Filed under :- miningweekly.com , Gemstone-miner and explorer Gemfields Resources has resumed trading on the London bourse's Aim market on Tuesday, after shares were suspended following the December 18-announcement of a reverse takeover by Pallinghurst Resources.
Brian Gilbertson's Pallinghurst would buy 55% of Gemfields, in exchange for a 75% stake in the Kagem emerald mine, in Zambia. Gemfields would acquire the Kalgem stake by buying Greentop International and Kinera Group from the Pallinghurst-controlled Rox Limited.
The transaction also included an option for gemstone exploration licences in Madagascar, and a 15-year licence to use the Faberge luxury brand name, which Gilbertson bought early last year, for its coloured gemstone.
The gemstone miner would pay £62,06-million for the acquisition, which was still subject to shareholder approval, by issuing some 137,91-million new shares to Rox.
"The acquisition will provide Gemfields with substantial and important building blocks for the future," Greenfields nonexecutive chairperson Graham Mascall commented.
The company also announced a capital raising of £30-million to fund its future developments.
Pallinghurst said in a statement that Rox would participate in the share placing by subscribing for new Gemfields shares totalling £16,5-million, at 45p a share.
Sean Gilbertson would also become the interim CEO of Gemfields.
Brian Gilbertson, chairperson of Pallinghurst, commented that the transaction with Gemfields would enhance the popularity of gemstones.
"The coloured gemstone industry forms a key part of the luxury goods sector, but is currently fragmented and undercapitalised. Despite minimal consumer marketing, unreliable supply chains and a dearth of ethically-sourced product, the popularity of these gemstones has increased in recent years, with corresponding price rises. Pallinghurst believes that the Gemfields initiative will harness and enhance this trend in the international market for coloured gemstones, emulating the development of the diamond industry."
Gemfields shareholders would convene a extraordinary general meeting on June 5, where approval for the transaction would be sought.
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