Gemfields Biggest Shareholder Offers to Buy Out Mining Firm

(IDEX Online) – Pallinghurst Resources Ltd. which owns 47 percent of Gemfields Plc, the largest gemstones mining firm in the world, has offered to buy up the rest of the shares.

Pallinghurst is offering almost two of its shares per share in Gemfields, the world’s largest emerald producer, but which also mines rubies and other gemstones. Gemfields independent board advised shareholders not to take any action for now.

Pallinghurst said the offer values Gemfields shares at 38.5 pence each, and values the company overall at $277 million. Analysts say that Pallinghurst is trying to take advantage of the stock's recent weakness.

Pallinghurst said it had support of 28 percent of shareholders, giving it 75 percent backing and making the offer unconditional.

Gemfields produces emeralds at its Kagem mine in Zambia and mines rubies at Montpuez in Mozambique. Emerald prices have soared in the last decade as Gemfields has boosted production backed up by advertising and promotion. In the past, emeralds were largely produced by artisanal miners which led to inconsistent and uncertain supply.