Gemfields - playing our part in transforming a forgotten sector

Gemfields - playing our part in transforming a forgotten sector 1 December 2014

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Gemfields plc

Legal Disclaimer

playing our part in transforming a forgotten sector

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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

• Gemstones among the first ever recorded luxury goods known to man

• They are not clothing, food, fuel, implements, medicine or anything like that

• In fact, most of these have little or no intrinsic value besides the fact that

they are beautiful, were created at the beginning of time, and mankind has

and always will want to own them

• …and yet, despite their incredible history, legacy and romance, they are

trapped within a sector that has shown little if any meaningful growth and

development over the past 500 years or more……..

Luxury miner


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Gemfields plc

Luxury goods overtime

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18th CENTURY

19th CENTURY

20th CENTURY

Gemfields plc

Gemfields at a glance

• Gemfields Plc - the world’s leading supplier of responsibly-sourced rare coloured gemstones with a vision to become the global “Coloured Gemstone Champion” in emeralds, rubies, sapphires and other select gems

• Key Assets

Kagem (75%), Zambia – world’s largest emerald mine

Montepuez (75%), Mozambique – world’s largest ruby concession

Kariba (50%), Zambia – world’s largest amethyst mine

Fabergé (100%) – a global brand with exceptional heritage

Other growth and expansion opportunities • Including Sri Lankan sapphires, Colombian emeralds and others

• Auctions held since July 2009 have generated US$316m in total revenues • Mine and market: constantly building on our core competencies of:

mining;

distribution;

marketing; and

direct access to the luxury consumer via Fabergé

• Experienced management team with a proven track record of delivery

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Gemfields plc

Market overview – luxury goods and gemstones

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Opportunity: • Repositioning coloured gemstones • Investment into key resources • Providing a consistent supply of high quality, well graded rough • Supported by targeted marketing and promotional campaigns • Associated with Fabergé, one of the world’s most recognised luxury brand names

Overview: • United Nations Commodity Trade database suggests aggregate for world imports of

emeralds, rubies and sapphires reached US$3.2 billion in value (up 19% from 2012) • In 2013, India and Thailand (cutting polishing and treatment centres) reported growth of 311% and 31% in exports of loose emeralds, rubies and sapphires • France, Italy and Switzerland (manufacturing countries) increased imports of gemstones by 10%, 36% and 22% respectively • Trend driven by consumer move towards coloured gemstones in US, Europe and China

Emeralds: • Zambia, Colombia and Brazil each account for approx. one third of the global supply • In Zambia +70% of the value of exported emeralds is created by output from Kagem

Rubies and sapphires: • Myanmar, Sri Lanka and Madagascar generate the majority of global supply • Mozambique has the potential to offset recent reductions in global volumes

The trade has witnessed 30% increase in price for Mozambican rubies following Gemfields inaugural auction

Gemfields plc

Key

emerald mines

sapphire mines

ruby mines

Global Gemstone Deposits and Gemfields Locations

Full Year Results to 30 June 2014

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1

2 4

5 3

6 Our Locations

1 Gemfields’ headquarters, London, UK

2 Kagem Mining Limited, Zambia

3 Kariba Minerals Limited, Zambia

4 Montepuez Ruby Mining Limitada, Mozambique

5 Prospective licences, Madagascar

6 Sapphire JV, Sri Lanka

Fabergé boutiques

Gemfields’ global offices

Gemfields plc

• Average of 2m carats of emerald and beryl produced

per month, (range of 17m carats to 33m carats per

year over last five years)

• 7.3m tonnes of waste and 80,000 tonnes of ore mined

during the period at a stripping ratio of 92

Kagem Mine

• Kagem – 75% owned by Gemfields, comprising an area

of approx 41km2, of which only 1.78km2 is currently being

mined, and encompassing six known emerald bearing belts

• High-wall pushback programme to open up new areas of

ore for future production

• Third phase nearly complete and fourth phase commenced

to extend pit by a further 75 metres

World’s single largest producing emerald mine

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Gemfields plc

Montepuez Ruby Deposit

• Licence covers approximately 340km2

• Believed to be potentially the largest known ruby concession in the world

• 25 year mining and exploration licence (granted Nov 2011)

• Targeting first JORC Resource mid 2016

• Bulk sampling commenced August 2012, progressively increasing in scale

• 8.4 million carats of ruby extracted to date (6.5 million carats for FY14)

• Bulk sampling focussed on the following pits: Maninge Nice, Central, Glass A and Mugloto area

• Exploration programme involves pitting, diamond core drilling and non-core auger drilling

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Rubies and corundum (75% ownership)


Gemfields plc

Entry into sapphires

• JV entered into with East West Gem Investments Limited ('EWGI'), a Jersey registered company in September 2014

