A leading supplier of responsibly sourced coloured gemstones · polished gemstones Faberge...

Gemfields Plc

Interim results for the six months ended 31 December 2015

22 February 2016

A leading supplier

of responsibly sourced coloured gemstones

Gemfields Plc

Legal disclaimer

2

This document, which has been issued by Gemfields Plc (the “Company”), comprises the written materials/slides for a presentation concerning the Company, including its business, results of operations and prospects. This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any shares in the Company nor may it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision in relation thereto, nor does it constitute a recommendation regarding the shares of the Company. The contents of this presentation are to be kept confidential.

No reliance may be placed for any purposes whatsoever on the information contained in this document or on its completeness. No representation or warranty, express or implied, is given by or on behalf of the Company, its shareholders or any of its affiliates, advisors or representatives as to the accuracy or completeness of the information or opinions contained in this presentation. None of the Company, its shareholders or any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss whatsoever arising from any use of this document, or its contents, or otherwise arising in connection with this document. This document and its contents are confidential and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, in whole or in part, for any purpose and it is intended for distribution in the United Kingdom only to persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended, or to those persons to whom it can otherwise lawfully be communicated (all such persons being referred to together as a “Relevant Person”). Any person who is not a Relevant Person should not and may not act or rely on this document or any of its contents. Any person who is unsure of their position should seek independent advice.

This document does not and is not intended to constitute an offer of securities for distribution or sale in the United States or any other jurisdiction or territory. Securities may not be offered, sold or distributed in the United States absent registration or an exemption from registration under the US Securities Act of 1933. None of the Company’s shares have been, or are required to be registered under the US Securities Act of 1933. Neither the Company’s shares nor this document have been approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the United States or any other US regulatory authority, nor have such authorities passed upon or determined the adequacy or accuracy of this document. Any representation to the contrary is a criminal offence in the United States.

Certain statements in this presentation, or given in response to questions, may constitute forward-looking statements. These statements relate to future events or future performance and reflect the Company’s expectations and assumptions regarding the growth, results of operations, performance and business prospects and opportunities of the Company. In particular, statements regarding the Company’s objectives, plans and goals involve forward-looking statements. We caution you that any forward-looking statements are just predictions. They are not guarantees of future performance and involve risks and uncertainties. A number of factors could cause actual events, performance or results to differ materially from what is projected in the forward-looking statements. Although the forward-looking statements contained in this discussion are based on what the Company considers to be reasonable assumptions based on information currently available to it, there can be no assurance that actual events, performance or results will be consistent with these forward-looking statements, and the Company’s assumptions may prove to be incorrect. The Company does not intend, and, subject to any legal or regulatory requirements, does not assume any obligation, to update or revise them to reflect new events or circumstances.


Gemfields Plc

Business Model

3

Mine and Market

Market • Global leader in repositioning the coloured gemstone industry alongside other luxury goods

• Owner of Fabergé, one of the world’s most recognisable luxury brands, enables Gemfields

to accelerate its vision to raise the international presence and perception of coloured

gemstones

Pioneering auction platform • Well established and reliable auction platform in the coloured

gemstone sector

• Helps to formalise the market

• Delivering a reliable supply of well-graded rough gemstones

• Targeted to each customer’s needs

Develop, mine, deliver • A leading supplier of responsibly sourced coloured gemstones, and one of the world’s

largest emerald, ruby and amethyst producers

• Experienced and well-regarded management team with a proven track record of delivery

• Unrivalled expertise in coloured gemstone mining and exploration

• Scalable mines with recognised reserves

Sorting and Grading • Pioneered world’s most comprehensive grading and sorting system for rough emeralds and

rubies

Luxury, retail and

wholesale market Fabergé

Rough

customers


Gemfields Plc


Financial highlights

Gemfields Plc

Financial highlights

Revenues US$

94.0m 2014: 103.4 million (‘m’)

5

Net profit after tax US$

8.2m 2014: 23.2m

EBITDA US$

35.6m 2014: 61.7m

Est. cost of inventory US$

107.0m1

30 June 2015: 101.1m1

Gross profit margin

49% EBITDA margin

38%

Cash on hand US$

24.9m 30 June 2015: 28.0m


Interim results for the six months ended 31 December 2015 1 Fuel and consumables omitted

