JOHANNESBURG (miningweekly.com) – Coloured-gemstone miner and marketer Gemfields announced on Monday that it had finalised four new debt financing facilities totalling $65-million.

Gemfields CFO Janet Boyce said Gemfields now had the necessary funding to increase its rough ruby production to 20-million carats a year and rough emerald production to more than 40-million carats a year in the next three years.

The company outlined that nearly 70% of the new funding was destined for the Montepuez ruby mine in Mozambique.

Headed by CEO Ian Harebottle, Gemfields is a London-headquartered Aim-listed multinational natural resources company in which JSE-listed Pallinghurst, headed by Brian Gilbertson, has a key investment.

Kagem, the Gemfields emerald mine in Zambia, already has revolving credit of $30-million from Barclays in Zambia, and the latest financial facilities secured by the company total $45-million in overdraft and leasing arrangements for Montepuez.

The first, a $15-million unsecured overdraft facility with Barclays Bank of Mozambique at an interest rate of three months London Interbank Offered Rate (Libor) plus 4% a year, is guaranteed by way of a corporate guarantee.

The second, a $15-million 18-month renewable overdraft facility with Banco Comercial E De Investimentos (BCI) at an interest rate of three months Libor plus 3.75% a year, is supported by a combination of a blank Montepuez promissory note and a Gemfields Mauritius corporate guarantee.

The third, a $15-million 18-month BCI finance leasing facility at an interest rate of three months Libor plus 3.75% a year, is again secured by a blank Montepuez promissory note and Gemfields Mauritius corporate guarantee.

This is in addition to a $20-million 12-month Macquarie financing facility at an interest rate of three months Libor plus 4.50% a year, with financial security including a floating charge over the jewellery and cut-and-polished gemstones from Fabergé, now a division of the company.

Gemfields said in a release to Creamer Media’s Mining Weekly Online that the Macquarie loan, which replaced $25-million raised by the company in April last year, was earmarked for general corporate purposes, with the finance from Barclays and BCI meeting Montepuez's capital expenditure requirements and providing additional working capital.

At a ruby auction in Singapore last month, rubies from the 75%-owned Montepuez earned revenues of $44.3-million and achieved average prices of $29.21/ct.

At a ruby auction in India in May, the 2.78-million carats averaged $5.15/ct, a new record for lower-quality emerald auctions.

Gemfields is also keen on turning sapphire to positive account in Sri Lanka and elsewhere.

AUSTRALIAN RUBY INTEREST

Meanwhile, interest in ruby mining in Mozambique is increasing, exemplified by Australian-listed Mustang Resources preparing to drill and trench, also in Mozambique's Montepuez area.

As reported by Mining Meekly Online last month, Mustang MD Christiaan Jordaan outlined that his company had established an exploration base camp, mobilised critical processing equipment and completed the refurbishment of access roads.

Jordaan also disclosed that ruby explorer Paul Allan had joined Mustang's exploration team as the competent person and consulting geologist for the project.

Jordaan, 30, is Pretoria-born and Harebottle, 51, is Johannesburg-born.