TanzaniteOne reaches share-split agreement with government

Gemstone producer and developer Richland Resources on Tuesday said its subsidiary TanzaniteOne Mining and Tanzanian State-owned mining arm Stamico have signed a letter of intent setting out the terms of a new mining licence for the Aim-listed group’s Tanzania-based tanzanite deposits.

The parties aimed to enter into a formal binding agreement cementing the terms of how the operations would be undertaken, as well as the division of costs and revenue, under the 50:50 mining licence, which was expected to be issued during the next few days.

“We are pleased to have reached mutually acceptable terms in principle for a partnership with the government of Tanzania that recognises the company's investment under its former licence in full compliance with the local participation requirement of the 2010 Mining Act and provides a commercially acceptable framework for the continuation of its mining operations in Tanzania,” Richland CEO Bernard Olivier said in a statement.

The parties were in the process of determining a “fair and reasonable sum” to be paid by Stamico – either in full or using 40 per  cent of the yearly profit due to it from the mining of tanzanite – to TanzaniteOne in exchange for a 50 per cent stake in the new mining licence.

Under the agreed terms, neither TanzaniteOne nor Stamico could sell the shareholding without permission or right-of-first refusal.

Olivier pointed out that all revenue and profits earned from activities other than mining by TanzaniteOne were excluded from the profit sharing arrangements, and that all current assets, including buildings, machinery and plant and equipment, remained under the ownership of TanzaniteOne.

Stamico would further facilitate and liaise with the local government authorities to ensure that necessary regulatory and law enforcement actions are taken efficiently as the two companies work to curb tanzanite smuggling and illegal mining operations in the area.
Source: international wire services
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