Companies: GEM    TNZ   

Sean Gilbertson, banker son of South African mining tycoon Brian Gilbertson, has enlisted the help of Mark Dunhill, whose great-grandfather founded the Alfred Dunhill jewellery and luxury goods group, to produce the first Fabergé eggs made since 1917.
Sean is chief executive officer designate of Gemfields, an ambitious coloured gemstone venture being created by the £62 million reverse takeover of AIM-quoted emerald group Gemfields Resources by Aussie-based Pallinghurst Resources, headed by his father, the former boss of BHP Billiton, the world’s largest mining company.

Peter Carl Fabergé and his assistants made gem-encrusted eggs and presented them to the czars of Russia between 1885 and the Russian Revolution of 1917; Sean Gilbertson, who says he is also involving Fabergé’s descendants in the project, reckons their revival could play a helpful part in establishing emeralds and other coloured gems as serious investment items. He says consistency of supply, allied to these marketing ploys, could curtail damaging output and price fluctuations and cites the success of another AIM counter, Tanzanite One, in achieving precisely that for blue tanzanite stones.

Central to the deal is a £30 million placing at 45p, to which Pallinghurst is subscribing at least £16 million. This will pay for beefing up production at Zambia’s largest emerald producer, the 6.5 million-carats-a-year Kagem mine, where Pallinghurst’s Rox subsidiary awarded the management contract to Gemfields Resources.

The money will also go to absorbing another mine at Kariba, buying options on other gem operations and establishing cutting and polishing facilities at Jaipur. That should cut Gemfields into a good slice of the huge mark-up between mining and retailing.

The new group is buying the licence to the Fabergé name on coloured gems for $1 (50p) from Pallinghurst, which bought it for £25 million. Indian emerald trading dynast Rajiv Gupta, originator of the Gemfields project and vice-chairman, will have a significant stake via his Rox holding.

Sean Gilbertson claims Gemfields can slash Kagem’s costs and boost production four- or fivefold, with better mining methods, optical sorting and a profit share for all employees. ‘Coloured stones are now in the same league as diamonds,’ he boasts, confident he runs no risk of getting a Fabergé egg over his face.