TIDMBRD
RNS Number : 8650T
BlueRock Diamonds PLC
06 July 2018
BlueRock Diamonds PLC / AIM: BRD / Sector: Natural Resources
6 July 2018
BlueRock Diamonds PLC ('BlueRock' or the 'Company')
Q2 2018 Production Update
BlueRock Diamonds PLC, the AIM listed diamond producer, which
owns and operates the Kareevlei Diamond Mine ('Kareevlei') in the
Kimberley region of South Africa, announces its Q2 2018 production
update and H2 2018 production guidance.
Overview
-- Good production recorded over Q2 2018 given approximately
five weeks of aggregate downtime during the period due to a now
rectified crusher fault and bad weather
o 34,247 tonnes processed (Q1 2018: 38,781 tonnes) from first
kimberlite pipe, KV2
o 875.31 carats sold (Q1 2018: 1,563) with average revenue per
carat at US$305.34 (Q1 2018: US$378) reinforcing the Company's
position as one of the top ten highest value per carat diamond
mines in the world
-- H1 2018 production up 81% year-on-year to 73,028 tonnes (H1 2017: 40,343 tonnes)
-- H2 2018 production guidance of between 150,000 and 175,000
tonnes which assumes no further major production halts
-- Q2 2018 revenue per tonne processed US$7.76 (Q1 2018: US$14.36)
-- Average grade mined of 2.45 cpht for Q2 2018 (Q1 2018: 3.8
cpht) with grades anticipated to improve as production proceeds
deeper
o Targeting FY 2018 average grade of 3.5 to 4.5 cpht (FY 2017:
2.45 cpht)
-- Commenced mining at second kimberlite pipe, KV1, which has an inferred grade of 6.3 cpht
o Anticipated to provide material contribution to production in
FY 2018
o Stripping progressing well with results from first production
expected in Q3 2018
-- Advancing plans to increase crushing capacity during Q3 2018
which will support the expected increased throughput during H2
2018
-- A shareholder conference call is being hosted by BlueRock on
Tuesday 10 July at 12.00pm BST (details below)
BlueRock CEO, Adam Waugh, said, "Thanks to our experienced team
on the ground, we have had a successful quarter, continuing to
produce exceptional quality diamonds from our Kareevlei project,
despite five weeks of downtime due to bad weather and a fault in
our crushing circuit; 34,247 tonnes were processed during the
quarter with year-on-year H1 2018 production up 81%. Having
commenced mining in June at our second kimberlite pipe, KV1, which
has an inferred grade of 6.3 cpht against KV2's inferred grade of
4.5 cpht, we hope to see both production and grades increase during
H2 2018. Additionally, to make up the lost tonnage from H1 due to
unanticipated downtime and to provide crushed stockpile for the wet
season in H1 2019, we are focused on increasing our crushing
capacity from the existing circuit to fully unlock the value in our
7,984,000 tonne Inferred Mineral Resource at the project, which has
a potential in-ground value of circa US$130 million (based on our
CPR estimate of 359,00 carats in the ground). I look forward to
reporting on the outcome of these initiatives later in the
year."
Key Performance Indicators
Quarter Tender
volume Carats cpht US$/carat
Volume(1) (2) (2) (2) (2)
Q1 2017 9,310 4,780 92 1.92 161
Q2 2017 31,033 27,106 451 1.66 352
Q3 2017 63,163 56,486 1,275 2.26 344
Q4 2017 49,641 49,666 1,567 3.16 391
FY 2017 153,147 138,038 3,385 2.45 362
Q1 2018 38,781 41,115 1,563 3.80 378
Q2 2018 34,247 36,942 875 2.45 305
Notes
1) Based on calendar quarters.
2) Based on the period between tenders which usually take place
in the third or fourth week of each month. There is no tender in
December. The total carats produced in FY 2017 was 3,728.
Tender Results
A total of 875 carats were sold in Q2 2018 (Q1 2018: 1,563
carats). This was down on the previous quarter due to a fault which
has now been rectified, which led to processing being stopped for
around 10 days during June. A total of five weeks' worth of
production was lost during Q2 2018 due to this fault combined with
bad weather. The average price per carat remained high at US$305
(Q1 2018: US$378).
Production & Recovery
34,247 tonnes were processed in Q2 2018 (Q1 2018: 38,781 tonnes)
to bring total H1 2018 production to 73,028 tonnes, an 81% increase
year-on-year (H1 2017: 40,343 tonnes). The Company announces H2
2018 production guidance of between 150,000 and 175,000 tonnes.
The recovered grade of 2.45 cpht (Q1 2018: 3.8 cpht) was at a
lower level as a low-grade block of shale was mined during the
period, with grades picking up at the end of the quarter. As
previously announced, whilst the mine is developed at the higher
levels, grades from KV2 are expected to fall slightly until mining
is consistently below 20m when grades should be consistently around
the pit averages of 4.5 cpht.
Mining commenced in June 2018 at the Company's second kimberlite
pipe, KV1, which has an inferred grade of 6.3cpht, and is
anticipated to provide material contribution in FY 2018.
Revenue per processed tonne
Revenue per processed tonne for the second quarter was US$7.76
(Q1 2018: US$14.36), based on tender periods. The reduction in
revenue per tonne is a function of mining at lower grades than Q1
and is expected to increase alongside grades during the remainder
of 2018.
Shareholder conference call
BlueRock will be hosting a shareholder conference call on
Tuesday 10 July 2018, at 12.00pm (BST) in line with its commitment
to maintaining positive engagement with its shareholders.
Shareholders are invited to submit questions via email in
advance of the call, which management will aim to respond to during
the call. Questions should be sent to St Brides Partners at
shareholderenquiries@stbridespartners.co.uk, which will be
compiling the questions on behalf of the Company.
To participate in the conference call, please dial 0808 109
0701, or +44 (0) 20 3003 2701 if you are calling from outside of
the UK, and enter the participant pin 3301418# when prompted to do
so. Please note that all lines will be muted except for BlueRock's
management team.
The management team will strive to answer as many questions as
possible during the call, however it should be noted that no
material new information regarding the Company will be provided
during the call. The Company plans to make a recording of the call
available on its website.
If you have any problems accessing the call, please contact St
Brides Partners Ltd on shareholderenquiries@stbridespartners.co.uk
or call +44 (0) 20 7236 1177.
Market Abuse Regulation (MAR) Disclosure - Certain information
contained in this announcement would have been deemed inside
information for the purposes of Article 7 of Regulation (EU) No
596/2014 until the release of this announcement.
**ENDS**
For further information, please visit BRD's website
www.bluerockdiamonds.co.uk or contact:
BlueRock Diamonds PLC awaugh@bluerockdiamonds.co.uk
Adam Waugh, CEO dfacey@bluerockdiamonds.co.uk
David Facey, FD
------------------------------ --------------------------------
SP Angel (NOMAD and Joint Tel: +44 (0)20 3470 0470
Broker)
Stuart Gledhill / Lindsay
Mair/Caroline Rowe
------------------------------ --------------------------------
SVS Securities (Joint Broker) Tel: +44 (0) 20 3700 0100
Tom Curran / Ben Tadd
------------------------------ --------------------------------
St Brides Partners Ltd Tel: +44 (0)20 7236 1177
(Financial PR)
Lottie Wadham / Juliet
Earl
------------------------------ --------------------------------
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END
DRLKQLBBVDFXBBB
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