Gem Resources to sell South African emerald mine as its shifts focus to gold processing
London-listed natural resources company Gem Resources has agreed to sell its interest in Gem Venus Holdings, which holds the company's interest in the Gravelotte emerald mine, in Limpopo, South Africa, to Global Gem Mines, for $1.7-million in cash and a 5% gross revenue royalty on rough emeralds mined and sold from the mine for up to two years after completion of the deal.
The disposal forms part of Gem Resources' strategic repositioning towards operating, revenue-generating natural resources businesses, with an increasing focus on gold processing, including through its conditional acquisition of the El Yarumo gold processing operation, in Cauca, Colombi.
"The conditional disposal of Gravelotte allows us to crystallise value from the project while retaining meaningful exposure to its future production potential through the 5% gross revenue royalty. With potential aggregate consideration of up to $2.4-million, we believe this represents an attractive outcome for Gem Resources and its shareholders.
"Together with the El Yarumo acquisition, the disposal demonstrates the direction in which we are taking Gem Resources: recycling capital from existing assets, reducing funding commitments and directing our resources towards opportunities offering earlier revenue, cash flow and scalable growth in gold processing," comments Gem Resources chairperson Louis Ching.
Gem Resources also holds a 65% interest in Prasinus Exploration, the owner of the Curlew emerald mine, in Western Australia; and an exploration licence in north-east Zambia prospective for high-grade graphite, coltan, lithium and rare earth elements.
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