Charlotte Mathews
12 November 2008
Johannesburg — COLOURED gemstones miner Gemfields Resources, which is 28% owned by JSE-listed Pallinghurst Resources, had allowed its offer for shares in Tanzanian-based miner of precious stones TanzaniteOne to lapse, it said yesterday.
The retreat from TanzaniteOne will be a setback to Gemfields, whose stated strategy, according to Pallinghurst's prelisting statement, is to become the "leading producer and supplier of coloured gemstones". Pallinghurst also owns 47,5% of the Fabergé brand.
Gemfields' strategy is directly in conflict with TanzaniteOne's. TanzaniteOne chairman Ami Mpungwe said the company's "ultimate ambition (is) to become the world's largest producer and supplier of premium coloured gemstones".
Gemfields CEO Sean Gilbertson said there were definitely other opportunities for Gemfields to pursue. TanzaniteOne was "not the only fish in the fish bowl".
TanzaniteOne is the biggest miner of tanzanites and a year ago announced it would acquire the Lemshuku- Shamberai tsavorite project, also in Tanzania, about 20km from its existing operations.
Gemfields announced three weeks ago it wished to buy 30-million TanzaniteOne shares at 42,75p each. It was conditional on Gemfields being offered at least 50,1% of TanzaniteOne's issued share capital. If successful, the newly purchased shares, combined with its existing stake, would have given Gemfields a 52% holding.
TanzaniteOne's response to Gemfields' offer was to issue 83,7-million "B" shares in the company to a subsidiary, representing 50,2% of TanzaniteOne's enlarged share capital. This was to ensure that if any offer were made for TanzaniteOne, it had to be extended to all the issued shares.
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