November 29, 2018 - 7:00 AM EST
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Fura Provides Update on Ruby Transactions in Mozambique

Key Highlights

  • The purchase consideration for the Mustang Ruby Assets in Mozambique is reduced to A$2,800,000 from A$9,999,999 of Fura shares by way of an A$2,800,000 Loan Agreement entered into between Fura and New Energy Minerals Ltd. (“NXE”, formerly Mustang Resources Limited).
     
  • The final date for satisfying the conditions to Closing on the Mustang Ruby Assets is extended to February 28, 2019, which date is extendable by Fura, pursuant to a Merger of Ruby Assets Agreement Amending Agreement.
     
  • Fura purchases additional and strategic ruby wash plant capacity in Mozambique from NXE for A$489,439.86.

Dev Shetty, President and Chief Executive Officer: “We are very pleased to assist New Energy Minerals, one of our counterparties in the several Mozambican ruby acquisition projects that are currently underway, via an A$2,800,000 Loan Agreement. The drawdown rules of that Loan Agreement are limited to assisting New Energy in its financing arrangements with Arena and closing of our transaction with New Energy. As a result of this loan, the purchase consideration for the New Energy Mozambican assets has been significantly reduced. As such, this transaction constitutes a major win-win for both Fura and New Energy shareholders.”

TORONTO, Nov. 29, 2018 (GLOBE NEWSWIRE) -- Fura Gems Inc. (“Fura” or the “Company”) (TSXV: FURA, OTC: FUGMF and FRA: BJ43) announces that, in connection with its ongoing transaction to acquire interests in nine ruby licences/concessions in Mozambique (the “Acquisition”) (please see Fura’s press release dated July 16, 2018 for further details), it has entered into a loan agreement (the “Loan Agreement”) with New Energy Minerals Ltd. (formerly Mustang Resources Ltd.) (“New Energy”) pursuant to which Fura will loan New Energy A$2,800,000 (the “Loan”). Drawdown of the Loan by NXE is subject to customary conditions precedent, including NXE solvency, no event of default under the Loan Agreement, the obtaining of all necessary approvals of the TSX Venture Exchange and Australian Securities Exchange, as applicable, as well as either (i) the statutory demand (the “Statutory Demand”), served on October 29, 2018 on New Energy by Arena Structured Private Investments (Cayman) LCC (“Arena”) in connection with convertible notes issued by New Energy, being withdrawn by Arena, or (ii) Arena agreeing to withdraw the Statutory Demand.

In connection with the Loan, Fura has entered into a Merger of Ruby Assets Agreement Amending Agreement dated November 27, 2018 (the “Amending Agreement”) with its wholly owned subsidiary, Cobadale Ltd., New Energy, Regius Resources Group Ltd. (“Regius”) and Montepuez Minerals Mauritius Ltd (“Montepuez”), pursuant to which such parties have agreed to amend the Merger of Ruby Assets Agreement dated July 14, 2018, as amended (together with the Amending Agreement, the “Agreement”).  Pursuant to the Amending Agreement, the total purchase price under the Agreement for the Mustang Assets and Regius Assets, as detailed below, is reduced from A$15,000,000 to A$7,800,000, and the total purchase price for the Mustang Assets shall be the amount of the Loan (the “Mustang Closing Payment”).

Pursuant to the Amending Agreement, the Mustang Closing Payment constitutes full and final payment by Fura to Mustang under the terms of the Agreement for the purchase and sale of interests in three New Energy ruby licenses/concessions in Mozambique as follows: (i) 75% of the issued shares of Montepuez which owns a 70% interest in mining licence 5030L and an 80% interest in mining concession 8921C; and (ii) a right to earn a 65% interest in mining concession 8955C under a joint venture agreement (collectively, the “Mustang Assets”). Prior to the entering into of the Loan Agreement, the consideration payable for the Mustang Assets under the Agreement amounted to A$9,999,999 of Fura common shares, to be issued in three equal tranches of A$3,333,333 each at closing of the Acquisition (“Closing”), within 12 months of Closing and within 20 months of Closing, and at a price per share respectively of C$0.50, C$1.40 and C$1.80.

The Amending Agreement also permits Fura to close separately on the Mustang Assets, on the one hand, and on the interests in six licences/concessions held by Regius, on the other hand (the “Regius Assets”), as follows: (i) 20% of the issued shares of Montepuez, 80% of the shares in Rio Buzi Resources Limitada (5980L/9307C), 80% of the shares in RQL Rubies S.A. (7083L and 7251L) and a right to earn interests in   licences 6064L, 6106L and 8188L. In addition, the Amending Agreement extends the drop dead dates for the Mustang Assets to February 28, 2019 (the “New Energy Drop Dead Date”); provided, however that if any of the conditions or documents to Closing that are to be satisfied or delivered by NXE have not been satisfied or delivered by February 28, 2019, then Cobadale shall have the right to extend the New Energy Drop Dead Date by successive one month periods until such time as such conditions or documents are satisfied or delivered.

Fura is also pleased to announce that it has purchased from New Energy additional ruby wash plant capacity to be deployed at Fura’s mining licences. The purchase consideration paid by Fura to New Energy for such additional capacity is A$489,439.86

Further to the Company’s press release dated September 17, 2018, the Company confirms that it continues to expect to use the net proceeds of the recently closed private placement financing (the “Financing”) to complete the Acquisition, complete the acquisition of mining licence 5572L (please see the Company’s press release dated July 26, 2018) (together with the Acquisition, the “Transactions”) and for general corporate purposes.  The Company confirms that should the Company not be able to complete the Transactions, the net proceeds of the Financing will be used by the Company for general corporate purposes, develop its current mining assets and for future acquisitions.

For more information about Fura Gems Inc., please contact:

Fura Gems Inc. 
Dev Shetty - President & Chief Executive Officer
Tel: +971 4 240 8760
[email protected]
Brad Scharfe
Director – Investor Relations
Tel: +1 (778) 386 1313
[email protected]
Public Relations
Tavistock (UK)
Jos Simson / Barney Hayward
Tel: +44 207 920 3150
[email protected]

About Fura Gems Inc.

Fura Gems Inc. is a gemstone mining and marketing company which is engaged in the mining, exploration and acquisition of gemstone licences. Fura’s headquarters are located in Toronto, Canada and its administrative headquarters are located in the Almas Tower, Dubai. Fura is listed on the TSX Venture Exchange under the ticker symbol “FURA”.

Fura is engaged in the exploration of resource properties in Colombia and owns a 76% interest in the Coscuez emerald mine in Boyacá, Colombia.  Fura is also involved in the exploration and mining of rubies in Mozambique through its 80% effective interest in the four ruby mining licenses (4392L, 3868L, 3869L and 6811L).

Regulatory Statements

This press release may contain “forward looking information” within the meaning of applicable Canadian securities legislation. Forward looking information includes, but is not limited to, statements with respect to the Company’s ability to complete the Acquisition, the Loan and the Amending Agreement; the Company’s use of proceeds of the Financing, and the Company’s performance. Generally, forward looking information can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to: general business, economic, competitive, geopolitical and social uncertainties; the actual results of exploration, development and production activities; access to sufficient financing to continue the development of its assets; regulatory risks; risks inherent in foreign operations, uncertainties with respect to the Company’s assets; legacy environmental risks, title risks and other risks of the mining industry. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE. 

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Source: GlobeNewswire (November 29, 2018 - 7:00 AM EST)

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