Gem Resources has signed a conditional agreement to sell its 74% controlling interest in the Gravelotte Emerald Mine, located in Limpopo Province, South Africa.

The transaction, agreed with Global Gem Mines, could be worth up to $2.4m through a combination of fixed and deferred cash payments as well as royalty income.

The sale is arranged through Gem Venus Holdings, the entity that holds Gem Resources’ stake in the mine.

This agreement specifies a fixed purchase price of $1.7m for the interest in Gravelotte.

According to the transaction’s terms, the purchaser has put $400,000 into escrow upon signing, with a further $250,000 payable to Gem Resources within 180 days, subject to certain conditions.

On completion of the deal, Gem Resources will receive an additional $650,000, including the release of the escrowed sum, for a total of $1.3m by completion.

Two further deferred payments of $200,000 each are scheduled before the first and second anniversaries of completion.

In addition to these payments, Gem Resources will be entitled to a 5% gross revenue royalty on rough emeralds mined and sold from the Gravelotte site for up to two years after completion, capped at $700,000.

The arrangement is subject to reduction if royalty amounts are accrued before completion under interim operational contracts.

Completion of the disposal remains contingent on several conditions, including regulatory approval.

Until completion, Global Gem Mines will cover care and maintenance costs at the mine.

Gem Resources has stated the disposal is part of its broader strategy to focus on operating and revenue-generating natural resource assets, with increased emphasis on gold processing.

The company recently announced the conditional acquisition of the El Yarumo gold processing operation in Colombia.

Following the transaction, Gem Resources will retain a 65% stake in the Curlew Emerald Mine in Western Australia, with an option to acquire the remainder, and an exploration licence in north-east Zambia focused on graphite, coltan, lithium and rare earth elements.

Gem Resources executive chairman Louis Ching said: “This transaction represents an important milestone for GEMR and forms part of a broader strategy that the Board has been implementing to reposition the company towards operating, revenue-generating natural resources businesses, with an increasing focus on gold processing operations.”