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Gemfields releases updated ‘G-Factor for Natural Resources’ figures to 31 December 2023
Gemfields Group Limited
Incorporated in Guernsey. Guernsey registration Number: 47656
South African external company registration number 2009/012636/10
Share code on JSE: GML / AIM: GEM
ISIN: GG00BG0KTL52 | LEI: 21380017GAVXTCYS5R31
("Gemfields" or the "Company")
Gemfields releases updated 'G-Factor for Natural Resources' figures to 31 December 2023
LONDON, 24 APRIL 2024
In July 2021, Gemfields announced the 'G-Factor for Natural Resources', a measure promoting greater
transparency regarding the level of natural resource wealth shared with the governments of host
countries, whether from the mining, oil, gas, timber or fishing sectors.
Today, Gemfields announces updated figures to 31 December 2023 and again invites governance
bodies, extractive companies, industry observers and host governments to adopt the G-Factor for
Natural Resources in order to improve transparency and accountability regarding the share of natural
resource wealth paid to a host country's government.
The G-Factor for Natural Resources is intended to be an uncomplicated indicator of the percentage of
a natural resource company's revenue that is paid to the host country's government in primary and
direct taxes (plus, where the host government is a shareholder, dividends). As such, it is an indicator
of the share of natural resource wealth paid to a host country's government. It is also an indicator
of the efficiency of natural resources companies in converting those natural resources into funds
for the host government. The G-Factor for Natural Resources takes its name from the "g's" in
"government", "governance" and "good practice".
"Given the desire by governments to increase their participation in their country's natural resources, a practical
measure allowing a direct comparison of the sharing of natural resource wealth assists greatly in identifying responsible
custodians of host nations' resources. The G-Factor for Natural Resources provides a simple 'school score' allowing
observers to assess the relative efficiency of extractives companies in converting natural resources into wealth for host-
nations. In order to better align with practices in other countries in our region, we have this year added export duties
and levies as an additional parameter in the calculation. We hope the G-Factor for Natural Resources will be
voluntarily adopted by other companies, insisted upon by host governments and incorporated into projects such as
Extractive Industries Transparency Initiative ("EITI")." said Sean Gilbertson, Gemfields CEO.
G-Factor for Natural Resources computations for Gemfields' two key mining subsidiaries (the Kagem
emerald mine in Zambia and the Montepuez ruby mine in Mozambique) are set out below:
Montepuez Ruby Mining G-Factor G-Factor G-Factor G-Factor
Limitada (Mozambique), USD (1 Year) (5 Years) (10 Years) (since Gemfields
million 2023 2019-2023 2014-2023 acquired 75%)
2012-2023
(A) Mineral Royalties Paid 14.3 52.2 98.9 98.9
(B) Corporation Tax Paid 38.9 89.1 158.4 158.4
(C) Dividends to Government (if - - - -
applicable)
(D) Export Taxes/Levies - - - -
Total to Government (A+B+C+D) 53.2 141.4 257.4 257.4
(E) Total Company Revenue 151.3 586.9 1,054.4 1,055.2
G-Factor, being (A+B+C+D)/E 35% 24% 24% 24%
NOTES: Gemfields announced
the completion of its
acquisition of 75% in
MRM on 27 February
2012. Mining
commenced 2012.
Auctions commenced
2014.
Kagem Mining Limited G-Factor G-Factor G-Factor G-Factor
(Zambia), USD million (1 Year) (5 Years) (10 Years) (since
2023 2019-2023 2014-2023 Gemfields
acquired 75%)
2008-2023
(A) Mineral Royalties Paid 5.5 27.0 52.4 64.4
(B) Corporation Tax Paid 17.7 42.1 87.7 99.2
(C) Dividends to Government (if 5.0 6.5 15.0 19.0
applicable)
(D) Export Taxes/Levies - 12.4 12.4 12.4
Total to Government (A+B+C+D) 28.3 88.1 167.5 195.1
(E) Total Company Revenue 92.7 449.6 788.4 1,008.9
G-Factor, being (A+B+C+D)/E 31% 20% 21% 19%
NOTES: Gemfields completed
the acquisition of a
75% interest in
Kagem on 5 June
2008.
