Gemfields plc

('Gemfields' or the 'Company')

Gemfields plc (AIM: GEM) presents an operational update for the three month period ending 30 September 2015, the first quarter of the financial year 2016. All figures are approximate and unaudited. Unless otherwise stated, the term 'carats' includes both emerald and beryl in relation to the Kagem emerald mine, and both ruby and corundum in relation to the Montepuez ruby deposit.

Highlights

Emeralds

· Production summary for 75%-owned Kagem Mining Limited ('Kagem') in Zambia for the quarterending 30 September 2015:

§ Production of 7.5 million carats of emerald and beryl (versus 6.3 million carats in the quarter ending 30 September 2014);

§ Average grade of 237 carats per tonne (versus 214 carats per tonne in the quarter ending 30 September 2014);

§ Total operating costs^(a) of USD 11.1 million (versus USD 10.3 million in the quarter ending 30 September 2014), largely on account of the increased scale of mining and exploration activities being carried out across the mining licence;

§ Unit operating costs^(b) of USD 1.48 per carat (versus USD 1.63 per carat in the quarter ending 30 September 2014). On a cash basis^(c), unit operating costs were USD 1.16 per carat (versus USD 1.48 per carat in the quarter ending 30 September 2014); and

§ Cash rock handling unit costs of USD 2.12 per tonne (versus USD 2.91 per tonne in the quarter ending 30 September 2014), with the increased scale of mining driving increased overall efficiencies.

· Updated JORC Resource and Reserves statement for Kagem announced in September 2015 with a total measured, indicated and inferred mineral resource of 1.8 billion carats of emerald and beryl and proven and probable ore reserves of 1.1 billion carats of emerald and beryl, giving a projected 25 year life of mine ('LoM') and an Net Present Value ('NPV') of USD 520 million (based on 10% base case discount rate);

· September 2015 auction of predominantly higher quality rough emerald held in Singapore generated revenues of USD 34.7 million; and

· Gemfields' next auction of predominantly lower quality rough emerald and beryl from its Kagem mine is scheduled to take place later this month.

Rubies

· Production summary for 75%-owned Montepuez Ruby Mining Limitada ('Montepuez') in Mozambique for the quarterending 30 September 2015:

§ Focus on delineating additional areas of higher quality alluvial resource resulted in the production of0.5 million carats of ruby and corundum (versus 2.9 million carats in the quarter ending 30 September 2014), with a 96% increase in the volume of higher quality rubies recovered;

§ Average grade of 7 carats per tonne (versus 41 carats per tonne in the quarter ending 30 September 2014), attributed to a greater proportion of higher quality but lower grade alluvial ore deposit processed during the quarter;

§ Total operating costs^(d) of USD 6.1 million (versus USD 4.3 million in the quarter ending 30 September 2014), due to the increase in the scale of exploration, processing and mining activities;

§ Unit operating costs^(b) of USD 12.20 per carat (versus USD 1.48 per carat in the quarter ending 30 September 2014) driven by the shift in focus to mining and processing ore from areas of higher quality but lower grade, and a steady increase in the overall scale of operations. On a cash basis^(c), unit operating costs were USD 10.20 per carat (versus USD 1.28 per carat in the quarter ending 30 September 2014); and

§ Cash rock handling unit costs of USD 4.50 per tonne (versus USD 6.93 per tonne in the quarter ending 30 September 2014).

· Maiden JORC Resource and Reserves statement for Montepuez announced in July 2015 with a total indicated and inferred mineral resource of 467 million carats of ruby and corundum and probable ore reserves of 432 million carats of ruby and corundum, giving a projected 21 year life of mine and an NPV of USD 996 million (based on 10% base case discount rate); and

· Gemfields' next auction of predominantly higher quality rubies from its Montepuez deposit is expected to take place in December 2015.

Amethysts

· September 2015 auction of predominantly higher quality rough amethyst held in Singapore generated revenues of USD 0.44 million at an average realised price of 4.32 US cents per carat, the highest ever achieved at any Gemfields' amethyst auction.

