Gemfields plc has announced that it has “entered into binding agreements” to acquire controlling interests in two emerald projects with operations and prospects located predominantly in the Boyacá state in Colombia.

The first agreement relates to the  Coscuez Emerald Mine, Boyacá Department, Colombia.  “Under the terms of the transaction agreements, Esmeracol S.A. will transfer the Coscuez Licence to a newly incorporated Colombian company (Coscuez NewCo) and Gemfields will, at completion, acquire an indirect 70% interest in Coscuez NewCo,” explained Gemfields. “On completion of procedures, Gemfields will  hold mining contract no. 122-95M (the  Coscuez Licence), which is presently held by Esmeracol S.A.” 

The Coscuez mine, which has been in operation for 25 years, is  considered as one of the more significant emerald mines and is  known to have produced some of Colombia’s finest emeralds.

The total consideration payable under the share purchase agreement is US$ 15 million.  This will be paid in tranches and partly in cash and partly through Gemfields shares.

Procedures for this deal are expected to be completed by March 2016, once the transfer of the Coscuez Licence to Coscuez NewCo has taken place.

The second agreement is for selected exploration prospects held by ISAM Europa S.L.  This relates to the  “Acquisition of 75% and 70% interests in two Colombian companies holding rights in respect of mining licence applications and assigned concession contracts respectively (of which eight have been approved and issued),” said Gemfields. “The total package of mining licence applications and assigned concession contracts cover approximately 20,000 hectares.”

The total consideration payable by Gemfields under the share purchase agreement for this deal is US$ 7.5 million, which is  payable in tranches.

Ian Harebottle, CEO of Gemfields, commented: “Gemfields is delighted to announce its entry into Colombia, home to some of history’s most legendary emerald mines and a country with tremendous potential. The proposed acquisitions will require further work and additional exploration before any meaningful production commences but they are clearly in line with our strategy of expanding Gemfields’ global footprint in a considered yet cautious fashion. The acquisitions offer exciting green- and brownfield growth opportunities over the medium to longer term.”