Fura Gems Inc. [FURA-TSXV; FUGMF-OTC; BJ43-FSE] said Friday October 11 that it has raised $26.7 million from the first tranche of a previously announced private placement of common shares.
In the first tranche, Fura issued 106.7 million common shares at 25 cents each. Proceeds from the financing will be used for the advancement of Fura’s Coscuez emerald project in Colombia and ruby assets in Mozambique, as well as to fund the closing of the company’s continuing acquisition of a 100% interest in ruby prospecting license No. 5572L in the Monepuez district of Cabo Delgado province in Mozambique.
Fura is a member of the Forbes & Manhattan Group, a Toronto-based merchant banking group.
Fura bought a majority interest in the Coscuez mine in October 2017, thinking it can significantly ramp up production at what is regarded as one of the world’s most prolific emerald producers. Coscuez earned that reputation after being in production for over 400 years, and yielding some of the world’s finest emeralds, including the 7,000-carat Emilia Emerald Crystal, the largest ever discovered.
Fura acquired the majority interest from Emporium HS S.A.S., a private Colombia-based company with the intention of increasing production via technology and procedural upgrades. The ultimate goal is to build an emerald supply chain in Colombia.
Emporium HS S.A.S., continues to hold a 21.71% stake in the operation which produced 34,078 carats of emeralds between the fourth quarter 2012, and the second quarter of 2017.
Fura President and CEO Dev Shetty has said the company plans to focus exclusively on the sale of rough gemstones. It will not be involved in the subsequent processes such as cutting and polishing.
“Most of my clients are polishers of gems,” said Shetty, during an interview with Resource World Magazine. “We don’t get into cutting and polishing. Cutting and polishing is a different ballgame. It is very capital intensive.”
Aside for the mine in Columbia, Fura is involved in the exploration and mining of rubies in Mozambique through its 80% effective interest in the four ruby licences (4392, 3868, 3869 and 6811), covering 39,425 hectares, that it acquired in November 2017. It has subsequently agreed to acquire additional licenses that are located in the same geological best as licenses held by Gemfields.
The company’s long term goal is to build an operation with 6 million carats per year of capacity, at a cost of roughly US$16 million.
Meanwhile, the shares issued in connection with the first tranche are subject to a four-month hold period, which expires on February, 11, 2020.
On Friday, Fura shares eased 2.8% or $0.005 to 17 cents, leaving Fura with a market cap of $23 million, based on 135.1 million shares outstanding. The shares are currently trading in a 52-week range of 14 cents and 45.5 cents.