LSE-listed mineral exploration firm URA has closed the deal to buy 100% of the issued shares in Gem Venus Holdings, which holds a majority stake in the Gravelotte emerald mine in Limpopo province, South Africa.

The seller of the stake was ASX-listed Magnum Mining and Exploration.

Gem Venus holds 74% of the issued share capital of Adit Mining and Venus Emerald, which has all the mineral rights for emerald mining as well as extraction at Gravelotte.

The remaining 26% is owned by an economic empowerment-compliant structure that mainly comprises the local community and staff.

With the transaction, URA also acquired a licence to obtain rights to exploit the historical Gravelotte mine, also called the Cobra emerald mine.

Operational between 1929 and 2002, Gravelotte produced around 113 million carats (Mct) of emeralds.

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By GlobalData

In accordance with the agreement, the firm 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’.

A further cash payment of A$200,000 is due for each 5Mct of emeralds produced at the Gravelotte mine, with a maximum aggregate of A$2m as a production royalty.

Historically, it was the world’s largest emerald mine.

Last year, URA revealed an independent maiden mineral resource estimate of 29Mct of contained emerald in two of the Gravelotte property’s open-pit deposits.

It also established another 12 exploration targets, totalling between 168Mct and 344Mct.

The immediate goal of URA will be to conclude preparatory work and recommence commercial production at Gravelotte this year.

The mine, processing plant and infrastructure overhaul are currently underway to resume production.

URA chairman Ed Nealon stated that a large part of the transaction will be paid from future production.

Nealon added: “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 Resource, which identified 29Mct of contained emeralds. This resource represents a life-of-mine of over ten years at historical peak production rates.”