Fabergé

· Gross profits from sales orders agreed^(d) during the quarter ending 30 September 2015 increased by 61% when compared to the quarter ending 30 September 2014. The gross profit margin on sales orders agreed increased from 30% to 51% over the same period;

· The number of items included in sales orders agreed increased by 241% while revenues from sales orders agreed fell by 4% (with the results for the quarter ending 30 September 2014 being skewed by the sale of a single exceptionally high value item);

· Total operating costs for the quarter ending 30 September 2015 increased by 6% when compared to the quarter ending 30 September 2014, largely due to an increase in advertising spend; and

· Wholly-owned Fabergé Ltd won the prestigious Grand Prix d'Horlogerie de Genève (GPHG) held in October 2015, the Swiss watchmaking industry's highest honour, in the 'Ladies Hi-Mechanical' category with its 'Lady Compliquée Peacock' timepiece. The award cements Fabergé's position as a leader in the watch-making industry.

Ian Harebottle, CEO of Gemfields, commented:

'I am pleased to report on Gemfields' very positive start to the new financial year, with the Maiden JORC Resource and Reserves statement for Montepuez published in July 2015 and the updated statement based on continued open pit operation for Kagem published in September 2015, underpinning the significant inherent value and future potential of each of these assets.

Our production at Kagem achieved a 19% increase compared to the same period in the prior year, with the bulk sampling operations at Fibolele and Libwente progressing at a steady pace. Mining and bulk sampling operations at Montepuez were focussed on the Mugloto block, where the higher value deposit is spread over a large area, as well as a newly identified area with the potential to produce material of exceptional quality. The combination of these efforts resulted in an overall decrease in grade but is more than supported by a 96% increase in higher quality rubies recovered. We maintain our production target for the 2016 financial year of 25 to 30 million carats for rough emeralds and 8 million carats for rough ruby.

Fabergé's new watch collection has received excellent reviews since being launched and the 'Lady Compliquée Peacock' timepiece won the prestigious Grand Prix d'Horlogerie de Genève in Switzerland, in late October.We were honoured to win this award and for this new product line in what is clearly a highly competitive market. Significantly, it provides solid evidence that the strategy Gemfields has implemented at Fabergé is succeeding and we look forward to its continued success across the remainder of its new product launches.

Demand for coloured gemstones continues to be firm as we look forward to our next lower quality rough emerald and beryl auction later this month and our next auction of predominantly higher quality rubies from Montepuez in December 2015.'

Explanatory Notes:

(a) Total operating costs include mining and production costs, selling, general and administrative expenses, and depreciation relating to both PPE-related capital expenditure and capitalised waste stripping costs, but exclude capitalised costs and mineral royalties.

(b) Unit operating costs are calculated as total operating costs divided by the total gemstone production during the period.

(c) Cash operating costs include mining and production costs, capitalised costs, selling, general and administrative expenses, and exclude PPE-related capital expenditure, depreciation and mineral royalties.

(d) Sales orders agreed are sales that Fabergé has agreed and confirmed with customers during the reporting period. Payment and/or delivery may take place later.

KAGEM EMERALDS

Production and OperationsUpdate

The 75%-owned Kagem emerald mine is the single largest emerald mine in the world. The key production parameters by quarter and financial year are summarised below:

(a) Cash operating costs include mining and production costs, capitalised waste stripping costs, selling, general and administrative expenses, and exclude PPE-related capital expenditure, depreciation and mineral royalties.

(b) Total operating costs include mining and production costs, selling, general and administrative expenses, and depreciation relating to both PPE-related and capitalised waste stripping costs, but exclude capitalised waste stripping costs and mineral royalties.

(c) As at 30 September 2015, a total of approximately USD 63.1 million of waste moving costs has been capitalised and is being amortised as and when the associated ore is mined. The balance of capitalised waste moving costs, net of amortisation, as at 30 September 2015 amounted to USD 23.3 million.

In September 2015, Gemfields published its updated JORC resource and ore reserves statement for Kagem emerald mine with measured, indicated and inferred mineral resource of 1.8 billion carats of emerald and beryl at in-situ grade of 281 carats per tonne and proven and probable ore reserves of 1.1 billion carats of emerald and beryl at ore grade of 291 carats per tonne. Based on the Competent Persons Report produced by SRK Consulting (UK) Limited ('SRK'), the projected LoM for the Kagem project is 25 years with projected undiscounted real cash flow over the LoM of approximately USD 1.59 billion. The independent technical economic model shows a post-tax NPV of USD 520 million based on a 10% base case discount rate.

