This content was first published on IGR – Italian Gemological Review no. 18 in 2024. The information provided here is therefore current as of the original publication date.
Featuring 9 Guinness World Records holders in this 43 gemstone collection appraised at a whopping $3.2 Billion, Forbes magazine says of the Ophir Collection «The Mischief Around It Is Priceless». It was recently announced that healthcare services provider Novo Integrated Sciences, Inc. (NASDAQ: NVOS) purchased the Ophir Collection for a mere $60 Million. Tied up in a court case for several years, one would logically ask why a healthcare provider would be acquiring it, and for less than one fifth of 1% of its “appraised” value?
Robert Mattacchione, Novo’s CEO and Chairman of the Board, made the following rambling, nonsensical word salad statement: «The magnitude of the world-famous Ophir Collection is expected to optimize the company’s monetization opportunity resulting in a significant cash surplus position while providing the company with both debt retirement and growth initiative solutions. Securing the financing required for the execution of this transaction has been a significant undertaking and we look forward to calling the collection ours».
So, let me get this straight. Novo has arranged financing to acquire the Ophir Collection which will result in a cash surplus and debt retirement. So, exactly how will borrowing $60 Million result in a cash surplus and debt retirement?
In the world of gemstones, big, or even biggest, does not necessarily equal valuable! The centerpiece of the collection, holding the Guinness World Record at 31,308 carats as the largest cut sapphire in the world, The Ophir Sapphire is appraised at a whopping $284 Million. However, according to the GIA Report, it is opaque and dyed. OPAQUE, AND DYED! Any gemologist or gem dealer worth their salt will tell you that opaque, dyed sapphires have virtually no value in the gem world, and are readily available on eBay for pennies per carat.
This is not the first time a grossly overvalued “gemstone” has been used to make a company’s balance sheet look good. A 2 kg specimen once believed to be the world’s largest ruby was valued at £11 Million, yet it sold at a bankruptcy auction administered by Ernst & Young for a mere £8,010. Underpinning the balance sheet of the UK firm Wrekin Construction who listed it as an £11million asset, according to the BBC, creditors lost more than £45m.
The appraiser of the Ophir Collection, Lurisha M. Finger GG, a Graduate Gemologist of the GIA, Gemological Institute of America, claims to be compliant with USPAP — Uniform Standards of Professional Appraisal Practice guidelines. However, in direct violation of these standards, Lurisha Finger appraised the Ophir Mystique, a 27.66 carat brown and yellow opaque gemstone at $12 Million and refers to it as an “unidentified specimen”. That’s right, the appraiser of the Ophir Collection put a $12 Million value on a “gemstone”, yet she doesn’t even know what it is. Forbes was being kind when they said there was “mischief” around the collection!
Three American organizations with strict codes of ethics offer memberships to gemologist appraisers: the AGA — Accredited Gemologists Association, the NAJA — National Association of Jewelry Appraisers, and the ASA — American Society of Appraisers. Lurisha M. Finger, GG, is not a member of any of these highly respected organizations.
Prolific gemstone and jewelry trade author, and AGA Board of Governors gemologist Antoinette Bonanno Matlins, FGA, whose father Antonio C. Bonanno, FGA, founded the organization, had this to say about Lurisha M. Finger’s Ophir Collection appraisals: «In 77 AD, Pliny wrote in his History of the World – “To tell the truth, there is no fraud or deceit in the world that yields greater gain and profit than that of counterfeiting gems”. This 2000+ year old quote makes it clear; exploiting the unknowledgeable about the value of gems ranks as one of the oldest forms of fraud».
«Size is only relevant if a gemstone is of “fine quality” — meaning it will have a notable combination of durability, rarity, beauty and desirability that collectors would enjoy and cherish. The vast majority of the Ophir Collection lack beauty and desirability making them near worthless rocks, not something any honest mineralogist or gemologist would ever describe as “gems”».
Bill Larson, MSc, of Pala International in Fallbrook, California, one of the world’s most knowledgeable fine gemstone and mineral specimen experts, gave his opinion on the collection’s $82 Million tourmaline crystal, $220 Million fire opal specimen, and $148 Million Guinness World Records holding largest cut tanzanite stating: «The key parameter contained on each of the GIA reports on these items is that they are opaque to translucent. Gemstones of these species need to be transparent to have value. Therefore, these three specimens are only large, poor quality examples and would never even qualify to be sold at a reputable auction house».
American gemologist and rare gemstone specialist Mark Smith, AG, of Thai-Lanka Trading in Bangkok, stated: «Over the past 40 years we have dealt in all these mineral species and I can safely say there is not one piece in the Ophir Collection that I would want in our inventory for any price. I would be truly embarrassed to claim any of these pieces. And the appraisals are either pure fantasy, or criminal. The collection includes a Guinness World Record holding 4.32ct grandidierite appraised at $14.5 million, which we could easily replace for under $100».
