Faberge owner Gemstones's share price crashed 32% on Tuesday morning. Picture: BLOOMBERG
Faberge owner Gemstones's share price crashed 32% on Tuesday morning. Picture: BLOOMBERG

Ruby prices obtained by Gemfields at an auction in Singapore last week appear to have underwhelmed its investors.

Its share price crashed 32% to R1.25 on Tuesday morning, with news that Zambian tax authorities had cleared its Kagem mine of allegations of evasions failing to cheer shareholders.

Its share price later rebounded, gaining 3.8% to R1.90 by 10.10am.

Gemfields said it sold $55.3m worth of rough rubies from its Montepuez mine in Mozambique, averaging $84.32/carat.

This was the 11th auction of rough rubies from Montepuez, and attracted 51 bidders, bringing the total to $462.6m. 

In a separate statement, Gemfields said a tax investigation into its Kagem mine in Zambia had been concluded with no findings of wrongdoing or late payment.

On August 17, Gemfields warned shareholders that the Zambian Revenue Authority served two search warrants during an unannounced visit to the offices of its Kagem mine, which it owns in partnership with Limpopo Polygraphs.

“The Zambian Revenue Authority has confirmed that their investigation into these matters is now closed,” the authority said in Tuesday morning's statement.

Gemfields — previously called Pallinghurst Resources  — owns emerald and ruby mines along with jewellery brand Fabergé, with its stated goal to become “the De Beers of coloured gemstones”.

laingr@businesslive.co.za