Gemfields (LON:GEM) said this morning it had conditionally agreed to acquire a 75 percent stake in a Mozambique ruby deposit for US$2.5 million.
The project, in the Montepuez district of the country’s Cabo Delgado province, is made up of five mining titles covering 34,000 hectares.
Mining has taken place but only on a relatively small area of the site, and the current owner, Mwiriti Limitada, now wants to scale up the operation.
Gemfields chief executive Ian Harebottle said: “We are particularly pleased to announce this first and consequential step in our diversification into other premium coloured gemstones.
"This is arguably the most important ruby deposit in Mozambique today and its production to date has been likened in quality to both that produced in Burma and also at Winza inTanzania.
"The present owners of the project sought a professional, experienced and transparent partner to assist in developing a potentially world-class ruby project.
"As a London-listed company with a well-established track record in the emerald sector, Gemfields was a natural choice. We look forward tremendously to working with our new partners."
Gemfields owns the Kagem mine in Zambia and has a unique strategy that sees it mine and market emeralds under the Kagem name – a variation on the model used by De Beers to dominate the diamond market.
Last month it said that gemstone production in the first nine months of the current financial year (to 30 June 2011) stood at 22.2mln carats - compared to 17.4mln carats for the entire 12 months of the previous year.