LSE-listed diversified explorer URA has completed the acquisition of 100% of the issued shares in Gem Venus Holdings – the owner of the majority interest in the Gravelotte emerald mine, in South Africa’s Limpopo province, from ASX-listed Magnum Mining and Exploration.

Through the acquisition, URA has acquired a licence giving the rights to exploit the historical Gravelotte mine, which is also known as the Cobra emerald mine.

According to URA, Gravelotte was historically the largest emerald mine in the world and was operational from 1929 to 2002, with total recorded historical emerald production totalling nearly 113-million carats.

Following the completion of the acquisition, URA will issue Magnum with four-million ordinary shares, credited as fully paid, equal to the consideration owed on completion of £100 000 and calculated using an average mid-market closing price of 2.5p.

URA chairperson Ed Nealon says the vast majority of the purchase price is to be paid from future emerald production and sales.

An additional consideration of A$200 000 (about £123 000) in cash is due for each tranche of five-million carats worth of emeralds produced by Gravelotte, up to a maximum aggregate amount of A$2-million (about £1.23-million) as a production royalty.

In 2022, URA established an independent maiden mineral resource estimate of 29-million carats of contained emerald in two out of the openpittable deposits on the Gravelotte property. Twelve additional exploration targets, totalling between 168-million and 344-million carats, were also established.

Of the total 29-million carats of contained emerald, the Cobra pit holds 1.2-million tonnes grading 6.4 g/t for 19.4-million carats of contained emerald, while the nearby Discovery deposit holds 700 000 t grading 5.7 g/t for 9.6-million carats of contained emerald.

URA says the Joint Ore Reserves Committee- (Jorc-) compliant resource at Gravelotte highlights the significant remaining resource and potential of the mine, paving the way to committing to the restart of operations by URA.

URA notes that mine, processing plant and infrastructure upgrades are currently in progress, with the goal of restarting production this year.

While URA will need to acquire a modest amount of new mining and processing equipment (using optical sorters to replace the labour-intensive hand sorting of the past), the company expects to be able to bring Gravelotte quickly back into production.

“During 2022, we made significant progress towards the restart of mining operations. URA established the first-ever code-compliant independent resource for the Gravelotte project by commissioning an initial Jorc-compliant resource, which identified 29-million carats of contained emeralds. This resource represents a life-of-mine of over 10 years at historical peak production rates.

“We are now preparing for the restart of mining and processing operations and believe that this can be achieved by a modest capital investment,” he says.

Emeralds were discovered in the Gravelotte area in 1927 and, since then, several companies have mined and explored the area for emeralds. Historical records indicate that during the 1960s, the Gravelotte project was the largest emerald mine in the world, employing over 400 sorters.

From 1929 to 2002, the total recorded emerald production from Gravelotte and the surrounding area was nearly 113-million carats, of which Gravelotte was substantially the largest contributor.

The Cobra openpit located on the Gravelotte mine property is historically the biggest single emerald-producing openpit in the region, and is reported to have produced 21-million carats in the mid-1960s.

Gem Venus owns 74% of the issued share capital of Adit Mining and Venus Emerald, which holds all the mineral rights in respect of emerald mining and extraction at Gravelotte.

The remaining 26% of the issued share capital of Adit and Venus is held by a black economic empowerment-compliant structure predominantly consisting of local employees and the local community.

These mineral rights are held through a long-term mining lease agreement providing all surface access and rights required for ongoing exploration and development of Gravelotte, including the use of management housing, offices, staff accommodation, workshops and other existing mine infrastructure on site.

URA’s overall immediate objective is to complete preparatory work and bring Gravelotte back into commercial production.