URA raises $1.25m to restart South African emerald mine

Infrastructure at the Gravelotte project includes a laboratory and accommodation for up to 400 workers. (Image courtesy of Magnum Minerals (former owner))

Emerald producers-hopeful URA Holdings (LON: URAH) has raised £1 million ($1.25m) in an accelerated bookbuild to restart operations at its 74%-owned Gravelotte emerald mine, located in South Africa’s Limpopo province.

The company, which acquired the old-producing mine in February, expects trial extraction and processing activities to start as early as in the March next year.

“We would like to welcome all our new investors, including the new institutional investors (…) We can now focus on completing the mine and processing plant refurbishment and commissioning and restarting of emerald mining and processing at Gravelotte,” URA chairperson Ed Nealon said in the statement.

Proceeds of the shares placing will be used for the purchase and installation of the remaining capital items, the company said. These include primarily those relating to the processing plant and commissioning of the processing plant, as well as general working capital, it noted.

Operational between 1929 and 2002, Gravelotte  — also known as Cobra emerald mine —produced around 113 million carats (Mct) of emeralds. It was in the 1950s and 1960s the world’s largest emerald mine.

URA recently said it had identified 29 million carats of contained emeralds in what had been the project’s first-ever code-compliant independent resource.

Prices for the coloured gemstones have been setting record highs at auctions. Africa-focused Gemfields (LON: GEM) (JSE: GML) achieved in June three records — highest-ever revenue of $43.7 million, highest-ever average price per carat for an emerald auction and highest ever price per carat paid for a single auction lot.

Dubai-based miner Fura Gems, the owner of the Coscuez emerald mine in Colombia, racketed up $34.8 million for a 55.22-carat ruby New York, also in June. It became both the largest and most valuable gem of its kind ever to sell at auction.