The fourth high wall pushback at the Chama pit progressed during the period and completed in September 2015. A total of 4.0 million tonnes of waste was moved during the quarter. We have revisited our mine plan for the Chama pit, following the updated resource and reserves statement from SRK (based on a continued open pit operation) and are now looking at the option of continued waste stripping over the life of the mine. This will ensure that two to three years of ore is available for mining at any given point in time. In addition, the exploration and bulk sampling activities at the Fibolele and Libwente pits are progressing well and thus far yielded some promising results.

Emerald Auction Update

The September 2015 auction of predominantly higher quality rough emerald held in Singapore saw 0.59 million carats being sold, representing 88% of the value offered and 98% of the weight offered, and generating auction revenues of USD 34.7 million. The auction yielded an overall average value of USD 58.42 per carat, the third highest average price achieved for rough emerald auction.

The auction results are summarised below:

Gemfields' next auction will be of predominantly lower quality rough emerald and beryl and is scheduled to take place this November.

MONTEPUEZ RUBIES

Production and Operations Update

The ongoing mining and bulk sampling operations at the Montepuez ruby deposit in Mozambique, in which Gemfields has a 75% interest, continue to provide positive results and sound insight into the geology of the deposit throughout the licence area. The ongoing test work has led to an enhanced understanding of the ore characteristics, supported the identification of additional higher value (but lower grade) alluvial ore resources and improved throughput at the existing semi-mobile processing plant. These improvements saw an approximate 4% increase in tonnes processed when compared to the same quarter in the prior year.

The key production parameters by quarter are summarised below:

(a) Cash operating costs include mining and production costs, capitalised mining and production costs, selling, general and administrative expenses, and exclude capital expenditure, depreciation and mineral royalties.

(b) For the period to 30 June 2014, mining and production costs were capitalised. The total operating costs included security costs, selling, general and administrative expenses and depreciation, but exclude mineral royalties and capitalised mining and production costs. Following the reclassification of the Montepuez Ruby Mine from intangible unevaluated asset under IFRS 6 to evaluated mining property, mining and production costs are recognised in the income statement from 1 July 2014. From 1 July 2014, the total operating costs include mining and production costs (including security costs), selling, general and administrative expenses, and depreciation, but exclude mineral royalties.

(c) Total operating costs in the quarter ending September 2014 have been restated due to a change in accounting treatment of mining and processing costs as stated above.

In the quarter to 30 September 2015 total ore mined amounted to 136.9 thousand tonnes (versus 81.7 thousand tonnes for the quarter to 30 September 2014), of which 72.8 thousand tonnes were processed (versus 69.9 thousand tonnes for the quarter to 30 September 2014). With the key focus being on mining the Mugloto block, where the higher value deposit is spread over a large area, as well as the delineation of an additional and recently identified area that has the potential to produce material of exceptional quality resulted in a reduced overall grade of 7 carats per tonne and the production of 0.5 million carats of ruby and corundum but with a commensurate 96% increase in the volume of higher quality rubies recovered.

In July 2015, Gemfields published its maiden JORC resource and ore reserves statement for Montepuez ruby mine with indicated and inferred mineral resource of 467 million carats of ruby and corundum at in-situ grade of 62.3 carats per tonne and probable ore reserves of 432 million carats of ruby and corundum at diluted ore grade of 15.7 carats per tonne. Based on the Competent Persons Report produced by SRK, the projected LoM for the Montepuez project is 21 years with projected undiscounted real cash flow over the LoM of approximately USD 2.76 billion. The independent technical economic model shows a post-tax NPV of USD 996 million based on a 10% base case discount rate and an IRR of 311.7%.

The construction of the new Montepuez camp commenced in March 2015. A total of 102 housing units, a recreation unit, canteen and new kitchen will be built. The first set of new housing will be ready for inhabitants by the end of November 2015. Completion and handover of the camp and the grounds is scheduled for early 2016.

Ruby Auction Update

Gemfields' next auction of predominantly higher quality rough ruby is expected to take place in December 2015.

KARIBA AMETHYSTS

Gemfields' third auction of higher quality rough amethyst from Kariba amethyst mine in Zambia in which Gemfields holds 50% interest was held in Singapore in September 2015 alongside the higher quality rough emerald auction. The auction saw 11.0 million carats on offer, with 11 of the 16 lots offered being sold, generating auction revenues of USD 0.44 million at an average realised value of 4.32 US cents per carat (an increase of 144% compared to the 1.77 US cents per carat realised in the February 2015 auction).

