Former Gemfields exc.-led firm grabs Coscuez emerald mine in Colombia

High quality emerald recovered from Colombia in the mountainous department of Boyacá, where the Coscuez mine is located. (Image: Screenshot from MChMineral video.)

Canada-listed Fura Gems Inc. (TSX-V: FUR), a new gemstone mining and marketing company headed by former COO of Gemfields (LON:GEM) Dev Shetty, has scored big as it’s added an iconic emerald mine in Colombia to its portfolio.

The Coscuez mine, located in the mountainous department of Boyacá — one of the world’s best sources of emeralds —, was one of Gemfields’ flagship mines. But the company, the world’s biggest coloured gems producer, walked away from both the operation and Colombia in May this year, as it decided to focus just on its African assets.

Fura will acquire a 76% interest in Esmeracol, the current owner of Coscuez, for $10.2 million from Emporium, which will continue to hold a 21.71% interest in Esmeracol.

Fura Gems aims to resume production at the mine within six months of the deal closure.

Once the transaction is complete, Fura will immediately begin to improve the mine’s infrastructure, with the goal of beginning production within six months of the deal closure, it said in the statement.

The emerald market is closely linked to Colombia’s history and identity. In 1966, 95% of the green stones were mined in the South American country, particularly at Coscuez. But in the late 1970s and 1980s the region became immersed in the so-called “Green Wars,” triggered by country’s leading mining families battling over territory.

Around that tine the “barequeros” — emerald seekers who dig through debris —gathered by the thousands around the Muzo Valley, hoping to easily find the precious coloured gemstones that would rescue them from extreme poverty.

Once the conflict was over, Colombia regained its position as the world’s leading emeralds producer, reaching a record output of 9.82 million carats in 2004.

Investment in the sector dropped in subsequent years as a result of social conflict, violence and instability triggered by drug lords. Colombia’s emerald production dropped from its world-leading position in the early 2000’s down to 2.6 million a decade later, losing ground to Zambia and Brazil.

Coupled with Colombia’s historic recent peace accord with the FARC, however, a recovery trend has become evident. Fura said it believes it has a unique opportunity to implement responsible mining best practices and operational modernization to support the recovery of the sector.

The company has also entered into a purchase agreement to enter the exploration and mining of rubies in Mozambique through the proposed acquisition of an 80% effective interest in four ruby licences.

The famous Fura emerald, at 15,000 carats one of the world’s biggest, was found in the area where Coscuez mine is located. It was named after a mythical unfaithful king whose wife’s tears turned to emeralds.