South African gemstone company Afgem, which mines tanzanite in east Africa, on Thursday reported a R17,8-million attributable loss for the year to end March, due largely to the appreciation in the rand.
This was despite the fact that the company lifted operating income from R5,3-million to R9,4-million, Afgem’s financial director Mark Summers said in a statement.
From a foreign exchange gain of R16,6-million in the 2002 year, the currency’s strength cost Afgem R13,3-million in the 2003 year. In addition, the group had a stock write-down of R7,6-million due to the strengthening of the rand.
The company completed development of its tanzanite mine early this year. Its current focus is the exploration, mining, beneficiation and marketing of tanzanite, an exceptionally rare violet blue gemstone only found in the foothills of Mount
Kilimanjaro.
Demand for and prices of tanzanite were encouraging during the year under review, with revenue for the year up 79% to R74-million. Sixty-three percent of revenue was generated from the sale of rough tanzanite.
The group also established Afgem Diamonds Limited.
”Given our expertise in developing and operating low cost, small-medium sized gemstone mines, and in the context of the new minerals legislation, we regard ourselves as perfectly poised to take advantage of opportunities in the South African diamond industry,” said Mike Nunn, Afgem chief executive.
”That said, Afgem Diamonds is a separate entity, with our tanzanite business maintaining its own focused management team.”
In November last year, the American Gem Trade Association named tanzanite a December birthstone, adding to a list that had not been amended since 1912, the company said. Tanzanite is the fourth most popular gemstone in the United
States. – Sapa