Gemfields To Search for Gold in Mozambique

Mining and Exploration
27/06/2019 16:36

The world’s largest coloured gemstone producer, Gemfields, yesterday announced it has established a joint venture with Mwiriti to explore for gold and assorted minerals in Mozambique. Mwiriti is Gemfields’ existing partner in Montepuez Ruby Mining (MRM) and holds 12 greenfield licences located as little as 20 kilometres from MRM’s existing operations, including an extension of the known Montepuez ruby belt with both secondary gold incidence and primary corundum mineralisation having been observed.

The new joint venture company will be incorporated in Mozambique with Gemfields owning 75% and Mwiriti 25%. Under the terms of the joint venture agreement, Gemfields will contribute its proven exploration and project development experience together with appropriate financing with a view to building on the successes achieved in Mozambican rubies. Mwiriti will contribute to the venture six applications for mining concessions and six exploration licences for gold and assorted minerals. Mwiriti will also receive an advance payment of $3 million against Mwiriti’s share of future earnings arising from the operations of the new joint venture.

At the same time, Gemfields announced it had completed the sale its 50% stake in Kariba Minerals Ltd (“Kariba”), the Zambian amethyst mine, to ZCCM Investments Holdings plc for a total of $2.5 million. The deal was agreed to on 10 December 2018 following Gemfields' decision to dispose of its stake in Kariba in order to focus on its on its core assets: emeralds rubies and sapphires, though the miner has now added gold to the equation. "Gemfields remains a company focussed on emeralds, rubies and sapphires mined in Africa," said Sean Gilbertson, Gemfields’ CEO. "However, given their proximity, the relative ease of mobilisation, our longstanding relationship with Mwiriti and the mineralisation observed onsite to date, we feel it is important to fully investigate the possible upside potential of these licences for our shareholders.” 

Last week, Gemfields completed an auction of rough rubies in Singapore, generating total revenues of $50.0 million at an average realised price of $51.99 per carat. The proceeds of this auction will be fully repatriated to MRM in Mozambique. The auction offered high, medium and commercial grade rough rubies, exclusively in untreated form, with 48 companies placing bids. Gemfields sold 962,211 carats out of the 978,197 carats offered (98%). The twelve Gemfields auctions of MRM rubies held since June 2014 have generated USD 512.6 million in aggregate revenues.

Photo: Montepuez Ruby Mine, courtesy of Gemfields