Professional Jeweler Archive: From Mine Site to Web Site

February 2000

Gemstones & Pearls/News


From Mine Site to Web Site

Consumers can now buy Montana sapphires on-line


American Gem Corp. has taken its Montana sapphire production from mine site to Web site in an effort to develop sales for its “Jewel of the Rockies.” At www.AmericanSapphire.com, consumers can buy Gem Mountain blue and fancy color sapphires via a cyberspace store and daily auctions.

The Web site, an answer to overproduction, has altered the face of AGC, which was recently consolidated to become Digital Gem, an e-commerce company that will soon spin off another company geared solely to the refining and marketing of Gem Mountain sapphire.

Weaving a Web

AmericanSapphire.com features primarily loose heat-treated sapphire in a range of grades and some finished jewelry. The majority of material currently on-line (more than 2,000 items) ranges mostly from 2mm-5mm, though some are over 1 carat, says Ronda Tallerico, marketing director. Prices range from $5 for small gems of commercial quality to $10,000 for larger fine-quality gems.

“While the previous focus of the company was on sapphire production and processing, our current objective is developing a market for these goods,” says Gene Lewis, vice president of marketing. “The Internet is a great channel to the marketplace, though we are committed to selling through all venues, including traditional means.”

In fact, AmericanSapphire.com lists 1,500 manufacturers and retailers working with Montana sapphire from AGC. “Because our primary focus is loose sapphires, we offer a list of our customers as an outlet for consumers wishing to set stones bought on-line,” says Tallerico.

However, this list may not help all consumers find the Montana sapphires. A number of retailers listed on-line were surprised to learn about the listing, some are not even customers of AGC and others say they don’t sell American sapphire as such. “I try not to sell branded items,” says Paul Cohen of Continental Jewelers in Wilmington, DE. “They’re a commodity with little room for margin, especially when consumers can price-shop on the Internet and buy direct from the source.”

Tallerico says the on-line list, which represents AGC’s customer base for the past four years, is meant only as a service for consumers.

Birth of Digital Gem

AGC has had a rocky go of it since its founding in 1991. By 1986, AGC reportedly produced 8 million carats of sapphire rough, much of it sold to satisfy distribution agreements already in place, though 300,000 carats of faceted material remained.

Mismanagement and environmental liabilities were blamed for debilitating financial difficulties that halted production and led to a reorganization in 1997 by Yorkton Securities, Toronto, Canada. Vic Alboini, formerly of Yorkton, became president of AGC and has generated a positive cash flow by selling some company assets, including property and buildings.

Stuck with an abundance of goods and no developed market, AGC turned to the Internet as a direct link to consumers, says Bill Cameron, vice president of communications. To further the evolution of its Internet strategy, AGC in June acquired Northern Securities, a full-service investment dealer in Toronto. In October, as a result of this move, AGC became Digital Gem. This new e-commerce company will focus on securities, mergers and acquisitions, public offerings and commercial mortgages, says Cameron.

In the first half of this year, Digital Gem plans to spin off its sapphire mining, processing and marketing operation into a separate company with a new team of experts and hopes to resume production in June.

To foster consumer awareness, the company promotes its Web site with on-line banner ads and recently held two consumer contests. It also will market to retailers at the Tucson gem fairs this month.

– by Deborah Yonick

Sapphires from Gem Mountain in Montana.


Copyright © 2001 by Bond Communications