Gemfields Plc

Financial highlights - Consolidated income statement

6 Interim results for the six months ended 31 December 2015

In thousands of US$

Six months

ended 31

December 2015

Six months

ended 31

December 2014

% change

for the period

Revenue 94,025 103,388 (9.1)

Cost of sales (47,649) (35,628) 33.7

Gross profit 46,376 67,760 (31.6)

Other income 164 566 (71.0)

Selling, general and administrative expenses (26,014) (23,521) 10.6

Profit from operations 20,526 44,805 (54.2)

Finance income 4,032 3 134,300.0

Finance expenses (2,748) (1,348) 103.9

Profit before taxation 21,810 43,460 (49.8)

Tax charge (13,592) (20,244) (32.9)

Profit after taxation 8,218 23,216 (64.6)

Profit for the year attributable to:

Owners of the parent 3,426 16,263 (78.9)

Non-controlling interest 4,792 6,953 (31.1)

8,218 23,216 (64.6)

Earnings per share for profit attributable to the owners of

the parent during the year

Basic US$0.01 US$0.03

Diluted US$0.01 US$0.03

Gemfields Plc 7

Revenue analysis – three auctions held during the Period

Higher and medium quality rough ruby – Singapore • December 2015 aggregate revenues of

US$28.8m • Average price of US$317.92/ct • 90,642 cts sold

Five Montepuez auctions held from bulk

sampling operations since June 2014 have generated US$150.8m in aggregate revenues.

H1 FY 2015

Rough emerald and beryl Higher quality November 2014

Lower quality August 2014

Rough ruby Higher Quality December 2014

Rubies Emeralds

Higher quality rough emerald and beryl – Singapore • September 2015 aggregate revenues of

US$34.7m • Average price of US$58.42 per carat (‘/ct’) • 0.59 million carats (‘mct’) sold

Lower quality rough emerald and beryl – Jaipur, India • November 2015 aggregate revenues of

US$19.2m • Average price of US$4.32/ct, a new

record for lower quality emerald and beryl • 4.45mct sold Amethysts Higher quality rough amethyst - Singapore • September 2015 aggregate revenues of

US$0.44m • Average price of US¢4.32/ct • 10.1mct sold


Gemfields Plc 8

Financial highlights – Cost of sales and inventory breakdown

1 Excluding fuel and consumables

Rough, cut and polished gemstones

Faberge Inventory

Rough, cut and polished gemstones

Faberge Inventory

US$47.6m

Total cost of sales H1 FY 2016

US$35.6m

Total cost of sales H1 FY2015

US$107.0m1

Total inventory as at December 2015

US$101.1m1

Total inventory as at June 2015

26,084 15,071

5,774

23,089

16,936

US$66,379 US$40,598

US$65,360 US$35,776


23,089

26,804

Total mining and production cost

Depreciation and amortisation

Change in inventory and cost of goods sold

US$26,804

US$5,774

US$15,071

Total mining and production cost

Depreciation and amortisation

Change in inventory and cost of goods sold

US$23,089

23,089

US$16,936

US$(4,397)

Gemfields Plc

Six months production of emerald and beryl

15.7mct

Mine cost analysis for Kagem, Zambia (75% interest)

2014: 12.1mct

Average monthly operating costs

US$3.7m 2014: US$3.7m

Unit per carat operating cost for emerald and beryl

US$1.43/ct 2014: US$1.81/ct

Cash rock handling unit costs at Kagem

US$2.38/t 2014: US$2.92 per tonne (‘/t’)

9

Average emerald and beryl grade for the period

254ct/t 2014: 202 carats per tonne (‘ct/t’)

Total operating costs at Kagem

US$22.4m 2014: US$21.9m


• Fourth high wall pushback was completed in September 2015, exposed ore available to mine for around 15 months

• Updated JORC resource and ore reserves statement with measured, indicated and inferred mineral resource of 1.8 billion carats (‘bct’) of emerald and beryl at in-situ grade of 281ct/t and proven and probable ore reserves of 1.1bct of emerald

• Capital expenditure for the period of $4.0m including $3.3m of capitalised waste stripping costs

Gemfields Plc

Six months production of ruby and corundum

2.1mct

Mine cost analysis for Montepuez, Mozambique (75% interest)

