Precious stones miner Gemfields (LON:GEM) announced Tuesday that an independent report has confirmed its majority-owned Montepuez ruby mine in Mozambique has enough reserves to last over 20 years.
According to the Competent Persons Report (CPR), which gives an official estimate of what is considered the largest deposit of rubies in the world, which includes a maiden JORC mineral resource estimate and ore reserve, the mines indicated and inferred mineral resource stand at 467 million carats of ruby and corundum at a grade of 62.3 carats per tonne of ore. It also estimates probable ore reserves of 432 million carats at a diluted grade of 15.7 carats per tonne over 21 years.
Until recently, Gemfields was synonymous with emeralds. But the world’s biggest producer of the green gemstone is trying now to highlight its newly-acquired ruby mines in Mozambique
Until recently, Gemfields was synonymous with emeralds. But the world’s biggest producer of the green gemstone is trying now to highlight its newly-acquired ruby mines in Mozambique, from which a cache of exceptional-quality rubies have made their way onto jewels by the likes of Fabergé, Georg Jensen and Miiori – modelled by brand ambassador actress Mila Kunis.
The company said it expects trading in gemstones to account for a “sizeable chunk” of its revenue over the next five to 10 years. The CPR split the Montepuez mine’s probable reserves into primary ore reserves of 253-million carats at a 114.9ct/t and secondary reserves of 179-million carats at a lower grade of 7.07ct/t.
Gemfields plans to increase Montepuez’s capacity to 5.6 million tonnes from 3.3 million tonnes and expects about $65 million in capital spending over the next two years and $305 million over its whole life. The Mozambique asset is forecast to generate a value of nearly $1billion and over 42.7 billion in cash.
Analysts, however, cautioned against the lack of clarity on the size of the ruby market and pricing of the gemstones, which are sold via auctions.
Montepuez is located at a geologically critical junction between the north-south trending Mozambique Belt and the east-west trending Zambezi Belt.