FABERGÉ

Fabergé's first significant print advertising campaign since Christmas 2013 began in September 2015, and will continue throughout the Christmas period. The campaign focuses on the key Emotion, Devotion and new timepiece collections.

Two of the four recently launched Fabergé timepieces − the Lady Compliquée Peacock and the Summer in Provence - were nominated for the prestigious 2015 Grand Prix d'Horlogerie de Genève (GPHG). This was noted as a considerable achievement in itself and resulted in significant editorial coverage across the watch and wider luxury goods publications. The Lady Compliquée Peacock went on to be chosen as the winner of the 'Ladies High Mechanical' category, cementing Fabergé's position as a new leader in the watch business.

In July 2015, Fabergé's retail partner in Bangkok, Cadeaux, held a grand opening and press call. The event attracted significant interest from local media and a number of sales were made. By the end of September 2015, Fabergé operated four of its own retail outlets and a further 22 points of sale with retail partners.

COLOMBIA

In September 2015, Gemfields entered into binding but conditional agreements to acquire controlling interests in two emerald projects with operations and prospects located predominantly in the Boyacá state in Colombia. The first project relates to the Coscuez Emerald Mine in the Boyacá department, Colombia and is the acquisition of a 70% interest in a Colombian company which will, on completion, hold mining contract no. 122-95M (the 'Coscuez Licence', which is presently held by Esmeracol S.A.). Located on the 'Muzo formation', the Coscuez Licence covers an area of 47 hectares, with the mine having been in operation for over 25 years and known to have produced some of the finest emeralds from Colombia. Geological due diligence studies were carried out by Gemfields between October 2013 and August 2014. Completion is expected to occur by March 2016.

The second project relates to selected exploration prospects held by ISAM Europa S.L. via the acquisition of 75% and 70% interests in two Colombian companies holding rights in respect of mining licence applications and assigned concession contracts respectively (of which eight have been approved and issued). The total package of mining licence applications and assigned concession contracts cover approximately 20,000 hectares.

Sri Lanka

Gemfields continued setting up procedures and equipment required for trading operations. Placement of the key management team has been completed. Sapphire trading is expected to commence in the quarter ending December 2015 and associated supply chain mechanisms being developed.

ETHIOPIA

Following completion of the acquisition of 75% interest in an emerald exploration licence, through the Ethiopian registered Web Gemstone Mining plc, an exploration team was recruited and established on site to help develop a better understanding of the licence area. A base camp has been established on the concession and a team was stationed there in June 2015. Exploration work has recently commenced, consisting of a ground survey, mapping, and preparation of base plans. A manual pitting and trenching exercise has been initiated on a promising area in the northern part of the licence, selected on geological indicators and past artisanal activity.

CORPORATE & CASH

At 30 September 2015, Gemfields had cash and cash equivalents of USD 41.1 million and total debt outstanding of USD 60 million, which includes the outstanding debt balance of USD 30 million at Kagem with Barclays Bank, a USD 20 million loan from Macquarie Corporate Holdings Pty Limited (UK Branch) and a USD 10 million loan from Pallinghurst Resources Limited. In the quarter to 30 September 2015, Gemfields had total sales, general and administrative expenses of USD 11.5 million.

ENQUIRIES:

Notes to Editors:

Gemfields plc is a leading supplier of responsibly sourced coloured gemstones and is quoted on the AIM market of the London Stock Exchange (ticker: GEM) where it is a constituent of the AIM50 index.

Gemfields is the operator and 75 per cent. owner of both the Kagem emerald mine in Zambia (believed to be the world's single largest producing emerald mine) and the Montepuez ruby deposit in Mozambique (one of the most significant recently discovered ruby deposits in the world). In addition Gemfields also holds a 50 per cent.

interest in the Kariba amethyst mine in Zambia, as well as controlling interests in various other gemstone mining and prospecting licenses in Zambia, Mozambique, Colombia, Ethiopia, Madagascar and Sri Lanka.

Gemfields' outright ownership of the Fabergé brand - an iconic and prestigious brand of exceptional heritage - enables Gemfields to optimise positioning, perception and consumer awareness of coloured gemstones, advancing the Group's 'mine and market' vision.

Gemfields has developed a proprietary grading system and a pioneering auction and trading platform to provide a consistent supply of quality coloured gemstones to the global downstream markets. This is a key component of the Company's business model which the Directors believe has played an important role in the appropriate distribution and associated resurgence of the global coloured gemstone sector.

www.gemfields.co.uk