JOHANNESBURG (miningweekly.com) – Gemstones producer and developer Richland Resources has, through its wholly-owned subsidiary TanzaniteOne Mining, increased its tanzanite production to 1.34-million carats during the first quarter of this year, up from 788 198 ct produced during the same period last year.

During the quarter, 6 693 t of material was processed with recovery at an average grade of 199 ct/t.

Further, an estimated $1.8-million of revenue was realised during the quarter by the TanzaniteOne and Tanzania State Mining Corporation (Stamico) 50:50 joint venture in the Merelani tanzanite mine.

However, Richland stated that the quality of the tanzanite produced at the mine remained low owing to the continued lack of high-quality production areas available to be mined by TanzaniteOne as a direct result of the illegal mining activities on the Block C licence area.

“During the quarter Richland and TanzaniteOne continued its appeal to the Tanzanian government to address the illegal mining within the Block C licence area,” Richland said.

"Richland is working with [TanzaniteOne] to alleviate significant costs at the Merelani tanzanite mine as illegal mining activities are still severely hampering operations and financial performance. As previously stated, no further capital will be provided to the TanzaniteOne/Stamico JV by Richland while this situation is left to persist by the authorities.

“We shall wait to see if the Tanzania government completes its programme of clearing illegal mining from our licence area and, thus, provide a safe working environment for our workers. We are extremely disappointed by the lack of support received to date in this regard, especially after signing the binding agreement with Stamico in December 2013,” Richland CEO Bernard Olivier commented.

Meanwhile, Richland pointed out that it had also achieved about $770 000 of additional revenues during the quarter through retail and beneficiation operations.

Further, earlier this year Richland had raised about £2.76-million through the issue of 81 060 944 new common shares. This fundraising exceeded the company’s minimum target of £2.1-million.

The company had also, during the quarter, announced a memorandum of understanding (MoU) with ASX-quoted Kibaran to consolidate and mine both companies' graphite deposits in the Merelani region of Tanzania.

Richland had now signed a three-month extension to the MoU until August 5. Kibaran had largely completed its due diligence and the parties were now working together to finalise the terms of the binding agreement.

Richland was also currently undertaking a group-wide strategic review of its operations, which would include a review of all costs, revenue optimisation and how best to use the funds available for investment in gemstone projects.

The company would make announcements on this process in due course.