Aim-listed BlueRock Diamonds recorded good progress on a number of fronts during the six months ended June 30, chairperson Mike Houston says, despite a challenging period and delays in the expansion project at its Kareevlei mine, in the Kimberley region of South Africa.
The company announced a significant increase to its mineral resource, is now on the verge of fully commissioning the transformational one-million-tonne-a-year expansion project, put in place supporting financial arrangements and delivered positive operational results, he notes.
“The market rebounded in early 2021, with excellent prices achieved throughout the period and there is a very positive outlook for the remainder of [this year].
“Excitingly, the discovery of several large stones further confirmed the potential of the Kareevlei operation and strengthened the balance sheet,” Houston says.
As not all of the company’s milestones were reached in the reporting period, the full positive impact of these have not been reflected in the company’s financial results for the period.
Despite this, Houston says the company is encouraged by the increase in first-half revenues to £2.8-million, which provides a stable platform for the continued development of Kareevlei.
For the period, there was a 34% year-on-year increase in tonnes processed to 221 000 t; a 33% increase in grade to 4.1 carats per hundred tonnes (cpht); a 79% increase in production to 8 949 ct; and a 40% increase in sales price to $436/ct.
BlueRock also achieved an overall increase in mineral resource, with a 49% increase in tonnes to about 10.4-million; a 4% increase in grade to 5 cpht; and a 53% increase in carats to 516 200.
At period end, the project to transform production levels from about 400 000 t/y to one-million tonnes a year was well advanced and despite the delays and the various cost increases, the company believes the extra time and cost will result in a more robust production plant capable of producing the targeted one-million tonnes a year.
A project management and plant build company was brought in to support management in both the plant expansion and mining development.
The crushing circuit was commissioned and brought into operation in the first quarter.
A specially designed screen was ordered for delivery in late September following significant test work after issues were identified with the primary screen.
New dates were set for the wet plant commissioning to September and for the overall plant to be fully operational in October.
In terms of financials, there was a 118% increase in revenue to £2.8-million and a 64% reduction in operating loss to £538 000.
BlueRock has reviewed its guidance for the year, which reflects the continued uncertainty over the speed of the ramp up once the new plant is fully operational.
Production has been revised from between 22 000 ct and 26 000 ct, to between 24 000 ct and 28 000 ct. Guidance for 2022 is for production of 40 000 ct to 43 000 ct.
Since period end, BlueRock says it has made great strides in completing its expansion project.
The crushing circuit has been operating well for several months but it was agreed that a new larger primary screen was necessary; this specially designed screen will be delivered and fitted in late September.
The new plant has two processing lines, and it was agreed that to minimise the disruption to production one line would be fully commissioned first; this line is currently being hot commissioned and will be fully operational in late September.
The second line will be hot commissioned after two pans are moved over from the old plant and brought into production by mid-October.
It is planned to then ramp up the whole plant to the targeted one-million-tonne-a-year production level in the second half of October.
The sales value of the company’s diamonds continues to be strong, it notes, citing the recently announced three large diamonds sold for $1.1-million in the August tender, which brought the overall tender result to a record $2.1-million.