum, making it one the largest producers in the world. Kariba has, over the years, developed a bespoke amethyst grading system that has established its gemstones as premium products.

Gemfields and ZCCM-IH, which each own of 50% of Kariba, recapitalised the operation with US$ 2.5 million in December 2012 so that additional mining and processing equipment could be purchased.

Following the recapitalisation, there has been steady increase in production averaging 900 tonnes per annum. The increase in production is both on the commercial grade amethyst as well as the premium grades. Similarly, revenues have also been steadily rising reaching a high of $2.1million in 2016. Customer interest – over the years we have seen the rise in the number of inquiries from prospecting clients as well as a rise in ordered quantities from the existing clients.

Key Facts

Location Southern part of Zimba district, Zambia
Acquisition by Gemfields May 2004
Ownership structure 50% Gemfields, 50% ZCCM-IH (ZCCM-IH is 87% owned by the Government of the Republic of Zambia)
Gemstones Amethyst
Mineral Resource Inferred resource of 325,000 tonnes, with grade of 37.1 kilograms per tonne
No measured of Indicated Mineral Resources are defined
Production 900 tonnes per annum
Mining method Open-pit, with a 100 tonne per hour washing plant

Mineral Resource Statement

Mineral Resources Tonnage (kt) Grade (kg/t Amethyst) Content (kt Amethyst)
Total Measured + Indicated 0 0.0 0.0
Inferred 325 37.1 12.1
Subtotal Mineral Resources 325 37.1 12.1
Total Resources 325 37.1 12.1

(1) No Measured or Indicated Mineral Resources are defined at Kariba.

Geology

Amethyst mineralisation occurs as fracture fillings in granitic gneisses and marbles. The mineralising fluids started crystallising from the walls of the open cavities inwards. In the Kariba mine area, the host rocks has been exposed to tensile fracturing, creating an extensive network of well-connected cavities. The fractures occurred in weak zones, which were opened during deformation. Earlier fractures also expanded, creating larger openings, and these form the most economically significant mineralised zones. Most of the fracture zones trend northeast to southwest, indicating that the compression was at right angles to the trend.

Open-pit mining

Three major zones of amethyst mineralisation have been identified within the licence. Two of these are located in the central area and host the mine’s most significant amethyst deposits. These zones run through the Cha Cha, Francis, Curlew, Davidson and Horden prospects. Mining development includes plans to connect the Francis pits (Main Francis, Lower Francis, Top Francis west and Sinamaani pits) and to operate the Basil and Curlew pits.

Safety

The size of the Kariba, which in comparison to Kagem and Montepuez is very small does not mean that the approach to health, safety and environment is any less robust. The integrity of Kariba’s approach is still very rigorous and the operation has in place the necessary processes to manage the risks according to the likelihood, severity and size of the operation. Kariba’s management gives its staff access to a local doctor for hospital referrals and works with health delivery partners to carry out health and safety training. Environmental studies have been carried out in accordance with law and these approaches are integrated into the mine operations and rehabilitation plan.

Key Assets

Kagem Emerald Mine,
Zambia

Overview

The Kafubu emerald deposits are in the Lufwanyama District of Copperbelt Province in northern Zambia, and demarcated as Ndola Rural Emerald Restricted Area (NRERA) covering an area of approximately 890 square kilometres. NRERA encompasses over 520 licences, of which the Kagem licence, 14105-HQ-LGM (GL713), is the largest at 41 square kilometres, an is in the central and most prospective part. The Kagem emerald mine is the world’s single largest producer of emeralds and accounts for approximately 25% of global emerald production.

Kagem is being recognised as the true flag-bearer of the gemstone sector in Zambia by developing a workforce dedicated to identifying value creation opportunities across our operations, and delivering improvements across exploration, mining value chain, from processing to grading, auctioning and marketing.

Key Facts

Location Copperbelt Province, Zambia
Acquisition by Gemfields 2008
Ownership structure 75% Gemfields, 25% Government of Zambia
Gemstones Emeralds and beryl
Mining method Open-pit (Fwaya-Fwaya-Chama)
Potential Mine life 25 years Open Pit (up to 2040)

Geology

The geology of the Copperbelt Province around the NRERA consists of the neoproterozoic Katanga Supergroup, which can be several kilometres thick in places. The Katanga Supergroup is underlain by the Muva Supergroup, which lies un-conformably on top of granites, amphibolite gneisses and quartz-biotite schists of the Kufubu Basement Complex (palaeoproterozoic). The whole suite of rocks is deformed into a series of complexly folded synformal structures.

The rocks containing the Kafubu deposits consist predominantly of quartzites and quartz-mica schists of the mesoproterozoic Muva Supergroup which are sandwiched between granite gneisses of the Basement Complex and meta-sediments of the Katanga Super group which hosts the copper – cobalt deposits of the Zambian Copperbelt. Sub-concordant bodies of amphibolite and ultramafic rock (flows, sills or tuffs) also occur within the Muva schists. The ultramafics, which vary in thickness from 20 metres to 140 metres, have been altered by metamorphism and hydrothermal activity into talc-chlorite-tremolite magnetite schist (locally referred to as TMS) or talc-biotite schist (TBS). The amphibolites have also suffered varying degrees of alteration to biotite–actinolite schists.

