- Involved with emeralds, rubies and sapphires
- Focused on brownfield development, rather than early stage
- Acquired Australia-based Great Northern Mining in August 2020
What Fura Gems does:
Fura Gems Inc (PRIVATE), which describes itself as a 'revolutionary' gemstone mining and marketing company", is now a subsidiary of Lord of Seven Holdings FZE called 2771063 Ontario Inc having been taken private and delisted from the Canadian Venture Exchange in October 2020.
It holds ruby assets in Mozambique and emeralds in Colombia and aims to champion transparency at its projects while using sophisticated mining and marketing methods.
The firm is also involved in the exploration and mining of sapphires in Australia through its 100% interests in two mining permits (EPM 25973 and EPM 25978) and three mining licences (ML 70419, ML 70447, and ML 70451). In August 2020 the company acquired Australia-based Great Northern Mining, which boasts 73 leases in Queensland, in a deal worth approximately C$2.86 million, or A$2.9 million.
Its assets are brownfield sites, rather than greenfield, in a bid to reach cashflow positive status sooner. The focus is on mining and marketing material - the group does not cut and polish its stones.
Fura owns a 76% interest in the Coscuez emerald mine in Boyacá, Colombia, where a maiden resource in 2019 showed three million tonnes of inferred resources at 2 carats per tonne for 6 million carats at a conservative value of US$200 per carat.
In Mozambique, the group has ruby assets via its 80% effective interest in each of four ruby licences (4392L, 3868L, 3869L, and 6811L) and one ruby concession (8921C) and its 100% interests in ruby licences 5572L and 7414L and ruby concession 8955C. It holds a 100% interest in a major ruby-producing belt covering around 200 square kilometres (sq km). Across Mozambique as a whole, the firm has ground spanning over 435 sq km.
How is it doing:
On October 28, 2020, Fura Gems announced the successful completion of its previously announced amalgamation with 2771063 Ontario Inc., a wholly-owned subsidiary of Lord of Seven Hills Holdings.
The amalgamation was approved by the shareholders of the company at an annual and special meeting held on October 6, 2020. Under the deal terms, each outstanding common share of Fura, other than common shares already held by the purchaser, were cancelled and exchanged for a redeemable preferred share of the amalgamated corporation on a one-for-one basis and each redeemable preferred share is being redeemed for cash consideration of C$0.15 per share.
Fura's common shares were delisted from the TSX Venture Exchange on or about October 30, 2020.
The company had first announced the take-private deal in August 2020, a deal. Lord of Seven Hills Holdings then already owned around 51.5% of Fura and the price offered for the rest of teh shares was a 42% premium over the volume-weighted average trading price of Fura shares for the 20 days up to August 13 and a 36% premium to the closing price on that date.
On the financing front, in October 2020, Fura revealed that it had arranged an additional bridge financing of US$2.5 million, which would be available for Fura to draw down under a demand promissory note issued to Lord of Seven Hills Holdings FZE, bearing interest at a rate of 10% per annum, payable upon demand, Proceeds of the loan will be used for general corporate purposes, the firm told shareholders.
Looking at operational news, in August 2020, Fura said it had successfully completed the acquisition of Australian mining firm Great Northern Mining Pty Ltd. The acquisition included 73 mining leases and tenements in Australia as well as certain related buildings, plants, fixtures and other equipment.
As consideration for the acquisition, Fura said it has paid around A$2.46mln to the vendor, Mosley Mining, as well as A$239,060 to an Australian bank to release a security interest on certain assets included in the acquisition and A$262,067 to the Queensland Treasury as a cash surety in connection with rehabilitation obligations related to the tenements. A further A$293,093 previously paid to the vendor as a deposit has also been released.
And on October 16, 2020, Fura told investors that it had successfully negotiated a 30-year extension to the Colombian emerald mining licence, which hosts the Coscuez emerald mine in Boyacá. The gemstone group holds a 76% indirect equity interest in Coscuez S.A. (Coscuez), the firm, which holds 100% of the licence.
The licence was initially granted to Coscuez on October 10, 1995, and expired on October 9, 2020. Fura submitted a proposal to the Colombian mining agency in October 2018 to extend the license and an agreement was struck on October 8 this year. The licence covers around 46 hectares and includes exclusive rights to explore, construct and mine emerald deposits. A maiden resource for the Coscuez mine last year showed three million tonnes of inferred resources at 2 carats per tonne for 6 million carats at a conservative value of US$200 per carat.
The new licence extension agreement included the following terms, including that it is re-categorized from a mid-scale miner to a large-scale miner, allowing the firm to mine more than 100,000 tonnes and that the royalty payable to the government in connection with the license is capped at 1.5% of Coscuez’s revenue.
Inflection points:
- Gemstone market moves
- Coscuez emerald mine news
- News from Great Northern Mining acquisition in Australia
What the boss says:
Announcing the take-private deal in August 2020, Fura president and CEO Dev Shetty said: "This transaction represents an opportunity for shareholders of Fura to monetize 100% of their investments in Fura at a cash price that represents a significant premium to the trading price of Fura’s common shares."
"Despite significant marketing efforts, liquidity and access to capital have been challenging, which we believe largely result from the limited number of companies listed on the TSXV that operate in the coloured gemstone sector. We anticipate that with ongoing support from Lord of Seven Hills Holdings FZE throughout the ongoing global COVID-19 pandemic, we will be able to advance our existing projects until we are able to generate revenue," he added.
Contact the author at jon.hopkins@proactiveinvestors.com
