Gemstone miner Gemfields has signed an agreement to sell its entire interest in wholly-owned luxury brand Fabergé to SMG Capital for $50-million.

Of that sum, $45-million is payable to Gemfields by SMG on completion of the sale, expected on August 28, while the remaining $5-million is payable by way of quarterly royalty payments at a rate of 8% of Fabergé’s revenue.

The sale is not expected to be subject to regulatory or any other approval processes.

Fabergé sells jewellery and objets d’art through its website, boutiques and via international wholesale partners.

SMG Capital is a US-based investment company entirely owned, both legally and beneficially, by Sergei Mosunov, a tech entrepreneur and venture capitalist.

The sale concludes Gemfields’ strategic review in respect of Fabergé, first announced in December last year, then paused to facilitate the company’s rights issue which completed on June 13.

With the sale of Fabergé and the discontinuance of other noncore projects, Gemfields is now a more streamlined and focused investment proposition with a strengthened balance sheet, the company says.

The sale proceeds will provide additional working capital while the new processing plant at Montepuez Ruby Mining, in Mozambique, is operationalised, and mining at Kagem, in Zambia, is progressively expanded, having been suspended during the first half of this year.

“Having initiated our strategic review of Fabergé in response to the considerable challenges Gemfields started facing in quarter four 2024, today’s sale marks the end of an era for us. Fabergé has played a key role in raising the profile of the coloured gemstones mined by Gemfields and we will certainly miss its marketing leverage and star power,” Gemfields group CEO Sean Gilbertson comments.

“I extend our admiration and sincere thanks to the Fabergé team for their fortitude and the progress they have delivered over the years. Brands as iconic and beautiful as Fabergé do not change hands very often and we wish the team and Mr Mosunov every success as they perpetuate the unrivalled legacy of Fabergé,” he adds.

“It is a great honour for me to become the custodian of such an outstanding and globally recognised brand. Fabergé’s unique heritage, with ties to Russia, England, France and the US, opens significant opportunities for further strengthening its position in the global luxury market and expanding its international presence,” Mosunov says.

“Fabergé will continue to focus on jewellery, accessories and timepieces and we look forward immensely to providing exceptional service to Fabergé’s existing retail and wholesale customers, and to warmly welcoming new brand afficionados. We thank the Gemfields team for their contribution to the development of Fabergé and look forward to working closely with the brand’s talented team,” he adds.

As at December 31, 2024, Fabergé’s net assets are valued at $50.35-million.

The loss from operations in 2024 attributable to the net assets that are subject to the transaction was $5.7-million.

Gemfields was advised on the transaction by DWF Law and Dyens & Co, and SMG was advised by DLA Piper UK.