Fura to acquire additional ruby licences in Mozambique

Key highlights of the acquisition include:

• Acqusition of participating interests in Mozambican mining companies which hold the following ruby mining licences and concessions in Mozambique for a total cash consideration of US$3.8 million:
  • 100% participating interests in SRL Mining, Limitada, a Mozambican mining company holding each of ruby mining concession 8955C and ruby exploration licence 7414L.
  • 20% free carried and non-dilutive participating interest in Ibra Moz SA, a Mozambican mining company holding ruby mining concession 8921C.
• Rights to explore without competition from GemRock:
  • US$3.5 million is payable to acquire rights under the non-competition agreement, pursuant to which GemRock has agreed not to compete with Fura in certain jurisdictions in respect of its ruby mining activities.
  • US$500 000 is payable as a reimbursement of GemRock’s expenses in connection with the transactions contemplated in the Agreements.
• The acquisition of the participating interests in the Mozambican mining companies holding the licences is expected to add a further 95.15 km² to Fura’s existing land package in the main ruby belt of the Montepuez district of Mozambique.
• Fura expects to commence bulk sampling at the licence areas by March 2020.

Dev Shetty, Fura’s President and CEO, commented: “The company is pleased to further consolidate its position in the main ruby belt of the Montepuez district of Mozambique. The completion of the merger of the ruby assets agreement with New Energy Minerals Ltd (announced in November 2018) combined with Fura’s acquisition of ruby mining licence 5572L (announced on 17 October 2019) and now Fura’s anticipated acquisition of the interests in SRL Mining, Limitada and Ibra Moz, SA, and thereby the licences, is expected to give Fura the ability to explore for secondary alluvial and a primary deposit of rubies in the region.

In the last 3 years, Fura’s portfolio of assets has grown significantly. The company now has three important silos of colour-gemstone properties in its portfolio: emeralds from Colombia, the world’s largest emerald supplier in value; rubies from Mozambique, the world’s largest ruby supplier by volume, and sapphires from the sapphire project in Australia. With these assets and an experienced team, the company believes it is in a strong position to be able to create a leading colour gemstone company."

Share purchase agreement

Fura and a wholly owned subsidiary of the company have entered into a share purchase agreement dated 4 February 2020 with GemRock. Pursuant to the share purchase agreement, and subject to the terms and conditions set out therein, Fura will acquire 100% of the issued and outstanding shares of Vedas International DMCC , which holds a 100% interest in SLR Mining, Limitada and a 20% interest in Ibra Moz SA. In addition, in connection with the Acquisition, GemRock agreed to the terms of a non-competition agreement in respect of its ruby mining activities in Russia, Brazil and the Cabo Delgado province of Mozambique.

The aggregate purchase prices for the licences and rights under the non-competition agreement are US$3.8 million and US$3.5 million respectively, plus US$500 000 for the reimbursement of expenses incurred by GemRock in connection with the acquisition, to be paid as follows:

• US$4.5 million in cash to be paid to GemRock immediately following the executions of the agreements.
• US$3.3 million in cash to be paid to GemRock upon the Fura obtaining formal approval from the Ministry of Mineral Resources and Energy of Mozambique (MIREME) for the acquisition of the target companies.

The acquisition is an arm’s length transaction for the purposes of the policies of the TSX Venture Exchange (TSXV), and Fura understands that the acquisition qualifies as an ‘exempt transaction’ under TSXV Policy 5.3. Fura is not paying any finder’s fees in connection with the acquisition. Prior to entering into the agreements, GemRock delivered to Fura several documents, including, inter alia, a binding tax opinion, confirmation that all amounts set out in the binding tax opinion have been paid, and applicable legal opinions. The only condition remaining for completion of the Acquisition is obtaining formal approval from MIREME.

Fura is currently in the process of completing the purchase and sale of interests in three additional ruby prospecting licences/concessions in Mozambique as follows: (i) 75% of the issued shares of Montepuez Minerals Pty Ltd, which owns a 70% interest in mining licence 5030L and an 80% interest in mining concession 8921C; and (ii) a right to earn a 65% interest in mining concession 8955C under a joint venture agreement.

Read the article online at: https://www.globalminingreview.com/finance-business/11022020/fura-to-acquire-additional-ruby-licences-in-mozambique/