2014: 6.3mct

Total ruby and corundum extracted to date

18.8mct

Total operating costs at Montepuez

US$13.0m 2014: US$10.0m

10

Average ruby and corundum grade for the period

15ct/t

Unit per carat operating cost for rubies and corundum

US$6.19/ct 2014: US$1.59/ct

Cash rock handling unit costs for the period

US$4.75/t

2014: US$5.85/t

2014: 37ct/t


• Medium term focus on

lower grade but

significantly higher value

alluvial ore resources,

delivering a 341%

increase in the overall

volume of higher quality

rubies recovered

• Maiden JORC Resource

and Reserves statement;

indicated and inferred

mineral resource of

467mct of ruby and

corundum, probable ore

reserves of 432mct of

ruby and corundum,

projected 21 year Life of

Mine (‘LoM’)

• Capital expenditure for

the period of US$5.1m

Gemfields Plc

Interim Results Operational highlights

Gemfields Plc 12

Kagem mine Believed to be the world’s single largest producing emerald mine (75% ownership)

H1 2016 highlights

• 15.7mct of emerald and beryl produced for the period (2014:

12.1mct) with an average grade of 254ct/t (2014: 202ct/t)

• JORC resource updated; total measured, indicated and inferred

mineral resource of 1.8bct of emerald and beryl and proven

and probable ore reserves of 1.1bct of emerald and beryl

• Continued excellent safety record, with no reportable lost time

injuries since taking over the mine

KAGEM Quarterly

Summary Units Sep-14 Dec-14 Mar-15 Jun-15 Sep -15 Dec - 15

Half year

2014-15

Half year

2015-16

Gemstone Production

(Emerald+Beryl) million ct 6.3 5.8 9.9 8.1 7.5 8.2 12.1 15.7

Ore Production (Reaction

Zone) '000 tonnes 29.4 30.5 27.9 36.5 31.7 30.1 59.9 61.8

Grade

(Emerald+Beryl/Reaction

Zone) ct/t 214 190 355 222 237 272 202 254

Waste Mined (including

TMS)

million

tonnes 3.2 4.1 4.0 3.6 4.0 2.8 7.3 6.8

Total Rock Handling

million

tonnes 3.2 4.2 4.0 3.6 4.1 2.8 7.4 6.8

Stripping Ratio 109 134 143 99 126 93 122 110


FY 2016 Outlook

• Guidance of 25-30mct of emerald and beryl production for FY 2016

• Two further emerald auctions planned for FY 2016, the next auction of predominantly higher quality rough emerald expected to take place in March 2016

• Continue exploration and bulk sampling programme to develop new potential production areas within the Kagem licence ‘resource replenishment strategy’

• Implement Kagem LoM plan and increase processing to 180,000t/a by July 2018 comprising 150,000t/a from Chama pit and 30,000t/a from Fibolele pit

Gemfields Plc 13

Montepuez mine Considered to be the world’s single largest producing ruby and corundum deposit (75% ownership)

H1 2016 highlights

• 2.1mct of ruby and corundum produced (2014: 6.3mct), with an

average grade of 15cpt (2014: 37cpt). This is attributed to higher

quality but lower grade alluvial ore processed during the period

• 360,000 tonnes of rock handled per month (2014: 240,000 tonnes

per month)

• The period was injury free with no major incidents reported

• The total ruby and corundum produced at Montepuez since the

commencement of bulk sampling now stands at 18.8mct

Montepuez Quarterly

Summary Units Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15

Half year

2014-15

Half year

2015-16

Gemstone Production

(Ruby+Corundum) million carats 2.9 3.4 1.4 0.7 0.5 1.6 6.3 2.1

Ore Production (Mineralised

Overburden, Gravel Bed,

Amphibolite) '000 tonnes 81.7 158.3 79.4 119.5 136.9 132.9 240.0 269.8

Ore Processed (Mineralised

Overburden, Gravel Bed,

Amphibolite) '000 tonnes 69.9 101.4 78.6 75.5 72.8 71.7 171.3 144.5

Grade

(Ruby+Corundum/Ore

Processed) carats/tonne 41 34 18 9 7 22 37 15

Waste Mined ‘000 tonnes 452.2 776.9 441.7 859.7 996.8 922.0 1,229.1 1,918.8

Total Rock Handling ‘000 tonnes 533.9 935.2 521.1 979.2 1,113.7 1,054.9 1,469.1 2,188.6

Stripping Ratio 5.5 4.9 5.6 7.2 7.3 6.9 5.1 7.1 Interim results for the six months ended 31 December 2015

