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Gemfields (LON:GEM) has unveiled plans to expand its international footprint by acquiring two separate emerald projects in Colombia worth a total of up to US$22.5mln.
The firm, which currently owns 75% of the Kagem emerald operation in Zambia and the Montepuez ruby deposit in Mozambique, said it is looking to buy projects with assets mainly in Boyacá state.
It has already carried out preliminary due diligence on the historic Coscuez emerald mine. It has agreed to pay up to US$15mln in cash and shares over four years for 70% of the local firm that owns the licences.
The second deal will see it snap up 75% and 70% interests in two Colombian companies holding mining applications and concessions covering around 20,000 hectares. Payments will again be staged and could total US$7.5mln.
Chief executive Ian Harebottle said the transactions, which will require further due diligence, are line with Gemfields’ strategy of growing in a “considered yet cautious fashion”.
“The acquisitions offer exciting green and brownfield growth opportunities over the medium to longer term,” he added.
The stock, up 32% in the year to date, marked time at 60.5p in early afternoon trade, valuing the business at £328mln.
Remarkable Transfomation
The transformation of Gemflields under Harebottle over the last few years has been nothing short of remarkable.
It started with getting Kagem producing reliably and has seen the company take control of auction process.
Rubies followed, while the last auction saw it selling amethysts alongside emeralds.
The company, which also owns the iconic Fabergé brand, prides itself on being an ethical producer and seller of coloured stones.
The finished products, meanwhile, are showcased by Gemfields brand ambassador Mila Kunis, the Hollywood star.
The progress is reflected in a share price that has risen almost 1,600% in the last five years.
Jonathan Williams, of the City broker RFC Ambrian, said: “This is unquestionably one of the finest mining companies in the world right now and it is also one of the best performing stocks on AIM.
“It is acquiring two emerald projects in Colombia, a country that, unlike almost all of its Latin American brethren, has never defaulted on its national debt.”