Fura Gems Inc. said in a statement recently that it has entered into a loan agreement with New Energy Minerals Ltd. (formerly Mustang Resources Ltd.) by which Fura will loan New Energy A$ 2,800,000.

“In connection with the Loan, Fura has entered into a Merger of Ruby Assets Agreement Amending Agreement dated November 27, 2018 (the “Amending Agreement”) with its wholly owned subsidiary, Cobadale Ltd., New Energy, Regius Resources Group Ltd. (“Regius”) and Montepuez Minerals Mauritius Ltd (“Montepuez”), pursuant to which such parties have agreed to amend the Merger of Ruby Assets Agreement dated July 14, 2018, as amended (together with the Amending Agreement, the “Agreement”),” Fura announced. “Pursuant to the Amending Agreement, the total purchase price under the Agreement for the Mustang Assets and Regius Assets, as detailed below, is reduced from A$ 15,000,000 to A$ 7,800,000, and the total purchase price for the Mustang Assets shall be the amount of the Loan (the “Mustang Closing Payment”).”

As per the Amending Agreement, the Mustang Closing Payment constitutes full and final payment by Fura to Mustang under the terms of the Agreement for the purchase and sale of interests in three New Energy ruby licenses/concessions in Mozambique as follows: (i) 75% of the issued shares of Montepuez which owns a 70% interest in mining licence 5030L and an 80% interest in mining concession 8921C; and (ii) a right to earn a 65% interest in mining concession 8955C under a joint venture agreement (collectively, the Mustang Assets).

Under the Amending Agreement, Fura is permitted to close separately on the Mustang Assets, on the one hand, and on the interests in six licences/concessions held by Regius, on the other hand. In addition, the Amending Agreement extends the drop dead dates for the Mustang Assets to February 28, 2019. Further, if any of the necessary conditions or documents to Closing have not been satisfied or delivered to NXE by February 28, 2019, Cobadale shall have the right to extend the New Energy Drop Dead Date by successive one month periods until such time as such conditions or documents are satisfied or delivered.

Fura has also purchased from New Energy, additional ruby wash plant capacity to be deployed at Fura’s mining licences for a consideration of A$489,439.86.

The Company confirmed that it expects to use the net proceeds of the recently closed private placement financing to complete the acquisition of mining licence 5572L and for general corporate purposes. Fura also stated that should it not be able to complete the transactions, the net proceeds of the financing will be used by the Company for general corporate purposes, to develop its current mining assets and for future acquisitions.

Dev Shetty, President and Chief Executive Officer of Fura said: “We are very pleased to assist New Energy Minerals, one of our counterparties in the several Mozambican ruby acquisition projects that are currently underway, via an A$2,800,000 Loan Agreement. The drawdown rules of that Loan Agreement are limited to assisting New Energy in its financing arrangements with Arena and closing of our transaction with New Energy. As a result of this loan, the purchase consideration for the New Energy Mozambican assets has been significantly reduced. As such, this transaction constitutes a major win-win for both Fura and New Energy shareholders.”