Magnum Mining and Exploration Limited, has signed a deal to divest its 74 per cent stake in the Gravelotte Emerald project in South Africa to URA holdings for (A$2 million) $1.5 million.
The sale includes Magnum’s wholly owned South African subsidiary Gem Venus Holdings, which holds Magnum’s interest in the Gravelotte project. Under the terms of agreement, URA will acquire the stake in the project for A$2 million and issuing £100,000 worth of its shares.
The cash consideration is expected to be paid in tranches with the first A$200,000 paid for each 5 million carats of gemstones produced at Gravelotte, and the sum is payable within 30 days of the date on which the production was determined. Thereafter, the sum of A$200,000 will be payable for each 5 million carats of gemstones produced at the project.
While URA would take-over the 74 per cent stake, the remaining 26 per cent of the issued shares are held by a Black Economic Empowerment compliant structure predominantly consisting of local employees and the local community.
Bernard Oliver, CEO of URA said: “We are delighted to have signed the SPA for the acquisition of the world renowned Gravelotte Emerald mine… We believe that Gravelotte mine has significant emerald resources remaining that will enable restarting and sustaining of the ongoing long-term mining activities.”
Regarding the terms of transaction, it is “conditional on URA and MGU obtaining the consent to the Transaction by the Minister of Mineral Resources pursuant to the Mineral and Petroleum Resources Development Act 2002 (South Africa),” according to a press statement by Magnum.
According to Magnum, the sale forms part of its efforts to crystallize value from its non-core assets and “remain focused on advancing its Buena Vista Project, Nevada, in establishing a green pig iron steelmaking facility”.
URA Responsible for Operational Costs of the Project
In a press statement, Magnum Mining and Exploration, said: “As the company has previously reported to the market, activities at the Gravelotte Project remain restricted to care and maintenance and desk stop studies due to reduced travel and restrictions caused by the Covid-19 pandemic.”
Based on the agreement, URA holdings will also be responsible for all of the projects operations costs of the project until it is completed. The Company confirmed that URA is not a related party or substantial holder of Magnum for the purposes of ASX Listing Rule 10.1.
Ed Nealon, Chairman of URA said: “When the opportunity to secure the acquisition of the Gravelotte emerald mine recently presented itself, we immediately seized it. The acquisition fits in perfectly with our stated goal of identifying unique opportunities in the Southern African mineral sector and presents a near to medium term production opportunity.”
Located in the Limpopo Province of South Africa, the Gravelotte Project produced nearly 113 million carats from 1929 to 2002. It was the largest emerald mine in the world during the 1960s employing over 400 emerald sorters alone.
Magnum recently completed an extensive investigation into all aspects of the re-commencing of mining activities including conducting trial mining and processing testwork at Gravelotte. Much of the extensive mine site infrastructure has recently been refurbished and upgraded in preparation for recommencing operations.
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