• JV to progress opportunities in the Sri Lankan sapphire and gemstone sector via three Sri Lankan subsidiaries which will be 75% and 25% held by Gemfields and EWGI respectively

• Gemfields has acquired 75% operating interests in sixteen exploration licences (covering diverse minerals) for a consideration of US$0.4 million

• The JV will also see Gemfields and EWGI establish a gemstone trading company to focus on sourcing rough sapphires from various sources in the local market

• It is intended that Gemfields' proprietary gemstone grading systems and marketing methodologies will be applied in order to offer the gems to international buyers via Gemfields' proven rough gemstone auction platforms, thereby adding value to Sri Lankan gemstone production, growing the sector and contributing to economic development

• The joint venture agreements seek to develop the broader exploration, mining and sorting infrastructure in Sri Lanka in order to promote a sustainable, transparent and globally competitive gemstone sector

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Gemfields plc

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• Proven ability to deliver a consistent supply of

high quality, well graded rough gemstones to the

downstream market

• Believing “who we sell to” remains as important

as “how much we sell for”

• Supporting increased scale of coloured gemstone

beneficiation and jewellery manufacturing

• Resulting in improved, consistent and predictable

margins for all

• Demand for Gemfields products increasing

across all major markets

• Accompanied by a steady increase in achieved

per-carat rough prices

• Sales process open and available to all interested

parties

Providing a consistent supply

Gemfields plc

Targeted marketing

• Mila Kunis Global Brand Ambassador has continued to raise awareness for the Company

• Collaborative marketing and corporate social investment projects (Project Blossoming and ‘100 Good Deeds Bracelet’)

• International advertising campaign, photographed by Mario Sorrenti, helped to position Gemfields as a household name within the luxury category

• Sponsorship initiatives in North America, Europe, India and Asia including; Mining Indaba (Cape Town, February); Retail Jewellery

Awards (India, April); and IIFA Awards (India, July)

Hosted events at Couture in (Las Vegas, June) and India, visiting Mumbai, Delhi, Bangalore and Calcutta

• Collaborations with leading jewellery designers including Alexandra Mor, Amrapali, Fabergé, Shaun Leane, Stephen Webster, Theo Fennel and ‘The Gem Palace’

• Assisted in the promotion of ‘Emerald’, an illustrated coffee-table book published in by Thames and Hudson

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Gemfields plc

By definition:

• “… how companies manage the business processes to produce an overall positive impact on society; most notably those

societies more directly associated to the company…”

• The ‘compliance’ approach – reacting to pressure from governments, investors, consumers, etc. focusing on corporate

governance and risk management

• The ‘in-good-spirit’ approach – goes beyond compliance and aims to be a leader within its sector, creating a tangible

business case for CSR, acting as a responsible ‘citizen’ in society

Gemfields’ approach:

• Gemfields believes that the true beauty of our gems lies in the manner in which they are managed and readied at every stage

of the process. we aim to ensure that our local communities grow in value over time; in line with value of our gems

• Focussing on sustainability and supporting, among others

• Schools

• Medical clinics

• Local organic farming projects

• Working with selected global NGO’s

• In partnership with other stakeholders


Committed to sustainability

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Gemfields plc

Moving ahead with Fabergé

• A global brand with exceptional heritage

• Fabergé provides Gemfields with a direct route into the luxury goods market - and a greater influence over the global positioning for coloured gemstones and their growth in demand

• Advance ‘Mine and Market’ vision

• Strengthened executive team – appointment of Robert Benvenuto as President and COO on 28 October 2013. During 13-year tenure at Harry Winston, he served as CFO, COO and Co-CEO

• Improved unit sales in FY14

• Fabergé awarded ‘Best International Brand Collection 2014’ prize at the Andrea Palladio International Jewellery Awards 2014 in Italy for its Spiral, Treillage and Emotion collections

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(100% ownership)


Gemfields plc

5.9 5.6

7.5

19.6

31.6

26.2 26.8

31.5

36.5

Jul 09 Nov 09 Jul 10 Dec 10 Jul 11 Mar 12 Nov 12 Jul 13 Feb 14

Total sales realised at auction (US$m)

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The Results

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Gemfields plc vs FTSE All share & AIM Index

FTSE All Share Gemfields plc AIM Index

Emerald Prices have Risen Significantly

in the Past Decade

Gemfields plc

Exciting times

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Gemstone PLC

Contact us

Gemfields Plc

54 Jermyn Street

8th Floor

London

SW1Y 6LX

United Kingdom

Tel: +44 (0)20 7518 3400

Fax: +44 (0) 20 7197 8193

Presentations & Public Speaking

Gemfields - playing our part in transforming a forgotten sector