The 'G-Factor for Natural Resources'
The G-Factor for Natural Resources would typically be calculated by each standalone company
engaged primarily in the extraction and sale of natural resources, whether in the mining, oil,
gas, timber or fishing sectors. Accordingly, multi-national natural resource companies would
publish the G-Factor for Natural Resources for each operating subsidiary engaged primarily in the
extraction and sale of natural resources.
The G-Factor for Natural Resources is expressed as a percentage and is calculated as:
(Ap + Bp + Cp + Dp)/Ep
where:
- A = the total mineral royalty (tax on revenue) paid by the reporting company to the host
country government during the period
- B = the total corporation tax (tax on profit) paid reporting company to the host country
government during the period
- C = the dividends paid by the reporting company to the host country government during
the period (where the host country government is a shareholder in the reporting company)
- D = the total export taxes or export levies paid by the reporting company to the host
country government during the period
- E = the total revenues of the reporting company during the period
- p = the relevant period, typically calculated for each of (i) the prior year; (ii) the preceding
5 years and (iii) the preceding 10 years
- The sums actually paid during the period (rather than the sums accrued or falling due
during the period) are used for the purposes of A, B, C and D.
No measure of this type is perfect and it is recognised that:
a. the G-Factor for Natural Resources is a "rule-of-thumb" – while it has broad application and
is a practical indicator, it is not suited to every situation;
b. there are numerous additional and indirect taxes which are not included in the G-Factor for
Natural Resources and which further increase the contribution made to host nations by
natural resource companies. Such taxes include but are not limited to area/surface charges,
social security contributions, taxation on the salaries of employees, import and export
duties, VAT, etc; and
c. the variety and variations in natural resource deposits, types and occurrences lessens the
ability to make direct comparisons between companies.
-ENDS-
Further information on Gemfields Group Limited can be found at:
GEMFIELDSGROUP.COM
To join our investor mailing list, contact us on:
ir@gemfields.com
For any press enquiries please contact us on:
gemfields@camarco.co.uk
ENQUIRIES
GEMFIELDS Sean Gilbertson / David Lovett / Ian Hughes
ir@gemfields.com
T: +44(0) 20 7518 3400
SPONSOR (JSE) Investec Bank Limited
NOMINATED ADVISER Liberum
(AIM) & BROKER Scott Mathieson / John More / Anake Singh
T: +44(0) 20 3100 2222
FINANCIAL PR / IR Camarco
Gordon Poole / Emily Hall
T: +44(0) 20 3757 4980
ADDITIONAL INFORMATION ON GEMFIELDS
Gemfields is a world-leading responsible miner and marketer of coloured gemstones. Gemfields is
the operator and 75% owner of both the Kagem emerald mine in Zambia (believed to be the
world's single largest producing emerald mine) and the Montepuez ruby mine in Mozambique (one
of the most significant recently discovered ruby deposits in the world). In addition, Gemfields also
holds controlling interests in various other gemstone mining and prospecting licences in Zambia,
Mozambique, Ethiopia and Madagascar.
Gemfields' outright ownership of Fabergé - an iconic and prestigious brand of exceptional heritage
- enables Gemfields to optimise positioning, perception and consumer awareness of coloured
gemstones through Fabergé designs, advancing the wider group's "mine and market" vision.
Gemfields has developed a proprietary grading system and a pioneering auction platform to
provide a consistent supply of coloured gemstones to downstream markets, a key component of
Gemfields' business model that has played an important role in the growth of the global coloured
gemstone sector.
GEMFIELDS
GEMFIELDS.COM | INVESTORS |FOUNDATION
INSTAGRAM | FACEBOOK | X | YOUTUBE
FABERGÉ
FABERGÉ.COM | INSTAGRAM | FACEBOOK | X | YOUTUBE
KAGEM MINING LINKEDIN
MONTEPUEZ RUBY MINING LINKEDIN
Date: 24-04-2024 08:00:00
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