First ruby and pink sapphire mine coming soon to Greenland
Canadian junior True North Gems (TSX-V:TGX) is fine tuning details to start building an open-pit mine that will produce ruby and pink sapphire gemstones starting next year and running until at least 2024.
The Vancouver-based miner, which began exploration about a decade ago, closed Thursday an $11 million finance package with joint-venture partner LSNG that will finally allow it to begin constructing Greenland’s first ruby mine.
True North Gems was granted a 30-year mining licence in March and a construction permit in July for its Aappaluttoq project. Its partner LSNG, a company in Greenland that is majority owned by international Arctic contractor Leonhard Nilsen & Sonner of Norway, recently committed to increase funding for the project. Now LSNG will earn a 27% stake in the project by spending $26 million on infrastructure to get the mine to operational status.
The company expects to start production towards the end of winter of 2015. The Aappaluttoq mine and processing facility will create up to 80 new jobs and will provide a gross revenue royalty to the Government of Greenland of 5.5% on all sales of rubies and pink sapphires.
The royalty will be paid in each year when the total aggregate paid by True North in corporate taxes, withholding taxes and surplus royalty are less than the calculated gross royalty.
Ruby prices have been steadily climbing since 2010. Based on the GemVal index for the gem, its value has almost doubled in the past ten years and sapphire prices are up about 65%.
Images courtesy of True North Gems.