Mozambique Mining: Fura to merge Montepuez ruby assets with Mustang, Regius

FURA -- Dev Shetty, Fura_s President and CEO
Dev Shetty, Fura’s President and CEO

Fura Gems Inc, a new gemstone mining and marketing company with emerald and ruby assets in Colombia and Mozambique, respectively, is pleased to announce it has entered into a merger of ruby assets agreement, pursuant to which the Company will acquire controlling ownership in the issued and outstanding shares of entities and interests in joint ventures that collectively own interests in nine additional ruby licenses (collectively, the “Assets”) in the Montepuez District of Cabo Delgado province in Mozambique (the “Acquisition”).

Key Highlights: Dev Shetty, Fura’s President and CEO, commented:

“I am pleased to announce the merger of these ruby assets with those of our existing licenses in Mozambique transforming Fura into the largest ruby group by licence area in the country. Our team has in-depth experience in the Mozambique ruby sector having previously worked in Mozambique since 2011 where they were instrumental in discovering and developing what is largely considered the world’s largest ruby deposit.

Based on our extensive work in-country, we believe these combined licenses to be some of the highest quality ruby licenses available in Mozambique.

The initial ground work has already been done by Mustang and Regius, which includes significant exploration and the construction of two wash-plants. Following completion of the Acquisition, we plan to commence a significant bulk sampling project within these licenses in the next few months with the mid-term objective of creating another world class, cash generative ruby mine to complement our iconic Coscuez emerald mine in Colombia.”

Merger of Assets Agreement 

Fura and a wholly owned subsidiary of the Company have entered into a merger of ruby assets agreement (the “Merger of Assets Agreement”) dated July 16, 2018 with Mustang, a publicly traded company on the Australian stock exchange, Montepuez Minerals Pty Ltd., a subsidiary of Mustang, and Regius. Pursuant to this agreement, Fura will acquire the controlling ownership in various entities owned by both Mustang and Regius, that together own nine mineral exploration licenses (license numbers 9307C, 7083L, 6106, 8188L, 6064L, 7251L, 5030L, 8955C and 8921C) in Mozambique.  A table with further details of the licences is provided below.

The aggregate purchase price pursuant to the Merger of Assets Agreement is A$15,000,000 and shall be payable as outlined below.

  • Cash consideration of A$3 million payable at closing of the Acquisition (the “Closing”);
  • Common shares in the capital of the Company (the “Fura Shares”) with a value equal to A$4 million with such Fura Shares to be issued at C$0.50 per share, to be issued at Closing;
  • Fura Shares with a value equal to A$4 million, with such Fura Shares to be issued at C$1.40 per share to be issued on the day that is twelve months following Closing; and
  • Fura Shares with a value equal to A$4 million, with such Fura Shares to be issued at $1.80 per share, to be issued on the day that is twenty months following Closing.

Upon closing of the Acquisition, Fura will hold effective interests in the Assets of between 65% and 80% with the remaining interests, non-dilutive and free carried, being held by the respective local partners. The Assets cover approximately 711sq. km (71,100 hectares).

Fura intends to invest up to C$25 million (subject to operational success) over a period of three years, in a programme of drilling, bulk sampling and production mining on the properties comprising the Assets. Other initiatives that Fura intends to launch include: the reconfiguration of the existing wash plant to increase efficiencies; extension and/or consolidation, where appropriate, of certain of the ruby licences; and the implementation of grading and marketing systems via Fura’s existing marketing platform.

All of the Fura Shares issued by the Company pursuant to the Acquisition will be subject to lock-up agreements pursuant to which the vendors shall be restricted from selling or transferring such securities during the twelve months following the date of the issuance of the Fura Shares to the vendors.

The Acquisition is an arm’s length transaction for the purposes of the policies of the TSX Venture Exchange (“TSXV”) and is subject to the approval of the TSXV. Fura is not paying any finder’s fees in connection with the Acquisition. The closing of the Acquisition is subject to the satisfaction of customary conditions precedent, including, inter alia, receipt of ministry and joint venture authorisations, approval of the TSXV and the provision of applicable legal opinions concerning the title to the Assets.

The maps showing Fura’s existing portfolio and post-merger of ruby licenses are given below

Map 1
FURA’s exisiting ruby licenses
Map 2
FURA’s ruby licenses post merger with Mustang and Regius

About Fura Gems Inc.

Fura Gems Inc. is a gemstone mining and marketing company which is engaged in the mining, exploration and acquisition of gemstone licences. Fura’s headquarters are located in Toronto, Canada and its administrative headquarters are located in the Almas Tower, Dubai. Fura is listed on the TSX Venture Exchange under the ticker symbol “FURA”.

Fura is engaged in the exploration of resource properties in Colombia and owns a 76% interest the Coscuez emerald mine in Boyacá, Colombia Fura is involved in the exploration and mining of rubies in Mozambique through its 80% effective interest in the four ruby licenses (4392L, 3868L, 3869L and 6811L). Fura has entered into merger agreement with Mustang and Regius to acquire nine ruby licenses. Source:Globe News Wire / Press Release

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.