Mr. Dev Shetty reports

FURA TO ACQUIRE ADDITIONAL RUBY LICENCES IN MOZAMBIQUE

Fura Gems Inc. has entered into a share purchase agreement and non-competition agreement with Gemrock Company Ltd., pursuant to which the company will acquire interests in three ruby mining licences/concessions in the Cabo Delgado province of Mozambique and certain rights to explore in various countries without competition from Gemrock.

Key highlights:

• Acquisition of participating interests in Mozambican mining companies which hold the following ruby mining licences and concessions in Mozambique for a total cash consideration of $3.8-million (U.S.) (approximately $5-million (Canadian)):
  • 100-per-cent participating interests in SRL Mining Ltda., a Mozambican mining company holding each of ruby mining concession 8955C and ruby exploration licence 7414L;
  • 20-per-cent free-carried and non-dilutive participating interest in Ibra Moz SA, a Mozambican mining company holding ruby mining concession 8921C (Fura expects to acquire the remaining 80-per-cent interest in Ibra Moz and thereby ruby mining concession 8921C as part of its acquisition of the New Energy Assets, described below);
• Rights to explore without competition from Gemrock:
  • $3.5-million (U.S.) is payable to acquire rights under the non-competition agreement, pursuant to which Gemrock has agreed not to compete with Fura in certain jurisdictions in respect of its ruby mining activities;
• $500,000 (U.S.) is payable as a reimbursement of Gemrock's expenses in connection with the transactions contemplated in the agreements;
• The acquisition of the participating interests in the Mozambican mining companies holding the licences is expected to add a further 95.15 square kilometres to Fura's existing land package in the main ruby belt of the Montepuez district of Mozambique;
• Fura expects to commence bulk sampling at the licence areas by March, 2020.

Dev Shetty, Fura's president and chief executive officer, commented:

"We are pleased to further consolidate our position in the main ruby belt of the Montepuez district of Mozambique. Completion of the merger of ruby assets agreement with New Energy Minerals Ltd. announced in November, 2018, combined with Fura's acquisition of ruby mining licence 5572L announced on Oct. 17, 2019, and now Fura's anticipated acquisition of the interests in SRL Mining Ltda. and Ibra Moz SA, and thereby the licences, is expected to give Fura the ability to explore for secondary alluvial and a primary deposit of rubies in the region.

"In the last three years, Fura's portfolio of assets has grown significantly. We now have three important silos of colour gemstone properties in our portfolio, emeralds from Colombia, the world's largest emerald supplier in value, rubies from Mozambique, the world's largest ruby supplier by volume, and sapphires from our sapphire project in Australia. With these assets and our hugely experienced team, we believe we are in a strong position to be able to create a leading colour gemstone company. I would like to thank my team in Fura for their passion and dedication and our local partners in Australia, Colombia and Mozambique for their continued support."

Share purchase agreement

Fura and a wholly owned subsidiary of the company have entered into a share purchase agreement dated Feb. 4, 2020, with Gemrock. Pursuant to the share purchase agreement, and subject to the terms and conditions set out therein, Fura will acquire 100 per cent of the issued and outstanding shares of Vedas International DMCC, which holds a 100-per-cent interest in SLR Mining and a 20-per-cent interest in Ibra Moz. As of the date of this press release, 100 per cent of the issued and outstanding shares of Vedas have been transferred to Fura. In addition, in connection with the acquisition, Gemrock agreed to the terms of a non-competition agreement in respect of its ruby mining activities in Russia, Brazil and the Cabo Delgado province of Mozambique.

The aggregate purchase prices for the licences and rights under the non-competition agreement are $3.8-million (U.S.) and $3.5-million (U.S.), respectively, plus $500,000 (U.S.) for the reimbursement of expenses incurred by Gemrock in connection with the acquisition, to be paid as follows:

• $4.5-million (U.S.) in cash to be paid to Gemrock immediately following the execution of the agreements, which amount as of the date of this press release has been paid;
• $3.3-million (U.S.) in cash to be paid to Gemrock upon the company obtaining formal approval from the Ministry of Mineral Resources and Energy of Mozambique (MIREME) for the acquisition of the target companies.

The acquisition is an arm's-length transaction for the purposes of the policies of the TSX Venture Exchange and the company understands that the acquisition qualifies as an exempt transaction under TSX-V Policy 5.3. Fura is not paying any finders' fees in connection with the acquisition. Prior to entering into the agreements, Gemrock delivered to Fura several documents, including, inter alia, a binding tax opinion, confirmation that all amounts set out in the binding tax opinion have been paid and applicable legal opinions. The only condition remaining for completion of the acquisition is obtaining formal approval from MIREME.

Fura is currently in the process of completing the purchase and sale of interests in three additional ruby prospecting licences/concessions in Mozambique as follows: (i) 75 per cent of the issued shares of Montepuez Minerals Pty. Ltd., which owns a 70-per-cent interest in mining licence 5030L and an 80-per-cent interest in mining concession 8921C; and (ii) a right to earn a 65-per-cent interest in mining concession 8955C under a joint venture agreement. Please see the company's press release dated Nov. 29, 2018, for further details regarding the terms of this proposed acquisition, which remains subject to TSX-V approval.

About Fura Gems Inc.

Fura Gems is a gemstone mining and marketing company which is engaged in the mining, exploration and acquisition of gemstone licences.

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