Aim-listed coloured gemstone producer
 TanzaniteOne reports that it has raised
 about £3,49-million which will be used for the acquisition of gem-quality tanzanite stones in the market.

The company, which raised the funds through a private placing of 23,2-million common shares of 15p each, will also fund the bulk sampling of the company’s tsavorite assets, fund further development work on the company’s tanzanite assets and provide general working capital for the group.

TanzaniteOne head of development Bernard Olivier adds that the company is pleased that it has been able to raise the 
additional capital at a time of turbulence in world markets.

“The placing will enable us to follow our strategy to concentrate on supporting the tanzanite prices by purchasing gem-quality tanzanite through our trading operation in Arusha, Tanzania, and fund further development work on our tanzanite assets, as well as developing our tsavorite projects.

“We are encouraged by the recent signs of improvement in the tanzanite market, particularly the sales and demand increases which were evident in our recent upturn in total sales: $4,64-million in tanzanite sales in the four months to April 30, 2009.”

The company intends to use up to $2-million of the placing proceeds to fund further purchases of gem-quality tanzanite during the recession. 
Further, it plans to use about $1-million of the placing proceeds to develop its tsavorite projects. This is part of its diversification strategy.

TanzaniteOne’s trading operations from its offices in Arusha enable the company to generate a stable tanzanite market and to 
secure a reliable supply of gem-quality tanzanite for its customers. This trading operation focuses on acquiring gem-quality stones of at least 1 ct in the local market.

Further, the funds will be used to con-
tinue the bulk sampling and scoping study of the 20-million-ton alluvial deposit, located 
about 20 km from the existing Merelani tanzanite operation.

The balance of the placing proceeds will be used to fund the general working capital requirements of the business going forward. This includes ongoing mine development costs, tanzanite and tsavorite marketing, as well as the development of new sales and markets. The shares placing will rank with the common shares and will represent 22,31% of the company’s enlarged issued share capital.