The issue of overpricing and misrepresentation of stones is not new. I have already reported in the pages of issue 15 of “IGR — Italian Gemological Review” about another case that stunned the jewelry and gemstones industry.
April, 2022, news from Dubai of a “record-breaking” 2.8 kg rough ruby valued at $120 Million stunned the gem and jewelry world. Grossly misrepresented by SJ Gold & Diamonds who named the near worthless specimen the “Burj Alhamal”, it was soon exposed as a low-grade ruby-in-zoisite from the Longido mine in Tanzania, readily available by the ton for a mere $300/ kg making the specimen’s actual value under $1,000.
Thomas Hainschwang, Ph.D., Director of GGTL Laboratories in Geneva and Liechtenstein called the Burj Alhamal ruby «one of the biggest attempted scams in the history of the gem trade» and that «the security guard standing by this rock costs more per day than what the stone is».
Renowned British author and gemologist Kenneth Scarratt, FGA, authority on the British Crown Jewels, commenting the issue of overpricing said: «there will always be those dishonest individuals who want to “get rich quick” and those gullible enough to fall for the pitch. However, those of us who have enough knowledge of the gemstone industry should maybe stand-up and challenge these dubious practices as and when they occur by warning those that seem to be the target audience».
References and further reading
01. Novo Integrated Sciences’ Purchase and Sale Agreement to Acquire Ophir Collection
Receives Court Approval. (Dec. 04, 2023). https://www.businesswire.com/news/home/20231204261695/en/Novo-Integrated-Sciences’-Purchase-and-Sale-Agreement-to-AcquireOphir-Collection-Receives-Court-Approval – Last accessed 31-12-2023
02. 6.2 Kg Natural Sapphire Large Museum Size Top Grade Madagascar Gemstone W Stand. https://www.ebay.com/itm/353832655706? – Last accessed 31-12-2023
03. Kochkodin, B (2023). A Trove Of Precious Gemstones Was Appraised At $3.2 Billion. The Mischief Around It Is Priceless. https://www.forbes.com/sites/brandonkochkodin/2023/11/19/a-trove-of-precious-gemstones-was-appraised-at-32-billion-the-mischief-around-it-ispriceless/?sh=2747731c1186 – Last accessed 31-12-2023
04. Tanzanian ruby valued at £11m sells for just £8,000 after being proved to be a lump of rock. (2010). https://www.dailymail.co.uk/news/article-1251782/Tanzanian-ruby-valued-11m-sellsjust-8-000-proved-lump-rock.html – Last accessed 31-12-2023
05. Traynor, L. (2013). ‘Ruby’ called Gem of Tanzania valued at £11 MILLION was 2kg lump of rock worth just £8,000. https://www.mirror.co.uk/news/uk-news/david-unwins-ruby-gemtanzania-2899775. – Last accessed 31-12-2023
06. The Origin, Weight And Value Of The Burj Alhamal Ruby Misrepresented In Potential Scam. (2022). https://menafn.com/1104129682/The-Origin-Weight-And-Value-Of-The-Burj-AlhamalRuby-Misrepresented-In-Potential-Scam – Last accessed 31-12-2023
07. Bergman, J. (2023). Overpricing Misreported Gemstones Is A Threat. https://www.rivistaitalianadigemmologia.com/en/2023/05/19/overpricing-misreported-gemstones-is-a-threat-gemologists-and-dealers-have-to-come-to-terms-with-this-issue/
08. Author & Gemologist Antoinette Matlins, FGA. http://www.antoinettematlins.com/ – Last accessed 31-12-2023
09. Fine Gemstone & Mineral Specialist Bill Larson, Pala International. http://www.palagems.com/ – Last accessed 31-12-2023
10. Rare Gemstone Specialist Mark Smith, Thai Lanka Trading. https://www.thailanka.com/who-we-are – Last accessed 31-12-2023
11. Gemologist Thomas Hainschwang, Ph.D., Director of GGTL Laboratories. https://ggtllab.org/en/about-ggtl-laboratories – Last accessed 31-12-2023
12. AGA – Accredited Gemologists Association. https://accreditedgemologists.org/ – Last
accessed 31-12-2023
13. NAJA – National Association of Jewelry Appraisers. https://najaappraisers.com/ – Last
accessed 31-12-2023
14. ASA – American Society of Appraisers. https://www.appraisers.org/ – Last accessed
31-12-2023
Article by Jeffery Bergman (ASG, SGC), published on IGR – Italian Gemological Review #18 – Spring 2024.