FY 2016 outlook • Maintaining guidance of approximately 8mct of ruby and

corundum for FY 2016

• Rough ruby and corundum auction schedule for H2 2016 being finalised, at least one larger size auction of mixed qualities of material expected to take place before the end of June 2016

• Gradual increase in total rock handling capacity from 3.3mt/a to 5.3mt/a by end of FY 2017. Increased annualised processing rate of 1.3mt/a of ore (from the current 399,000t/a ore) by FY 2018

• Potential steady state production of approximately 20mct by FY 2018

13

Gemfields Plc

Investment in new projects and trading operations

14

• Continue strategy of targeted low-cost/high-value acquisitions and low capital intensity development

• Geographic and product diversification through investment in exploration and development of existing assets in:

• Colombia

– Executed binding but conditional agreements to acquire two emerald projects with operations and prospects located in Boyacá state in Colombia including the Coscuez Emerald Mine and approximately 20,000 hectares of exploration acreage

– Completion of Coscuez acquisition expected in March 2016. Once completed Gemfields will proceed with exploration and development plan in H2 2016

• Ethiopia

– Acquired 75% of Web Gemstone Mining which holds an emerald exploration licence covering a total concession area of 200km2 and potentially hosts emerald mineralisation within a geological lineament that stretches over 45 kilometres

– Exploration work commenced – preliminary ground survey mapping, preparation of base plans and manual pitting and trenching

• Sri Lanka

– Product diversification through development of sapphire operations – Trading company established to source rough sapphires – Preliminary geological assessment underway

• Further exploration and mining projects at hand in Zambia, Mozambique and Madagascar

• Rough trading operations in emeralds and rubies

• Further support management strategy of ‘Gemfields inside’ through growth of trading in cut and polished gemstones


Gemfields Plc

• Value of realised sales during the period increased by 70% when compared with the same period in 2014

• Losses before interest, tax, depreciation and amortisation reduced by 21%

• Fabergé will be exhibiting at the Doha Jewellery & Watches exhibition in February, Baselworld in March and Couture Las Vegas in June

• Fabergé will continue to bring a number of new and exciting watches to market this calendar year. Launch set to take place during the Basel watch and jewellery fair in March 2016

• Key jewellery introductions include invisibly-set egg pendants featuring rubies and sapphires, new Gypsy Rings and a limited edition of 38 enamel pendants containing a carved gold monkey with ruby eyes to commemorate the 2016 Chinese New Year

• Four Seasons Imperial Class Eggs will be exhibited together, for sale, for the first time at Doha and Baselworld

• Updated retail image platform set to be introduced in all locations before the end of FY 2016


Fabergé influencing the position of coloured gemstones (100% ownership)

Gemfields Plc

Outlook

Gemfields Plc

Significant growth opportunities Mining

Kagem

• Maintain target of 25-30mct of emerald and beryl per annum for

FY2016 with potential of rising to 40-45mct following new LoM

plan implementation

• Projected open pit mine plan until 2040, Chama LoM of 25 years

and Fibolele LoM of seven years with an average annual

production of emeralds and beryl of 44.7mct over the LoM

Montepuez

• Maintain target production of 8mct ruby and corundum per

annum with potential to rise to 20mct/a in subsequent years

• Projected 21 year LoM producing a total of 432mct over LoM

from reserves

• Exploration programme to date has covered circa ~20% of

licence area. Substantial exploration programme planned for the

next few years at Montepuez.

Auctions and Sales • Two further emerald auctions planned for FY 2016, the next

auction of predominantly higher quality rough emerald expected

to take place in March 2016

• Rough ruby and corundum auction schedule for H2 2016 being

finalised, at least one larger size auction of mixed qualities of

material expected to take place before the end of June 2016

• Expand emerald and ruby trading footprint

New Projects • Geographical diversification through investment in exploration

and development assets in other jurisdictions such as: Colombia,

Ethiopia, Sri Lanka, Zambia, Mozambique and Madagascar

• Gemfields aims to complete the acquisition of a controlling

interest in Coscuez Emerald Mine, Boyacá department, Colombia,

and then proceed with exploration and development plan during

H2 2016

• Product diversification through development of sapphire

operations

• Trading company in Sri Lanka

Marketing • Maintain focus on existing target areas (US, Europe and India)

