HomeDiamonds & GemstonesGemfields bids for Tanzanite One

Gemfields bids for Tanzanite One

Processing plant at
Tanzanite One’s
Merelani Mine in
London, England — MININGREVIEW.COM — 12 September 2008 – Gemfields Resources plc – a leading international coloured gemstone producer with production and exploration assets in Zambia and Madagascar – has offered to buy Tanzanite One Limited in a deal valuing the company – which operates in Tanzania – at about US$58 million (R435 million).

Revealing this development in a news release here today, Gemfields – which plans to use the Farberge brand to market gemstones – proposed a bid of 45 pence a share – that’s 76% above the closing price on 29 August, the last day before Gemfields started buying shares in Bermuda-based Tanzanite One. Gemfields said Tanzanite One’s board would consider the offer at a meeting on 19 September.

Bloomberg News reports that Gemfields is controlled by Pallinghurst Resources LLP, an investment company led by former BHP Billiton CEO Brian Gilbertson. The company – which mines emeralds in Zambia – wants to add production of Tanzanian tanzanite, a blue-hued gemstone, and market it under the Faberge name.

The agency adds that Tanzanite One shareholders can opt for stock or cash. The stock rose 0.5 pence, or 1.1%, to 44.25 pence in London as of 9:25 a.m. today.

Gemfields and Pallinghurst Resources (Guernsey) Ltd., which is classified as a related party, own a combined 14% stake in Tanzanite One, but pointed out that today’s statement “does not amount to a firm intention to make an offer.”

Earlier this week, Gemfields exercised an option to acquire Oriental Mining s.a.r.l., which has rights to exploration licenses in Madagascar covering emeralds, rubies, sapphires, tourmalines and garnets.