Gemfields – major $50m cash disposal leaves group able to concentrate upon its mining interests, shares now 5.65p, brokers increased TP is 15p

Mark Watson-Mitchell
Aug 13
4 min read

13.08.2025

Carl Fabergé is reported to have said that:

"There is no point in gems if you cannot turn them into a story."

Well, he was right – and Gemfields (LON:GEM) shares, having touched 6.90p on Monday – are about to sparkle upon the latest piece of corporate news.

Of late this share is proving to be something of an active dealing counter.

I featured the company on Monday 23^rd June, when they were 4.50p and setting a Target Price of 5.75p* for its shares.

They quickly rose to 7.50p, an excellent near 67% gain.

Since then, they drifted off to 5.25p before hitting 6.90p earlier this week.

Now back down to 5.65p – I take the view that they are about to rise again and even break quickly through my new target Price being set at the bottom of this article.

The Business

The group, which is also listed on the Johannesburg Stock Exchange, describes itself as a world-leading responsible miner and marketer of coloured gemstones.

The Gemfields Group (LON:GEM), together with its subsidiaries, operates as a mining company.

It operates through seven segments: Zambia, Mozambique, Platinum Group Metals (PGMs), Steel Making Materials, Corporate, Faberge, and Other.

The company is involved in the emerald, beryl, ruby, and corundum mining activities; wholesale and retail of jewellery and watches through directly operated boutiques.

It is the operator and 75% owner of both the Kagem emerald mine in Zambia (believed to be the world's single largest producing emerald mine) and the Montepuez ruby mine in Mozambique (one of the most significant recently discovered ruby deposits in the world).

Additionally, the group also holds controlling interests in various other gemstone mining and prospecting licences in Zambia, Mozambique, Ethiopia and Madagascar.

The company has developed a proprietary grading system and a pioneering auction platform to provide a consistent supply of coloured gemstones to downstream markets, which is a key component of its business model that has played an important role in the growth of the global coloured gemstone sector.

Fabergé Disposal

Until later this month, the group holds outright ownership of Fabergé –the iconic and prestigious brand of exceptional heritage.

Previously that ownership, the business of which it purchased 18 years ago, enabled the group to optimise positioning, perception and consumer awareness of coloured gemstones through Fabergé designs, advancing the wider group's ‘mine and market’ vision.

Fabergé, which was set up in St Peterburg in 1842, is one of the world's most renowned names in luxury, underscored by a well-documented and illustrious heritage.

The brand sells jewellery and objets d'art through its website, boutiques and via international wholesale partners.

In December last year, as it was facing various headwinds, the group announced that it was carrying out a ‘strategic review’ of its Fabergé interest.

On Monday of this week, 11^th August, the group announced, that for $50m cash, it had agreed to sell the business to SMG Capital, the US-based investment company owned and controlled by the Russian technology entrepreneur Sergei Mosunov.

The purpose of SMG is making strategic investments in luxury brands and innovative businesses with strong heritage and global growth potential.

Management Comment

Upon the deal, Gemfields Group CEO Sean Gilbertson stated that:

"Having initiated our strategic review of Fabergé in response to the considerable challenges Gemfields started facing in Q4 2024, today's sale marks the end of an era for us.

Fabergé has played a key role in raising the profile of the coloured gemstones mined by Gemfields and we will certainly miss its marketing leverage and star power.

I extend our admiration and sincere thanks to the Fabergé team for their fortitude and the progress they have delivered over the years.

Brands as iconic and beautiful as Fabergé do not change hands very often and we wish the team and Mr Mosunov every success as they perpetuate the unrivalled legacy of Fabergé."

Broker’s View

After the deal announcement, analysts Duncan Hay and Tom Price, at Panmure Liberum, increased their Target Price on the group’s shares to 15p (14p), rating them as a Buy.

They reckon that the disposal is a good outcome for the group, freeing up capital just as it finishes the expansion of its Mozambique ruby mine.

Their estimates for the current year to end-December show sales of $195.0m ($213.0m), while turning last year’s losses into pre-tax profits of $29.3m (loss $103.6m), worth $0.01 per share in earnings.

Next year they see $389.0m sales, a massive $123.0m of profits and $0.04 earnings.

My View

The sale proceeds will provide additional working capital while the new processing plant at Montepuez Ruby Mining in Mozambique is operationalised, and mining at Kagem in Zambia is progressively expanded, having been suspended during H1 2025.

With the sale of Fabergé and the discontinuance of other non-core projects, Gemfields is now a more streamlined and focused investment proposition with a strengthened balance sheet.

In late June this year, when setting a new Target Price of 5.75p for the group’s shares, I stated that they represent an excellent gamble on the broker’s estimates of current year and prospective profitability being achieved.

The shares subsequently rose to 7.50p – showing an excellent 66% plus appreciation, before profit-taking clipped them back to the current 5.65p.

On the back of this Fabergé sale, I now set a new easy Target Price of 7p.