Richland Resources (LON:RLD) has called time on its troubled tanzanite mining operation and agreed a sale of its remaining interest for US$5.1mln.
Richland has been battling illegal miners on its blocks in Tanzania for months, which meant profitable mining has not been possible, it said.
This, allied to its need to raise funds for its new sapphire business in Queensland, prompted the decision.
All of the mining operations are being sold, though not the online retail businesses, with US$10.8mln of liabilities also being transferred to the new owner, Sky Associates.
There may be additional payments due to Richland of US$1.2mln from its joint venture with at the tanzanite operation with state run STAMICO.
The sale requires Tanzanian government approval and a green light from the South Africa Reserve Bank as well as from Richland’s shareholders.
The sale will be for a net consideration of approximately US$4.95mln, and Richland will post a profit on it of approximately US$490,000.
Following completion and expenses Richland would have had a pro forma cash balance at end June of US$6.9 mln with all historic liabilities from TML removed.