TIDMTNZ
RNS Number : 6477R
Tanzanite One Limited
05 May 2009
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5 May 2009
TanzaniteOne Limited
Operational Update and Improved Sight Sales of US$ 4.64 million Sales
TanzaniteOne Limited ("TanzaniteOne" or "the Company") (AIM: TNZ), the premium
coloured gemstones producer and developer is pleased to provide an operational
update and advise shareholders on recent sales revenues.
Highlights
* US$ 4.64 million tanzanite sales in the four months up to until 30th April 2009.
* US$ 2.85 million in sales from the first sight of the year in April
* US$1.79 million of tanzanite sales to date in 2009, sold outside of formal
sights
* Seven sight parcels sold at the April 2009 sight compared to one parcel sold at
the December 2008 sight.
* Bernard Olivier takes on executive position as Head of Development
* 520,000 carats mined to end April 2009 in line with 2007 figures prior to
planned production ramp-up through stope mining strategy
* 3 million carat production ramp up plans postponed until 2012
* Efficiency and margin enhancement programme continues to provide positive
results
TanzaniteOne Limited today announces an operational update governing production
information and recent sales revenues.
Commenting on the operational update, Zane Swanepoel, Managing Director, said:
"The current economic climate is difficult for any company involved with
gemstones or luxury goods, but TanzaniteOne has the expertise and technology to
continue to successfully manage its operations. We have undergone a full
operational review to ensure that we are operating the mine as efficiently as
possible. I am encouraged by the recent pick-up in both the sales volumes and
prices for tanzanite and hope that the difficult months towards the end of 2008
are now behind us. I am also pleased to welcome Bernard to the Executive Team in
his role as Head of Development. Bernard will focus on the Company's sales,
growth and investor strategy"
Sales
The first 2009 sight was successfully conducted in April 2009 in Johannesburg.
All seven parcels comprising a total 15,126 carats of high quality material were
sold, resulting in total sales revenue of US$2.85 million. This represents a
significant improvement from the previous December 2008 sight. The Company
anticipates further improvements in sales and pricing during through the
remainder of 2009.
Encouragingly, favourable sales of US$1.79 million were also achieved outside of
the usual sight process. The Company is actively exploring complimentary sales
avenues to the traditional sight system, affording the opportunity to move
particular stone types at particular points in the market cycle.
The next sight is to be held in either June or July in Dubai. With the Dubai
office soon open, it is envisaged that there will be increased participation and
demand at sights and sales outside of sights. Until now sights have only been
held in Johannesburg. Dubai is more attractive because of its central global
position, which allows TanzaniteOne to more easily service its existing markets
and also access other new markets.
Management
Dr Bernard Olivier has been appointed with immediate effect to the new position
of executive position of Head of Development. Dr Olivier is one of the world's
leading experts on coloured Gemstones. He rejoined TanzaniteOne last year as a
non-executive board member to work alongside the Managing Director Zane
Swanepoel. Mr Swanepoel will continue to oversee the optimisation and
development programme at the tanzanite mine. Dr Olivier will focus on developing
the commercial aspects of the business, notably the Company's sales, growth and
investor strategy.
Production
During the first quarter of 2009, production totalled 390,000 carats and 520,000
until end April 2009. The Company is on track to achieve a revised target of 1.7
million carats for the year. This revised target is in line with the pre-stoping
production figures in 2007. Given the downturn in demand experienced for
tanzanite, along with other gemstones and luxury goods, it has been decided to
defer production ramp-up to 3 million carats per annum to 2012 to ensure that
the Company's production is in line with the reduced levels of demand being
experienced and consequently conserve cash.
TanzaniteOne benefits from advanced coloured gemstone extraction operations. In
particular through the use of the state-of-the-art optical sorter and
technologically advanced processing and sorting methods. This is enabling
operations to maintain positive margins despite the downturn in tanzanite
prices. Currently, only selective areas are being mined for tanzanite and the
Company has taken steps to scale back the workforce whilst reviewing all areas
of expenditure.
Personnel numbers are being reduced across the Group and as part of the process,
numbers of Arusha based expatriate personnel have been reduced by a third.
Negotiations with Tanzanian trade unions are currently underway to reduce
Tanzanian personnel by 28%.
Reduction in personnel numbers, plus other cost cutting measures, notably
reduction in tonnes mined, has resulted in a 40% decrease in operating costs
over the last quarter.
Outlook
Demand and prices for gemstones have declined significantly, however the
improvements in volumes and revenue experienced at the April 2009 sight compared
to the December 2008 sight gives the Directors optimism for an improved outlook.
Recognising that sales prices and demand may remain depressed, a revised
strategy to defer the production expansion and manage costs down is delivering
results and mining operations are currently delivering positive margins.
END
For more information, please visit www.tanzaniteone.com or contact:
+---------------------------------------------+----------------------------------+
| Willi Boehm, Company Secretary | Alex Buck, Public Relations |
+---------------------------------------------+----------------------------------+
| +61 893675211 | +44 (0)7932740452 |
+---------------------------------------------+----------------------------------+
| |
+--------------------------------------------------------------------------------+
| Bernard Olivier, Executive Director | Laurence Read, Public Relations |
+---------------------------------------------+----------------------------------+
| +61 408948182 | +44 (0)7979955923 |
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| | |
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| | |
+---------------------------------------------+----------------------------------+
| Nominated Advisor and Joint Broker | Joint Broker |
| Evolution Securities | Ambrian Partners |
+---------------------------------------------+----------------------------------+
| Simon Edwards or Neil Elliot | Richard Chase |
+---------------------------------------------+----------------------------------+
| +44 (0)2070714300 | +44 (0)2076344700 |
+---------------------------------------------+----------------------------------+
| | |
+---------------------------------------------+----------------------------------+
| Financial Advisor | Nick Bias, Investor Relations |
+---------------------------------------------+----------------------------------+
| Lazard & Co | +44 (0)7887920530 |
+---------------------------------------------+----------------------------------+
| Spiro Youakim or Chris Seherr-Thoss | |
+---------------------------------------------+----------------------------------+
| +44 (0)2071872000 | |
+---------------------------------------------+----------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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