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Gemfields Owner Pallinghurst Restructuring, Looks At London Listing

The Kagem emerald mine in Zambia

Johannesburg Stock Exchange-listed Pallinghurst Resources, which wholly owns coloured gemstone producer Gemfields, is working towards a listing on the London Stock Exchange by the middle of next year. Towards this, the group has aggressively cut costs — including a reduction in top management — and is pursuing a share buyback program.

Group executive director Priyank Thapliyal stepped down in November to become CEO of Jupiter Mines, in which Pallinghurst holds an 18.4 percent stake. Jupiter owns just under half the shares in the Tshipi manganese mine in South Africa.

Pallinghurst co-founder Brian Gilbertson is relinquishing his executive post to become its non-executive chairman. The group’s executive management now consists of CEO Arne Frandsen, Finance Director Andrew Willis and head of the gemstone business Sean Gilbertson.

Pallinghurst is also working on controlling its debt, which had ballooned to $84 million from $17 million in just three years. It is also looking at boosting output. The Montepuez ruby mine in Mozambique appears set to achieve a record $109 million in revenue this year, while the Kagem emerald mine in Zambia has seen production jump exponentially from 7,490 carats in the first quarter of the year to 40,000 carats in the last three months.

The move to a listing on the London Stock Exchange is driven by the group’s view that there is a much stronger investor buying climate in London.

The group is reviewing its Fabergé luxury brand — which was quoted by many stakeholders as having been the primary reason for the sudden increase in debt — and also looking at its Sedibelo platinum mine in South Africa, which ran up a debt of $15 million in its last operating period and is left with cash resources of just $15 million.

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