Company to have 75 percent stake in site of 34,000 hectares.
Gemfields plc has announced that it has entered into a conditional agreement to acquire a controlling interest in a ruby deposit based in the Montepuez district of the Cabo Delgado province in Mozambique.
The Project comprises five mining titles (made up of both mining and exploration rights) currently owned by Mwiriti Limitada and covers approximately 34,000 hectares. Thus far, the mining operations have taken place on a relatively small and informal scale and the Limitada now wishes to scale up the operation.
Under the terms of the agreement, Gemfields will hold 75% of a new company with the Limitada holding 25%. Subject to government approval, the mining titles will be restructured and issued in the name of the new company.
The total consideration payable to Limitada under the agreement made is USD 2.5 million (£1.5m) and will be paid in stages; the bulk of the consideration to be paid on completion, which is expected to take a few months.
Ian Harebottle, CEO of Gemfields, said: "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."