• Initiate “Gemfields Inside” strategy in conjunction with leading

downstream stakeholders

• Continue to drive demand and achievable rough gemstone prices,

choosing to focus on increasing demand (rather than diminishing

supply) to achieve growth


Gemfields Plc

Rough sales and marketing

Gemfields Plc

Market overview

Coloured gemstone market increased 26% in 2014 and continued to expand in H2 2015:

• Gemfields rough emerald and ruby auction results indicate a considerable rise in demand for the low and mid quality gemstones closing a significant broad price range gap between the highest and lowest grades

• Conventional and online retail jewellery sales demonstrate significant growth in demand for coloured gemstones

• Global imports of worked coloured gemstones and pearls in 2014 stood at US$8.6 billion (“bn”) (2013: US$6.8bn)

• Emeralds, rubies and sapphires account for 58% (US$5bn)1 of the worldwide coloured gemstone and pearl market, an increase of 32% over the US$3.8bn2 reported in 2013

2015 prices and the potential for growth

• Current market prices show significant room for continued growth

• Coloured gemstones are setting new world records at auctions; a 25.59ct ruby was sold by Sotheby’s for US$30.3m in May 2015, the highest price ever achieved by a ruby, and the Hope Spinels, selling at £962,500 at Bonham's in September 2015 set a new world record price for rubies of £30,000 per carat.

• Emily Barber, Bonham’s jewellery department director predicts that coloured gemstones will drive the jewellery market in 2016:

“Without a doubt we are seeing the return of the so-called precious stones: emeralds, rubies and sapphires. Demand is very, very strong and record prices are being paid.”

1Refers to trade in both rough and cut and polished emeralds, rubies and sapphires 2 United Nations Commodity Trade

Source: GemWorld International Inc and Company information

Note: Prices are taken at the top of each categories range and include all places of origin..


Source: ©Gemval.com, DiamondSE.info

0

1000

2000

3000

4000

Ruby, Emerald and Diamond Prices : 0.3 ct. (2015, US$/carat)

Diamond (D) Diamond (F)

Emerald Ruby

Blue Sapphire

100

120

140

160

180

200

220

240

260

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Rel

ativ

e in

dex

Gemval Relative Index: Gemstone Historical Values 2005-2015

Emeralds Rubies

Sapphires Diamonds

Gemfields Plc

Emeralds, rubies and sapphire production

• Zambia believed to have become the world’s leading producer of rough emeralds and beryl in 2014 by export value

• Kagem’s contribution c. 70% of Zambia’s known production

• Gemfields’ best estimates for value of rough emerald exports derived from various global sources in 2014:

˃ US$143m for Zambia

˃ US$134m for Colombia

˃ US$67m for Brazil

• Montepuez in Mozambique is believed to be the world’s most significant ruby deposit discovery and has replaced Myanmar as the world’s largest ruby producer. Montepuez is reviving the global ruby trade by establishing a reliable and consistent source of supply to the world’s markets

• Sri Lanka is one of the most important sapphire producing countries in the world with US$125m* in exports reported in the 2014 calendar year

Gemstone production

Zambia US$143m

Colombia US$134m

Brazil US$67m

Other US$65m

Value of emerald exports per producing region – 2014

* Source: UN Comtrade Database

Source: UN Comtrade Database and Company information


Gemfields Plc

• Proprietary rough grading platform and auction process for rough emeralds, rubies and amethysts. Prior to Gemfields’ strategy there was no formal process in place with mined production largely being sold as a “mixed bag”

• Proven ability to deliver a consistent supply of high quality, well graded rough gemstones to the downstream market

• The Company believes that “who it sells to” remains as important as “how much it sells for”

• Supporting an increase in scale of global coloured gemstone beneficiation and jewellery manufacturing, distribution and marketing

• Demand for Gemfields products is increasing across all major markets; this is accompanied by a steady increase in achieved per-carat rough prices

A key component within Gemfields’ success and significant future

Providing a consistent supply


Gemfields Plc

Targeted marketing, incl. Fabergé

• The global emerald, ruby and sapphire market has grown 213% since 2009 (US$1.6bn) and reached US$5bn in 2014

• Gemfields spend on marketing (including total Faberge spend), exploration and new projects stands at around 12% of revenues

• Fabergé won the prestigious Grand Prix d'Horlogerie de Genève (“GPHG”) award held in October 2015. The award cements Fabergé's position as a future leader in the watch-making industry

• Gemfields collaborated with Bergdorf Goodman, New York and 18 of the most inspiring designers to create a collection of jewellery featuring Mozambican rubies and Zambian emeralds

• Targeted global media coverage championing coloured gemstones and the Gemfields proposition and messages

• Sponsorship initiatives and partnerships in North America, Europe, India and Asia

Rejuvenating demand


Gemfields Plc

Gemfields’ approach:

Addressing sustainability at our operations; societal, environmental, health & safety, human rights aspects but also, crucially, the integrity of our product through the supply chain.

