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Gemfields secures US$65mln of growth funding

Published: 07:31 04 Jul 2016 BST

black and white of two workers from the mine
Workers at the Montepuez Ruby Mining in Mozambique (taken by Errol Rainery).

Gemfields PLC (LON:GEM) has agreed US$65mln of new debt facilities, US$45mln of which will be used to fund the advancement of its Montepuez Ruby Mining (MRM) in Mozambique.

The new lines are in addition to the US$30mln revolving facility for the company’s Kagem emerald mine in Zambia.

Chief financial officer Janet Boyce said the company now has the “necessary funding” to grow output at MRM to 20mln carats of rough rubies in the next three years as well as pushing Kagem’s production to 40mln carats.

"We are pleased to have agreed these financing facilities after having considered a number of alternatives as well as other offers from various banks,” she added.

The MRM borrowings have been split into three equal tranches with different lenders.

Gemfields has an unsecured overdraft with Barclays Mozambique charged at the US dollar London inter-bank rate (LIBOR) plus 4%, an overdraft with Banco Comercial E De Investimentos (BCI) at LIBOR plus 3.75% and a finance leasing facility with BCI also at LIBOR plus 3.75%.

Additionally, it has agreed a US$20mln facility with Macquarie Bank at LIBOR plus 4.5%, which replaces a US$25mln loan it negotiated with Australian group last year.

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