TanzaniteOne Rebukes Gemfields Buyout Offer

A buy-out offer of TanzaniteOne by Gemfields Resources, was rebuked by TanzaniteOne’s board of directors.

TanzaniteOne acknowledged an “open letter from Gemfields Resources,” but strongly advised their shareholders to “take no action and asserts that the proposed offer undervalues TanzaniteOne’s current and future operating and financial performance,” according to a Sept. 25 statement by the miner and supplier of Tanzanite.

“Unlike Gemfields, TanzaniteOne is a profitable business generating income for its shareholders on a consistent basis,” the statement read. “The recently announced dividend reflects management’s ongoing confidence in the Company’s performance. The Board consistently monitors its cash position and cash flow generation and is confident that it has sufficient financial resources to pursue and fulfill its strategy to become the world’s largest producer and supplier of premium colored gemstones whilst delivering value to its shareholders.”

In a related matter, TanzaniteOne reported a record production of 1.8 million carats of tanzanite for the nine month period to September 2008. That’s up 57 percent from 1.16 million carats for the same time period in 2007.

“This significant increase in recovered production is the direct result of TanzaniteOne’s revised mining strategy, which began implementation in early 2007 and is focused on undertaking multi-face mining, selective stope mining and improved security at its operations in Tanzania, the company said in Oct. 1 statement.

Commenting on this strong progress, Zane Swanepoel, managing director, said: “The record 1.8 million carats we have achieved so far this year is a clear demonstration that our mining strategy is delivering results and maintaining grades, even as we move to higher tonnages with the introduction of stope mining. I am confident we will comfortably exceed the two million carat production target for the year and that we are well on our way to reaching our stated goal of 3.1 million carats by 2011.”

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