• Focussing on sustainability and supporting, among others:

Schools;

Medical clinics;

Local organic farming projects;

Select global NGOs; and

Other stakeholders partnerships.

Cause-related initiatives:

Gemfields is committed to managing corporate responsibility and sustainable development across the Group

• January 2015 – January 2016, the Company constructed two major social investments namely the Nkana mini hospital and Chapula secondary school in Chief Nkana’s chiefdom, the host community for Kagem

• The US$1.3m projects consisted of a four ward facility and a fully contained secondary school with adequate equitable conducive teaching and learning environment

• Montepuez has already undertaken the renovation of three primary schools, construction of waiting shelter at the district hospital, a sporting ground, a market, drilling and installation of five water boreholes and supplying of building materials to 28 families who lost their houses in bad weather

Committed to sustainability


Gemfields Plc

Appendix

Gemfields Plc 25

5.9 5.6 7.5

19.6

31.6

26.2 26.8

31.5

36.5 34.9 34.7

4.4 5.1 9.35

26.2

42.71 38.25

29.71

54 59.31

65.89

58.42

Total sales realised at auction (US$m)

Average per carat sales value (US$)

7.2

10 11

9

15.2 16.4

15.5 14.5

19.2

0.31 0.77

1.12

2.61 2.42

3.32

1.34

3.72 4.32

Rough emerald and beryl sales

Lower Quality Emerald



Higher Quality Emerald


33.5

43.3

15.9

29.3 28.8

Jun 14 Mixed

Dec 14 HQ

Apr 15 LQ

Jun 15 HQ

Dec 15 Mixed



Rough ruby and corundum sales

Rubies

18.43

688.64

4.02

617.42

317.92

Jun 14 Mixed

Dec 14 HQ

Apr 15 LQ

Jun 15 HQ

Dec 15 Mixed

Gemfields Plc 26

Global gemstone deposits and Gemfields’ locations

Locations

Fabergé retail outlets and wholesale partners not shown Interim results for the six months ended 31 December 2015

Gemfields Plc

Kagem JORC Resource and Reserves update

• Measured, Indicated and Inferred Mineral Resource of

1.8bct 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 (kct)

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

Source: SRK, Kagem 100% basis

27

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Beryl-II Beryl-I

Emerald Premium Emerald

Opex (RHS)

Opex

US$/ct

Total sales

000 cts

Classification Tonnage

(kt)

Grade

(ct/t)

Contained carats

(kct)

Proved & Probable

Chama 3,659 300 1,097,826

Fibolele 177 103 18,312

Total 3,836 291 1,116,138 Source: SRK, Kagem 100% basis


Gemfields Plc 28

Montepuez JORC Maiden Resource and Reserves

• Indicated and Inferred Mineral Resource of 467mct at in-situ ore grade of 62.3ct/t

• Projected 21 year LoM producing a total of 432mct over

LoM

• Projected real cash flow (no discount rate applied) over

the LoM of approximately US$2.76 billion

• Robust economics shows a post-tax NPV of US$996m

(based on 10% base case discount rate)

• Capital expenditure of US$64m over the first two years

and a total of US$305m over LoM

• Exploration programme to date has covered around

36km2 out of the 336km2 licence area

• Substantial exploration programme planned for the next

few years at Montepuez

Reserves

Tonnage

(kt)

Grade

(ct/t)

Contained carats

(ct,000)

Proved -- -- --

Probable 27,549 15.7 431,620

Total 27,549 15.7 431,620

Resources

Indicated 7,122 59.5 423,000

Inferred 378 115.4 44,000

Total 7,500 62.3 467,000

Net Present Value at 10.0% discount rate US$996m

Internal Rate of Return 311.7%


Gemfields Plc

Company overview

Advisers

Nomad Grant Thornton

Joint Broker BMO Capital Markets

Joint Broker J.P. Morgan Cazenove

Joint Broker Macquarie Capital (Europe) Limited

Auditors BDO

Financial PR Tavistock

Directors and Management

29

Significant Shareholders(as at 19 February 2016) The PallinghurstResources Fund L.P. 47.59%

