Gemfields (LON:GEM) said today it expects first production from its newly acquired ruby deposit in Mozambique later this year.
The company has completed its acquisition of a controlling interest of the deposit based in the Montepuez district of the Cabo Delgado province.
The licences for a period of 25 years were formally issued by the Mozambican government on 23 February to a new company, Montepuez Ruby Mining Limitada, in which Gemfields holds a 75% interest.
Gemfields said it intends to initiate additional bulk sampling and diamond drilling of the area with first production expected later this year.
The new project comprises mining and exploration rights covering approximately 34,000 hectares and is believed to be potentially one of the largest ruby concessions in private hands in the world.
Gemfields said that mining had previously taken place on a relatively small and informal scale and activities will now be expanded considerably.
The total consideration payable is US$2.5 million, of which the final stage payment will now be made.
Ian Harebottle, Gemfields chief executive, said: "This is a particularly exciting development for Gemfields and we're thrilled to add rubies to our emerald and amethyst portfolio.
“A project team is already on site, assorted items of capital equipment have arrived and more are on the way. We will now initiate additional bulk sampling and diamond drilling of the area and expect our first production later this year."
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