Montepuez Ruby Mine, Mozambique

Overview

The Montepuez ruby deposit is located in the northeast of Mozambique in the Cabo Delgado province. Covering approximately 33,600 hectares, it is believed to be the most significant recently discovered ruby deposit in the world.

Gemfields’ first Mozambique ruby auction took place in Singapore in June 2014, and marked a milestone for the global ruby trade. The Gemfields operation offers an opportunity to expand the consumer base for responsibly sourced, consistently graded, and reliably supplied ruby. The US$33.5 million revenue generated by the inaugural auction put the spotlight on the world’s largest ruby deposit, located in Montepuez, Mozambique.

Gemfields reached an agreement with Mwiriti Limitada, a private Mozambican company, in June 2011 to acquire a 75% controlling interest in a new joint venture company, Montepuez Ruby Mining Limitada (MRM). MRM received a 25-year mining and exploration licence from the Mozambique Government in February 2012.

The area is comprised of two adjoining mining titles, representing the first large-scale mining activity to take place in the Montepuez region. Following issuance of the licence, the project team established basic infrastructure to accommodate exploration and development. Bulk sampling commenced in August 2012 and has continued to scale up progressively, producing consistently encouraging results. Core infrastructure has been established and will accommodate a smooth transition to commercial mining once bulk sampling has been completed. A semi-mobile ore processing plant has been designed, built and tested, and its operating parameters continue to be improved simultaneously with the general understanding of the ore characteristics.

Key facts

Location Montepuez district, Cabo Delgado province, Mozambique
Acquisition by Gemfields June 2011
Ownership structure 75% Gemfields, 25% Mwiriti Limitada
Gemstones Ruby and corundum
Mining method Open-pit, bulk sampling, 100 tonnes per hour capacity

Timeline

June 2011 JV agreement signed between Gemfields plc and Mwiriti Lda
August 2011 Montepuez Ruby Mining Lda comes into existence
February 2012 Mining licences 4702 and 4703 issued in the name of MRM, valid for 25 years
March 2012 Environmental licences issued in the name of MRM, valid for five years
April 2012 First fleet of equipment arrive on site
August 2012 Bulk sampling commences
November 2012 Commissioning of wash plant and start of gem sorting in the sort house
June 2014
Gemfields’ first Mozambique ruby auction took place in Singapore, generated US$33.5 million

Geology and exploration

About 150 km to the west of the coastal city of Pemba lies the Montepuez ruby mine. The mining concession is within the wedge-shaped Montepuez Complex (defined by Boyd et al., 2010). The concession is located at a geologically critical junction between the north-south trending Mozambique Belt and the east-west trending Zambezi Belt. Both are “treasure-bearing” Neoproterozoic (approximately 800–500 million years old) orogenic belts within the global Pan-African tectonic framework. Several major geological complexes are separated by major thrusts and shear zones. Complex thermal and deformational events provided ideal temperature and pressure for forming ruby, garnet, and other economic minerals.

Primary rubies are formed when fluid derived from the parental magma interacted with the host rocks under a silica unsaturated environment. After hundreds of millions years of erosion, rubies are liberated from the host rock and were transported and concentrated by water and eventually settled in the alluvial, colluvial, and eluvial deposits.

Primary and secondary ruby mineralisations have been identified at various places throughout the mining permit.  Exploration Core drilling data indicate that the primary mineralized amphibolite extends to at least 30 meters below the surface. The amphibolite unit strikes roughly in east-west direction and its continuity has been established intermittently over about 20 km in the central part of the concession.

The eternal cycles of weathering and erosion are constantly shaping the surface of the Earth. Once the ruby-bearing rock has been broken down by physical and chemical weathering, it is ready for erosion, which occurs when rock fragments or sediments are picked up and natural concentration takes place by the action of water and gravity. The targets of MRM’s exploration program are also the richest paleochannels, where large reserves of fine rubies are buried.

The most significant of the secondary ruby has been mined in ‘Ntorro’ and ‘Mugloto’ which are approximately six kilometres to the west of the core sector, both of which fall within the Montepuez licence area.

Following encouraging results from the original bulk sample pit at ‘Maninge Nice’ in the core sector, the original pit has been expanded to include adjacent areas from which both secondary and primary ruby mineralised material has been obtained. Two additional bulk sample pits in the core sector, one in the ‘Glass A' area and one in the ‘Central Area’ were also excavated together with another pit to the west of the current processing plant area. Five bulk sampling pits are also in progress at ‘Mugloto' area.

An extensive exploration programme is under progress by auger drilling and core drilling, and a resource statement is scheduled to be completed in 2016.

Montepuez JORC Maiden Resource and Reserves

Classification             Tonnage (kt)        Grade (ct/t)       Contained Carats
Proved            
Probable 27,549           15.7          431,620
Total 27,549           15.7          431,620
       
Classification             Tonnage (kt)        Grade (ct/t)       Contained Carats
Indicated 7,122           59.5          423,000
Inferred 378           115.4          44,000
Total 6,420           281          1,801,500
​Source : SRK, Kagem 100% basis

FY16 results

MONTEPUEZ Annual Production Summary Units Year to 30 June 2013 Year to 30 June 2014 Year to 30 June 2015 Year to 30 June 2016
Gemstone production (ruby and corundum) in million carats million carats 1.9 6.5 8.4 10.3
Ore production (primary and secondary) in thousand tonnes thousand tonnes 26.7 408.6 438.9 510.4
Ore processed (primary and secondary) in thousand tonnes carats/ tonne 13.3 158.2 325.4 295.2
Grade (ruby and corundum/ore processed) in carats/tonne million tonnes 143a 41a 26 35
Waste mined in thousand tonnes   63.0 1921.1 2530.5 3018.3
Total rock handling in thousand tonnes   89.7 1600.6 2964.4 3528.7
Stripping Ratio   2.4 2.9 5.8 5.9

(a) The grade disclosed in the June 2014 Annual Report was calculated based on gemstone production divided by ore production. The grade is now calculated based on gemstone production divided by ore processed, providing a more accurate grade. The 2013 and 2014 grades have been restated.