Investec Pallinghurst(Cayman) LP 12.55%

NGPMR (Cayman) LP 13.32%

BlackRockInc 3%

Platinum Asset Management 2.89%

Others 20.65%

Total 100%

London Listed AIM: GEM

Current Share Price (19/02/2016) 46p

Issued Shares 544,070,621

Market Capitalisation £247m


Analyst Forecasts Target Price

BMO Capital Markets – 4 Jan 2016 90.0p

FinnCap – 4 Feb 2016 80.0p

Investec Securities – 20 Jan 2016 71.0p

JP Morgan Cazenove – 18 Jan 2016 65.0p

Macquarie – 23 Sept 2015 120.0p

Numis – 17 Oct 2015 85.0p

Panmure Gordon – 13 Jan 2016 64.0p

Peel Hunt – 29 Apr 2015 77.0p

Graham Mascall Ian Harebottle Devidas Shetty Janet Boyce

Chairman Chief Executive Officer Chief Operating Officer Chief Financial Officer

Sean Gilbertson Clive Newall Finn Behnken

Executive Director Non-Executive Director Non-Executive Director

Gemfields Plc 30

AUCTION RESULTS

(LOWER QUALITY)

MAR ’10

AUCTION

MAR ’11

AUCTION

NOV ’11

AUCTION

JUN ’12

AUCTION

APR ’13

AUCTION

NOV ‘13

AUCTION

AUG’14

AUCTION

FEB ’15

AUCTION

NOV ’15

AUCTION

Dates 11-15 Mar ‘10 10-14 Mar ‘11 21-25 Nov ‘11 9-13 Jun ‘12 15-19 Apr ‘13 11-15 Nov ’13 5-8 Aug ‘14 24-27 Feb ‘15 18-21 Nov ‘15

Location Jaipur, India Jaipur, India Jaipur, India Jaipur, India Lusaka, Zambia Lusaka, Zambia Lusaka, Zambia Lusaka, Zambia Jaipur, India

Type Lower Quality Lower Quality Lower Quality Lower Quality Lower Quality Lower Quality Lower Quality Lower Quality Lower Quality

Carats offered* 28.90m 16.83m 10.83m 10.85m 17.34m 5.62m 12.11m 10.1m 5.07m

Carats Sold 22.80m 12.98m 9.82m 3.47m 6.30m 4.94m 11.58m 3.9m 4.45m

No. of companies placing bids 25 44 27 20 25 20 21 21 29

Average no. of bids per lot 8 14 9 3 6 7 7 5 6

No. of lots offered 56 35 26 33 28 21 21 26 23

No. of lots sold 49 34 19 17 23 19 17 19 18

Percentage of lots sold 88% 97% 73% 52% 82% 90% 81% 73% 78%

Percentage of lots sold by weight 79% 77% 91% 32% 36% 88% 96% 39% 88%

Percentage of lots sold by value 89% 99% 80% 60% 76% 91% 88% 88% 95%

Total sales realised at auction US$ 7.2m US$ 10.0m US$ 11.0m US$ 9.0m US$ 15.2m US$ 16.4m US$ 15.5m US$ 14.5m US$ 19.2m

Average per carat sales value US$ 0.31/ct US$ 0.77/ct US$ 1.12/ct US$ 2.61/ct US$ 2.42/ct US$ 3.32/ct US$ 1.34/ct US$3.72/ct US$ 4.32/ct

(lower quality)

Rough emerald and beryl sales


Gemfields Plc 31

Rough emerald and beryl sales (higher quality)


AUCTION RESULTS JUL ‘09

AUCTION

NOV ‘09

AUCTION

JUL ‘10

AUCTION

DEC ‘10

AUCTION

JUL ‘11

AUCTION

MAR ‘12

AUCTION

NOV ‘12

AUCTION

JUL ‘13

AUCTION

FEB ‘14

AUCTION

NOV ‘14

AUCTION

SEPT ‘15

AUCTION

Dates 20-24 Jul ‘09 23-27 Nov ‘09 19-23 Jul ‘10 6-10 Dec ‘10 11-15 Jul ‘11 19-23 Mar ‘12 29 Oct-

