Option Agreement and Issue of Equity


 

TIDMGOA TIDMOBT 
 
RNS Number : 7981O 
Gemstones of Africa Group PLC 
13 March 2009 
 

 
 
 
GEMSTONES OF AFRICA GROUP PLC 
 
 
("GOA" or the "Company") 
 
 
Option Agreement and Issue of Equity 
 
 
Gemstones of Africa Plc (AIM:GOA), is pleased to announce a collaboration and 
option agreement leading to a joint venture agreement on a group of emerald 
mining licences in Tanzania, Africa. GOA has the exclusive right to explore and 
mine for gemstones on six mining licences and one prospecting licence in 
Tanzania. Its partners are Obtala Resources Plc ("Obtala") and Obtala's 
subsidiary Mindex Invest Limited. It is also acquiring a prospecting licence 
with ruby potential by the same arrangement. 
 
 
The six mining licences, granted for gemstones, occur in the Manyara area of 
Tanzania, adjacent to Lake Manyara. The Manyara area is known for a variety of 
gemstones including emeralds, alexandrite, ruby, garnet and spinet. These mining 
licences are contiguous covering a total area of 6km2. The prospecting licence 
is located at Matombo, in the Morogoro District, an area known for hosting ruby 
and other gemstones. 
 
 
Under the terms of the option agreement the Company will acquire the sole right 
and option to purchase an initial twelve and a half per cent. beneficial 
interest in the licences in exchange for issuing common shares the equivalent of 
five per cent. of the Company's issued share capital to Obtala (Option 1), 
totalling 71,428,571 shares. This equity, which equates to a value of GBP446,428 
(based on the closing price on 12 March 2009 of 0.625p per Ordinary Shares), 
will be placed in Obtala treasury and are expected to be admitted to trading on 
AIM on or before 19 March 2009. 
 
 
If within 24 months of the completion of Option 1 GOA have incurred exploration 
expenditures in the aggregate amount of not less than US$75,000, then GOA are 
further granted by Obtala the sole and exclusive right to a further additional 
twelve and a half per cent. beneficial interest in the licences (totalling 
twenty five per cent.). 
 
 
Chief Executive David Hargreaves commented: "These licences, on the shore of 
Lake Manyara, are in a known emerald belt which has been worked for some years. 
They have the benefit of full mining rights, which should speed up the path to 
production. The company intends to pursue the principle of mine-to-market 
operation, servicing dedicated customer outlets.  Tanzania is a fertile source 
of gemstones and offers a progressive investment profile." 
 
 
For further information please contact: 
 
 
Gemstones of Africa Group Plc     Tel. 07884437468 
David Hargreaves, CEO 
 
 
Daniel Stewart & Company plc     Tel. 020 7776 6550 
Stewart Dick /Simon Leathers 
 
 
Notes: 
Gemstones of Africa Group Plc. is the holding company of a mineral exploration 
and development group focusing on gemstone opportunities in Africa. The Group is 
led by a management team which has international experience of Gemstones and 
Mining in emerging markets worldwide. The Group's objective is to enter into 
joint ventures on a number of projects in East Africa and, ultimately, to 
increase the value of its assets through the development of these resources and 
where appropriate, commence production of these economically feasible assets. 
 
 
The Group's strategy will focus on working with local partners to promote a 
'mine-to-market' philosophy and develop fair trade principles. It is proposed to 
produce raw gemstones, undertake the cutting and market the finished quality 
gems to realise the full value of the assets. The Directors will utilise both 
internal and external expertise to develop the Mineral Assets and ensure that 
all gemstones are produced and marketed according to these fair trade 
principles. 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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