Precious stone miner Gemfields has embarked on an expansion plan which, to date, seems to be reaping good returns. Thus, Gemfields owns 75% of one of the world´s largest sources of emeralds, the Kagem mine in Zambia. Since its purchase three years ago the new management team has turned around the fortunes of the mine. In the year to June 2010 Gemfields delivered a maiden profit of $2.5m (£1.6m) and turnover of $19m from Kagem. Last year, profits went up eight-fold to $21m and turnover to $40m and the company hopes its emerald division will turn over $150m by 2015. Furthermore, the company´s chief executive, Ian Harebottle, has just completed the purchase of a ruby mine in Mozambique. Expected to be run along the same lines as the emerald business, there are high hopes that rubies will be delivering turnover of $150m by 2015 too. Gemfields even owns a sapphire mine in Madagascar, which is at an early stage now but could prove rewarding in years to come. No less interesting, demand for these precious stones seems to have picked up despite the economic malaise. Lastly, the company´s success at Kemba seems to rest on its chief executive´s decision to pursue a ´mine-to-market policy´, by which it helps buyers of its stones to find the best places to sell them, while in the process facilitating traceability; helping to cut counterfeiting and the use of illegally mined stones. Midas says: ‘Shares are 29p and should jump on higher production of emeralds, rubies and sapphires. Buy.'

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