2 Nov ‘12 15-19 Jul ‘13 21-25 Feb ‘14 13-17 Nov ‘14

31Aug-

4 Sept ‘15

Location London,

UK

Johannesburg,

SA

London,

UK

Johannesburg,

SA Singapore Singapore Singapore Lusaka Lusaka Lusaka Singapore

Carats offered 1.36m 1.12m 0.85m 0.87m 1.07m 0.77m 0.93m 0.58m 0.84m 0.60m 0.60m

Carats Sold 1.36m 1.09m 0.80m 0.75m 0.74m 0.69m 0.90m 0.58m 0.62m 0.53m 0.59m

No. of companies placing bids 23 19 37 32 38 29 35 36 34 34 37

Average no. of bids per lot 10 13 18 16 16 11 11 8 13 12 11

No. of lots offered 27 19 27 19 25 23 19 18 17 17 19

No. of lots sold 26 14 24 18 18 20 16 18 15 16 18

Percentage of lots sold 96% 74% 89% 95% 72% 87% 84% 100% 88% 94% 95%

Percentage of lots sold by weight 99.8% 97% 94% 86% 69% 89% 98% 100% 74% 89% 98%

Percentage of lots sold by value 82% 76% 79% 98% 77% 94% 90% 100% 86% 89% 88%

Total sales realised at auction US$5.9m US$5.6m US$7.5m US$19.6m US$31.6m US$26.2m US$26.8m US$31.5m US$ 36.5m US$34.9m US$34.7m

Average per carat sales value US$4.40/ct US$5.10/ct US$9.35/ct US$26.20/ct US$42.71/ct US$38.25/ct US$29.71/ct US$54.00/ct US$59.31/ct US$65.89/ct US$58.42/ct

Gemfields Plc 32

AUCTION RESULTS

(RUBY & CORUNDUM) JUNE ’14 AUCTION DEC ‘14 AUCTION APRIL ’15 AUCTION JUNE ‘15 AUCTION DEC ‘15 AUCTION

Dates 12-17 June ‘14 3-8 Dec ‘14 17-22 April ‘15 16-21 June ‘15 14-18 December ‘15

Location Singapore Singapore Jaipur, India Singapore Singapore

Quality Mixed High Low High Mixed

Carats offered 2.03m 85,491 4.03m 72,208 92,136

Carats Sold 1.82m 62,936 3.96m 47,451 90,642

No. of lots offered 62 41 64 46 49

No. of lots sold 57 35 57 28 45

Percentage of lots sold 92% 85% 89% 61% 92%

Percentage of lots sold by weight 90% 74% 98% 66% 98%

Percentage of lots sold by

market value 79% 93% 81% 72% 95%

Total sales realised at auction US$33.5m US$43.3m US$15.9m US$29.3m US$28.8m

Average per carat sales value US$18.43/ct US$688.64/ct US$4.02/ct US$617.42/ct US$317.92/ct

Rough ruby and corundum auctions


Gemfields Plc

Investors

Governments

Local communities

NGOs

JV Partners

Employees

Traders Buyers

Governing

bodies

Fabergé’s

stakeholders

Retail

Consumer

Debt providers

Gemfields: Stakeholders


Gemfields Plc

Investment highlights

IDENTIFYING QUALITY

Proven track record of identifying high quality gemstone deposits, with large scale potential

DRIVING SUPPLY & IMPORTANTLY DEMAND

Promoting and repositioning the industry, alongside other luxury goods. Gemfields is a price-maker, not a price-taker

INVESTMENT & MARKETING

Continued investment and reinvestment to drive long term growth alongside Fabergé’s global brand and heritage

Mine and market strategy – constantly building on our core competencies

STRONG PARTNERSHIPS

Gemfields boasts strong relationships at key international, national and local levels

PROVEN AUCTION PLATFORM

Pioneered an auction platform to ensure a consistent supply of professionally graded gemstones to world markets

Leading global supplier – increase in average higher quality emerald /ct prices from US$4.4 in 2009 to over US$50 in 2015

GROWTH PIPELINE

Leading the way in coloured gemstone exploration, operational efficiencies and mining ethics

STRONG REVENUE GENERATION

Generated +US$600 million in revenue since the Company’s first auction in 2009


Gemfields Plc

Contact us

2nd Floor

23 King Street

London, SW1Y 6QY

United Kingdom

Tel: +44 (0)20 7518 3400 Fax: +44 (0) 20 7197 8193

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