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Africa|Diamonds|Engineering|Mining|OPENCAST|Pipe|Pipe
Africa|Diamonds|Engineering|Mining|OPENCAST|Pipe|Pipe
africa|diamonds|engineering|mining|opencast|pipe-company|pipe

BlueRock expects to be profitable in second half

2nd September 2019

By: Simone Liedtke

Creamer Media Social Media Editor & Senior Writer

     

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Aim-listed BlueRock Diamonds produced more than 50% of its overall output for the six months ended June 30 in May and June.

Production for the two months reached 63 200 t.

The increase in production was achieved without the benefit of the planned plant improvements, the diamond miner said on Monday, adding that this was largely owing to the new management team having introduced stronger operating disciplines, as well as extended working hours and improved plant availability.

The remainder of the period, comprising the months of January through to April, which are traditionally low production months, still represented a significant improvement compared with the same period in 2018, which had an average for the whole year of about 15 000 t a month.

Accordingly, BlueRock, which owns and operates the Kareevlei diamond mine in South Africa, said its board remained confident that the near-term monthly production target of 40 000 t was achievable, and continued to expect the company to be operating profitably for the second half of this year.

The 40 000 t a month production target falls in line with BlueRock’s operational plan for the next five years, through which it currently targets production at about 400 000 t/y, operating at 40 000 t a month in the non-rainy season.

BlueRock also noted that the grade from the KV1 kimberlite pipe continues to improve, in part from smarter mining reducing the dilution of pure kimberlite. The grade recorded for the interim period is “a pleasing” 23% increase over the same period in 2018.

Meanwhile, the increase in the carat sales for the first six months of the year were largely a reflection of the significantly increased production volumes enhanced further by the increase in the average price per carat to $405, up almost 20% on the same period in 2018, BlueRock said.
 
Kareevlei continues to deliver excellent quality diamonds, the diamond miner averred, particularly in the plus $1 000/ct range.

Three notable diamonds were sold in the six-month period, the largest of which – a 24.9 ct diamond – marked a step change in size and a further reflection of the potential of the resource.

The five diamonds sold at tender during the period garnered about $501 000 in total, for a total of just over 70 ct.

The 24.9 ct stone sold for $190 000, while the second largest stone of 16.28 ct sold for about $79 000 during the period.

Post period, however, there were 1 326 ct on hand at the end of June, which were sold in the July tender.

Considering the weakening market, BlueRock said its board would continue to monitor the results of the tenders, which currently take place in Kimberley, South Africa.

“Work is being done to explore whether higher prices can be achieved either through marketing part of our output as cut diamonds or by selling outside South Africa, although there are a number of regulatory and practical hurdles to overcome,” the company said.
 
FINANCIALS
In the first half of this year, BlueRock made a loss of £381 027 on a turnover of £1.3-million compared with a loss of £1.2-million on turnover of £555 842 in the first half of 2018.

Cash and cash equivalents, including restricted cash, as at June 30 was just over £1-million.
 
In February, the company raised £575 000 before expenses to fund the development of KV1 and KV2 and to fund minor improvements to the plant.
 
In May, the company raised £982 000 before expenses in order to implement the new mining and production plans of the new management team.

As part of the fundraising, civil engineering and mining group Teichmann invested £310 000 and now own about 19% of the share capital of BlueRock.

One of Teichmann’s specialities is opencast mining and this is expected to significantly derisk BlueRock’s mining activities and allow BlueRock to meet its production targets in a cost-effective manner.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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