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Gemfields plc picks up stake in ruby deposit in Mozambique
The company will own 75% stake in the new venture
By: Diamond World News Service
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Jun 8 2011 11:09PM
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Reference: 6047  

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Gemfields plc has signed a conditional agreement with Mwiriti Limitada, and is taking over a controlling interest in a ruby deposit based in the Montepuez district of the Cabo Delgado province in Mozambique. This comprises of five mining titles (made up of both mining and exploration rights) currently owned by Mwiriti Limitada, and covers approximately 34,000 hectares (the “Mining Titles”). Mining has to date taken place on a relatively small and informal scale and the Vendor now wishes to scale up the operation.

As per the agreement, Gemfields will hold 75 percent of a new company, (the “New Company”), and the Vendor holding 25 percent. Subject to government approval, the Mining Titles will be restructured and issued in the name of the New Company.

Ian Harebottle, CEO of Gemfields, commented: “We are particularly pleased to announce this first and consequential step in our diversification into other premium coloured gemstones. This is arguably the most important ruby deposit in Mozambique today and its production to date has been likened in quality to both that produced in Burma and also at Winza in Tanzania. The present owners of the project sought a professional, experienced and transparent partner to assist in developing a potentially world-class ruby project. As a London-listed company with a well-established track record in the emerald sector, Gemfields was a natural choice. We look forward tremendously to working with our new partners.”

Gemfileds will pay USD 2.5 million to Mwiriti Limitada in stages with a first tranche payable 5 days from the signature of the Agreement; a second tranche payable within 5 days of the date on which conforming applications for the transfer of the Mining Titles to the New Company have been submitted to the Ministry of Mineral Resources; and the bulk of the consideration to be paid on completion, which is expected to take a few months.

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