Emerald group Gemfields Resources, backed by Frank Timis, hopes its £15 million AIM float will value it at £65 million.

Founded five years ago by executive vice-chairman Rajiv Gupta, whose family has been in the emerald trade in India for 50 years and holds the largest stake in the company, Gemfields is further advanced than many mining float candidates. The company has secured control of 70 per cent of gem-rich Zambia's Ndola Rural Emerald Restricted Area (NRERA), with the help of £8.5 million seed investment cash, a significant portion of it subscribed by controversial resources tycoon Timis, who recently had to quit as boss of Regal Petroleum when a key Greek oil asset proved uncommercial.

Advisers say Timis is a passive investor with no policy voice at Gemfields, whose chief executive officer is former De Beers luminary Jeremy Clarke. Through Clarke and Gupta, the company paid £1.5 million for Kamanga Mine within the NRERA, with equipment worth £2.5 million thrown in free. The mine has been a significant emerald producer in the past and now seen as having potential along a 2.3 km strike length.

At Mbuva-Chobolele in the NRERA, Gemfields sees a present resource of 18 million tonnes of emerald-bearing rock and a ten-year mine life before further exploration. The company says it expects to start open-pit mining in the third quarter of next year, yielding positive cashflow by the end of 2006.

That, says Clarke, should remove the need for a return to investors, unless the company wants to make an acquisition – for which there are no present plans. Gemfields also owns half of a Zambian amethyst mine with annual turnover of £1.1 million and has an extensive licence for pink tourmaline (now being promoted by Tiffany).

As foreshadowed in the latest issue of Growth Company Investor, broker Canaccord is handling the float for Gemfields, which has set itself the target of becoming number one in the world emerald mining business. The issue has not yet been priced.

Clarke and Gupta (who says his clan from Jaipur controls '90 per cent' of the emerald trade) plan to move into cutting and polishing to deal direct with the jewellery manufacturers. With high-quality wholesale cut emeralds fetching up to £15,000 a carat, Gemfields could that way grab much more of a mark-up than for pure rough mining.