Gemfields Group Limited (GML) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. My name is Bruce Cleaver, and I am the Chair of Gemfields Group Limited. This is the Annual General Meeting of Gemfields Group Limited. To avoid repetition, I shall abbreviate Gemfields Group Limited to Gemfields. A quorum for this meeting is 3 members entitled to vote whether they are present in person, by corporate representative or by proxy. As there is a quorum present, and it is now 10:00 a.m. BST, I declare this meeting formally open. If you wish to ask questions electronically on the website, do please submit them now. This meeting is to consider 7 ordinary resolutions, 2 special resolutions and 2 nonbinding advisory votes. All of these resolutions have the full support of the Board of Directors of Gemfields and have been set out in full in the notice of AGM. The notice of AGM was distributed to Gemfields shareholders on 29 April 2026 and sets out the resolutions now to be proposed. In the absence of any objections, I shall take the notice of this meeting as read. In accordance with Gemfields articles of incorporation, voting will be by way of a poll and every shareholder present in person or represented by proxy and entitled to vote shall be entitled to one vote for every share held. Gemfields registrar Computershare have been appointed official scrutineers of the poll. Only shareholders present in person, by corporate representative or by proxy are entitled to vote. Shareholders present in person who have already lodged proxy forms prior to the meeting should not complete a poll card unless they have an intention to change prior votes cast. Shareholders who are participating online are able to view a live webcast of the meeting via the London Stock Exchange Group's SparkLive service. Shareholders who wished to ask questions remotely were requested to request to join a conference call line or to pre-submit written questions by 4:00 p.m. BST on Monday, 22 June 2026. We did not receive any request to join the conference call, and therefore, we will not have any questions asked via the conference call line. As a reminder, if you wish to ask a question electronically via the website, do you please submit this now? We will now pause the meeting for 30 seconds to allow final submission of questions via the webcast. [Break]

Thank you. We will now take questions from shareholders on the business of the meeting. Starting with questions from those shareholders in person today and then those that were pre-submitted in advance by e-mail. We will then move to questions received electronically via the webcast. Do we have any questions from shareholders in person in the meeting? If so, please state your name and which shareholder you are representing. We have no questions from shareholders in person. I will now ask the Company Secretary to confirm whether we received any pre-submitted written questions.

No, Mr. Chairman, no pre-submitted questions via e-mail.

Thank you. We have received a number of questions electronically on the website and will now read these and answer them. I will now ask the company secretary to please read out the webcast questions.

Thank you, Mr. Chairman. The first question is from Mr. Graham Stratton. The question is as follows: have the security concerns in Mozambique improved around Montepuez Ruby Mining area and all your mining rights and claims being exploited by illegal mining?

I'm going to ask Mr. Sean Gilbertson, the company's CEO, to answer that question. Sean?

Thank you very much, Bruce. In short, the answer is, no. Mozambique does still remain an extraordinarily difficult environment in which to operate. We do still see very significant influxes of illegal miners earlier this year, approximately 1,000 people per day and presently running at about 700 persons per day. And undoubtedly, that does also contribute to a degree of our grade degradation given the loss of ore to the illegal mining syndicates. In addition to illegal mining, we continue to experience issues with insurgency related attacks and between the 30th of April and about the middle of May, a number of villages ranging from about 15 to 35 kilometers away from MRM endured attacks by groups that were initially suspected of being insurgents, a number of village homes and also churches were burned. The authorities did subsequently make a number of arrests, but shortly thereafter, there were further attacks about 29 kilometers and 25 kilometers east and southeast, respectively, from MRM. That did cause us to suspend operations for about 24 hours as a precautionary measure. But since then, our operations have been unaffected. And then more recently, on the 2nd of June, we issued a media advisory noting that a police officer had shot and killed an illegal miner on the MRM license and that subsequently, those illegal miners had shot and killed another police officer. So I'm afraid at the moment, Mozambique does still offer very significant operating challenges for us from a security perspective.

Thank you. Secretary?

The next question is also from Mr. Stratton. The question is as follows: given the drive in other African locations for greater state ownership of natural resources, for example, Ghana, can you give shareholders assurance that you have secure mining rights, coupled with long security of tenure in both Zambia and Mozambique?

