Fura Gems Acquires 9 Ruby Mining Licenses

Toronto—Fura Gems has entered into a merger agreement that will allow it to expand its ruby holdings.

Fura will acquire nine additional ruby licenses in Montepuez, Mozambique, from Mustang Resources and Regius Resources Group Ltd. for AU$15 million (approximately $11 million), payable in AU$3 million (about $2.2 million) cash and 12.7 million Fura shares.

The assets total approximately 711 square km (175,692 acres) and bring the total number of exploration licenses owned by Fura Gems in Montepuez to 13.

Fura also will acquire related infrastructure, including two wash plants, security and mine camps.

Once the deal is complete—it’s expected to close by Nov. 30—Fura will control 1,104 square kilometers (about 272,804 acres) in Mozambique, giving it what it said is the largest ruby mining concession in the country and some of the highest quality ruby licenses available in Mozambique.

The gemstone mining and marketing company said it plans to invest up to CA$25 million ($18.9 million) over three years in a program for drilling, bulk sampling and production mining in the new properties, as well as the reconfiguration of existing wash plants to increase efficiencies.

It expects to start bulk sampling activities in the new licenses by the end of 2018 and start auction sales for rubies from all of its mining areas in the third quarter of 2019.

Fura said it expects to make at least 50 new hires this year to accommodate the expansion. It currently has 54 employees involved in the Mozambique operation.

CEO Dev Shetty said the company also is exploring pursuing a dual listing of its shares on the London Stock Exchange by the end of 2018.

Mustang, meanwhile, will focus on its Caula graphite-vanadium project.

Earlier this year, the company announced it would close its sales facilities in Mauritius, which were established to hold large-scale ruby auctions. This came amid a strategic review of its Mozambique operations after it reported “disappointing results” from its first auction.

Mustang also said at one point that it would be opening a sales and marketing office in Chanthaburi, Thailand. The company did not respond to an email inquiry on the status of the office by press time, though it is currently not listed under office locations on the Mustang website.