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Pallinghurst targets London, okays share buyback, halves executive pay

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Pallinghurst targets London, okays share buyback, halves executive pay

Photo by Duane Daws
Pallinghurst CE Arne Frandsen

7th December 2017

By: Martin Creamer
Creamer Media Editor

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JOHANNESBURG (miningweekly.com) – Diversified mining and marketing company Pallinghurst, which has moved fast to stabilise the now-integrated coloured gemstone acquisition, is initiating a listing on the main board of the London Stock Exchange, going ahead immediately with a share buyback programme and benefitting from executive headcount and remuneration cutbacks that have halved executive compensation.

“It’s been a very busy four months,” Pallinghurst CE Arne Frandsen told shareholders in Thursday’s stock exchange news service announcement, which highlighted the reining in of Gemfields’ five-fold debt jump, the taking of firm steps to lift revenue on upped premium emerald production in Zambia, the expansion of ruby production in Mozambique, the bolstering of manganese output in South Africa, the reviewing of the historic Fabergé jewellery business, the deleveraging the company balance sheet and the targeting of improved share demand by listing in London.

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Meanwhile, the Montepuez ruby mine in Mozambique is heading for a record $109-million revenue year and the Kagem emerald mine in Zambia has notched up a fivefold increase to 40 000 ct of premium emeralds in the last three months compared with the 7 940 ct of the first quarter of this year.

At the Tshipi manganese mine in South Africa’s Northern Cape, record three-million-tonne production thrust Jupiter Mines into profitability, resulting in a $15-million dividend payout to Pallinghurst this year, with a further $5-million expected in the first half of next year. 

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The Johannesburg Stock Exchange company told shareholders that Gemfields is turning up on better operating performance and record $77-million emerald-auction proceeds and outlined how a reduction of executive numbers, a lowering of remuneration packages and voluntary salary cuts had brought about a halving of executive compensation.

Executive director Priyank Thapliyal has stepped down from his role at Pallinghurst to become the full-time CEO of Jupiter Mines and co-founder Brian Gilbertson will take on nonexecutive chairperson status from end of December 2017, in line with King IV’s governance recommendations.

Going forward, Pallinghurst’s executive management team consists of Frandsen, FD Andrew Willis and gemstones executive Sean Gilbertson.

To focus on extracting carats in the premium emerald category, the number of chisel personnel have been increased at Kagem, where the mothballed Mbuva-Chibolele mining pit, across the Kafubu river, has been reopened.

At the Montepuez ruby mine in Mozambique, bulk sampling is under way at one of the two Megaruma ruby licence areas and at an exploration area in Ethiopia, bulk sampling has been producing results described as encouraging.

All emeralds on offer at October’s auction in Lusaka were sold, generating $21-million at the second-highest-ever average price of $66-plus per carat. 

At the rough ruby auction in Singapore, 605 000 ct were sold at an average price of $90-plus per carat, generating a record $55-million.

Sixty-five per cent of the shares of Pallinghurst are currently held by international investors and 35% by South African investors.

The company expects to list in London in the second half of next year.

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