URA raises $1.7M to restart South African emerald mine

Africa-focused URA Holdings (LSE: URAH) has raised £1 million ($1.7 million) in an effort to restart operations at its 74%-owned Gravelotte emerald mine, in South Africa’s Limpopo province.

The company, which acquired the past-producing mine in February, expects trial extraction and processing activities to start as early as 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 a statement.

The capital raising is part of an accelerated bookbuild, a process aimed at determining the price and demand for shares during an initial public offering. 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 the plant’s commissioning, 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. During the 1950s and 1960s it 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 green gemstones have been setting record highs at auctions. Africa-focused Gemfields (LSE: 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 in New York in June. It became both the largest and most valuable gem of its kind ever to sell at auction.