A very topical question and Gemfields has, for some years, promoted a measure called the G-Factor for Natural Resources in order to give all stakeholders a much simpler view of what percentage of the natural resource revenue is being paid to the host government. And the G-Factor for MRM in Mozambique runs at a pretty staggering 23% of revenue paid in the form of mineral royalty and corporation taxes and across the way in Zambia, the G-Factor stands at 18%. So that gives people a very quick view of how much of the revenue from that natural resource is going to the government. There is obviously a great clamoring for increased state ownership. It is an element that I find at times, a little bit perplexing by virtue of the fact that ownership of the mining companies is effectively clamoring to be lost in the queue, because you have to pay your revenues and then you've got your operating costs and all your salaries and your fuel costs and your taxes. And right at the end, you've got your net profit after tax. So if you want to be an owner, you are last in the queue. By contrast, governments have a magic power, which is to go all the way up that chain and tax the revenue via a mineral royalty. And so that, I think, is essentially where the focus should be, and that was part of our thinking behind the G-Factor for Natural Resources. So all of that said, in Zambia, we have enormous respect for the government, the team in State House and also the current president. There's an election there in August of this year. Importantly, the government owns by the IDC of Zambia, the Industrial Development Corporation of Zambia, 25% of Kagem Mining Limited. And that, in fact, pre-existed our arrival back in 2008. And so that model is very well regarded, and it's a long-standing partnership, which I think has also been very successful over the years, and our license there runs until 2040. Certainly comfortable about Zambia. In respect of Mozambique, there has been a recent new mining law, which is still awaiting some peripheral legislation. And that new mining law does include a number of very interesting elements, inter alia, it sets up the right for only the government to be involved and running anything that involves strategic minerals. The definition of strategic minerals at the moment is relatively wide. Importantly, it does presently exclude gemstones, and we expect that to continue to be the case. And the list of strategic minerals can, of course, be changed by the government as they see fit. That legislation does also call for 15% state ownership of any new mining project. Obviously, we don't have that ownership at the moment. But very importantly, in the letter of the law as it currently stands, there is a very important grandfathering clause, in other words, we do not expect that the government will be taking a 15% stake in MRM and that this company, Gemfields, will continue to own 75%. Our license in Zambia runs to 2040, the license in Mozambique runs to 2036. I should say that we have, in many respects, particularly around the recent security incidents and also in terms of our ability to speak with stakeholders in Maputo, enjoyed encouraging engagement from the government. At times, obviously, it's quite a long way from Maputo to Montepuez Ruby Mining in Cabo Delgado. But for the time being, we expect the grandfathering to kick in and for our operations to continue as expected to 2036.

Thank you, Sean. The last question is also from Mr. Graham Stratton. The question is at what point do you anticipate the resumption of dividends to shareholders?

Thanks. Maybe I'll take that one, and thanks for that question. I think it's fair to say that the Board, of course, recognizes that shareholders participate in the company for many reasons, one of which is to receive a dividend, hopefully. And you will have seen in the past, there has been a time when we have paid a dividend out. The company is currently in an awkward position. It's at the end of a very capital-intensive heavy phase, which was the finalization of the construction of PP2 in Mozambique and we've communicated with the market a fair amount about that in the last 6 months. Suffice it to say the plant is built, but is ramping up to full production. Then secondly, of course, and Sean touched on some of this, we are in a very difficult environment, particularly in Mozambique for all kinds of the reasons that's Sean spoke about. Obviously, our first obligation as the Board is to protect the balance sheet and the future of the company. It's difficult to say with any certainty now as to when we will resume paying dividends, but I assure shareholders, it is something that is always on the Board's mind. Thank you. No further questions?

No further questions via the webcast, Mr. Chairman.

Thank you. As there are no further questions, I will now move on to the main business of the meeting. Please hold up your hand if you need a poll card. Since no poll cards were distributed, the registrar will calculate the results of the poll from the proxy votes exercised by those shareholders who have lodged their proxy forms before the start of this meeting. As Chair of the meeting, I intend to vote all undirected proxies available to me in favor of the resolutions. I'll now run through the resolutions and the results. Resolution 1, is to adopt Gemfields annual report for the year ended 31 December 2025. Resolution 2, is to reelect Patrick Sacco, who is retiring by rotation as a Director of the company. Resolution 3, is to reelect Mary Reilly, who is retiring by rotation as a Director of the company. Resolution 4, is to reappoint Mary Reilly to the company's Audit and Risk Committee. Resolution 5, is to reappoint Kwape Mmela to the company's Audit and Risk Committee. Resolution 6, is to reappoint Simon Scott to the company's Audit and Risk Committee. Resolution 7, is to reappoint Ernst & Young LLP as the company's Auditor until the conclusion of the 2027 Annual General Meeting and to authorize the directors to fix their remuneration. Resolution 8, is a general authority to issue 172,423,052 shares for cash and a waiver of preemptive rights. Resolution 9, is to approve amendments to the company's long-term incentive plan. A nonbinding advisory vote is also proposed to endorse Gemfields remuneration policy. A second nonbinding advisory vote is proposed to endorse the Gemfields remuneration implementation report. Resolutions 1 to 7 are proposed as ordinary resolutions, and therefore, to be passed, require more than 50% of the votes cast to be in favor. Resolutions 8 and 9 are proposed as special resolutions, and therefore, to be passed, require votes in favor of not less than 75% of the votes cast. The final 2 votes proposed, are proposed as nonbinding advisory votes and are proposed for information purposes only. Moving on to the results of the resolutions. In respect to resolutions 1 to 7, I am informed by the registrar that the required majority of more than 50% have voted in favor of these ordinary resolutions. Accordingly, I declare resolutions 1 to 7 carried as ordinary resolutions. In respect to Resolution 8, I am informed by the registrar that the required majority of not less than 75% have not voted in favor of this special resolution. Accordingly, I declare resolution 8 not carried. In respect to Resolution 9, I am informed by the registrar that the required majority of not less than 75% have voted in favor of this special resolution. Accordingly, I declare Resolution 9 carried as a special resolution. In respect to 2 nonbinding advisory votes, I am informed by the registrar that the required majority of not less than 75% have voted in favor of these votes. Accordingly, I declare that 2 nonbinding advisory votes carried. The final summary of the total votes cast in respect of each of these resolutions and votes will be announced via RNS and SENS and published on our website as soon as practicable after the conclusion of this meeting. Ladies and gentlemen, that concludes the formal business of this meeting, and I declare the meeting closed. Thank you for your participation.