In August, following a 5-million placement,
The company is a spinoff of South African-based African Gem Resources. At the end of April, African Gem sold its tanzanite business and related assets to Tanzanite One. AFGEM Diamonds was formed at the time of the sale.
Tanzanite One is involved in all aspects of the tanzanite industry, from exploration and mining to marketing. At the end of July, Tanzanite One common shares were consolidated in a ratio of 3-to-1.
Tanzanite One issued 11.9 million new common shares at 42p per share. This represents 17% of the 69.9 million shares in issue. The market capitalization based on the issue price is 29.4 million.
Tanzanite is found in the Simanjiro district of Tanzania, about 15 km south of Kilimanjaro International Airport. The world’s only known source for the gemstone is in a 5-by-2-km strip of land near Mount Kilimanjaro. In 1990, the Tanzanian government divided this mining area into four blocks.
Merelani Mining, a subsidiary of Tanzanite One, holds the mining licence over the 8-sq.-km Block C. The company also holds prospecting licences in adjoining areas.
Currently six shafts are being developed along the strike of the mineralized horizon. There is an upper and a lower horizon. The lower horizon has been tested to 300 metres and remains open at depth.
Tanzanite is found in boudin structures, commonly along the hinges of folds. Two thousand tonnes of ore per month were processed during the six months ended Dec. 31, 2003. The indicated grade is 65.9 carats per tonne. The indicated resource is about 1 million tonnes to a depth of 300 metres.
Rough tanzanite is also bought from small-scale independent miners. The rough stones are then sold to select customers through a tender process. About 80% of all rough tanzanite is cut and polished in India.
The company owns two cutting and polishing facilities: one in Tanzania and the other in South Africa. The margin between rough and polished tanzanite is about 30%. The Tanzanite Company, a unit of Tanzanite One, operates the polished marketing business. Recently, a subsidiary of The Tanzanite Company has been incorporated in the U.K. to expand marketing of the gem.
An industry body, the Tanzanite Foundation grades and certifies polished tanzanite.
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