The emerald and beryl mineralisation is associated with metasomatic reaction zones at the contact between the TMS and the pan-african pegmatite intrusive. Three main pegmatite trends observed within the Kagem licence, namely north to south, northwest to southeast and east to west. These pegmatite dykes and associated quartz tourmaline veins are frequently rimmed by metasomatic reaction zones up to 5 metres thick that are characterized by an abundance of coarse foliated black to bronzy biotite  and phlogopite with porphyroblasts of tourmaline or actinolite and crystals or clusters of beryl and/or emerald.

Exploration

Kagem is constantly striving on “resource replenishment strategy” through continuous exploration activities. Consequently, by compiling diamond core drilling data more than 94,000 metres of in more than 913 boreholes within the license area, Kagem has established significantly potential blocks outside existing known resources.

We continued to maintain competitive advantage by utilising cutting edge exploration tools and techniques for discovering large scale gemstone mining operations. This includes collection of advanced airborne / ground geophysical surveys, diamond core drilling and geochemical analytical techniques by use of handheld XRF (X-ray flourcense) & LIBS (Laser Induced Breakdown Spectroscopy) instruments.

Open-pit mining

The Kagem emerald mine is currently an open-pit operation, approximately 130 metres deep and 1200 metres long. Overburden and waste material is mined in phases in different sectors to expose the ore bodies for mining associated with TMS levels and careful mined manually by chiselling and further transported for processing at washing plant.

Kagem has worked in the past of high wall pushback programmes, which was to extending the pit, in its fourth and fifth phase, with 75 metres and 100m respectively on the western side of the main Chama pit.  Since then, we have moved to a continuous stripping of overburden exposing sufficient ore, balancing the development and ore mining schedules. This work now is being carried out only using in-house capability since Oct 2015.Currently, work is in progress at shallower levels in the FF-Mboyanga, at the eastern part of the pit and erstwhile trail underground areas extending in strike directions. Production has been consistently reported from all the sectors including F10, Junction, Chama and Mboyonga sectors in the period 2016-17.

At Kagem a significant value to the property is added by developing two bulk sampling mining pits each at Libwente-Ishuko sector and Fibolele-Sandawana. Thus, exploring prospects and operating four bulk sampling pits, we strive to significantly enhance the resources, mining potential within the Kagem License in future.

The mine and exploration programs are efficiently supported by latest software utilising Leapfrog, Geosoft Target and ArcGIS software for modelling and it interpreting the geology. New data combined with state-of-the-art Geophysical 3D Inversion Modelling in a 3D Voxel Model, mining is supported by scheduling and mine designing work-flows (though Surpac software), all of which is amalgamated into our comprehensive mine plan.

Safety

Kagem has built a reputation in Zambia as a world-class emerald mine and a safety record to match. Having invested early in modern mining techniques and processes, the approach to safety, health and well- being has always been a key focus. The health, safety, environment and quality team’s approach is by engaging staff through signage, carrying out regular training and awareness sessions. Kagem is currently under way with the process to ensure compliance with both OHSAS18001 and ISO14001 management systems.

Kagem has a well-established clinic and for staff wellbeing there are sports and gym facilities on site including recreation areas.

Mineral Resources

  • Kagem JORC Resource and Reserves update
  • Measured, Indicated and Inferred Mineral Resource of 1.8 billion carats (“bct”) of emerald and beryl at an in-situ grade of 281ct/t
  • Open pit mine plan until 2040
  • Chama LoM of 25 years
  • Fibolele LoM of seven years
  • Average annual production of emerald and beryl of 44.7mct over the LoM
  • Robust economics show a post-tax NPV of US$520m (based on a 10% discount rate)
  • Proved and Probable Ore Reserves of 1.1bct of emerald and beryl at a diluted ore grade of 291ct/t
  • Expansion of owner operated mining fleet to support increased rate of ore mining, and the ongoing bulk sampling of additional exploration pits
Classification Tonnage (kt) Grade (ct/t) Contained Carats
Proved and Probable
Chama 3,659 300 1,097,826
Fibolele 177 103 18,312
Total 3,836 291 1,116,138

 

Classification Tonnage (kt) Grade (ct/t) Contained Carats
Measured 800 345 290,000
Indicated 3,970 335 1,330,300
Measured & Indicated 4,770 340 1,620,300
Inferred 1,650 110 181,200
Total 6,420 281 1,801,500

FY16 Results

KAGEM Annual Production Summary Units Year to 30 June 2010 Year to 30 June 2011 Year to 30 June 2012 Year to 30 June 2013 Year to 30 June 2014 Year to 30 June 2015 Year to 30 June 2016
Gemstone Production (Emerald + Beryl) million carats 17.4 33.0 21.1 30.0 20.2 30.1 30.0
Ore Production (Reaction Zone) thousand tonnes 60.8 69.1 102.9 105.9 80.0 124.3 164
Grade (Emerald + Beryl / Reaction Zone) carats / tonne 286 478 205 283 253 242 241
Waste Mine (Including TMS) million tonnes 2.5 3.9 8.7 9.5 7.3 14.9 11
Total Rock Handling 2.6 4.0 8.8 9.6 7.4 15.0 12.6
Stripping ratio 42 56 85 90 91 120 100

Key Assets

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