TIDMBRD
RNS Number : 7145E
BlueRock Diamonds PLC
08 July 2019
BlueRock Diamonds PLC / AIM: BRD / Sector: Natural Resources
8 July 2019
BlueRock Diamonds PLC ('BlueRock' or the 'Company')
Q2 2019 Production Update
New Management Deliver Record Quarter
BlueRock Diamonds PLC, the AIM listed diamond producer, which
owns and operates the Kareevlei Diamond Mine ('Kareevlei') in the
Kimberley region of South Africa, is delighted to announce its Q2
2019 production update where record production has been
achieved.
Overview
-- Record production of 3,516 carats 4x that in Q2 2018 (875 carats)
-- Record processed tonnes of 78,759 tonnes, up 130% on Q2 2018 (32,247 tonnes)
-- Record grade of 4.46cpht (Q2 2018 2.45cpht)
-- Average price achieved of US$430/c on sales of 2,517 carats
(Q2 2018, 875 carats sold at US$305/c)
-- 24.9 carat stone sold for a record US$190,000 in June
-- Tender revenue US$1,082,000 (Q2 2018 US$267,000)
-- No time lost to accidents reflecting Board's commitment to health and safety
BlueRock Executive Chairman, Mike Houston, said, "I am very
pleased with the impact that our new CEO at Kareevlei and his team
have made. Whilst the management team is conscious that there are a
number of milestones to reach if we are to bring real value to our
shareholders, the improved grade and price per carat achieved in H1
2019 is a strong indication of the potential of the Kareevlei
resource. The immediate impact of the new team gives us confidence
in our ability to take production to the next level. Once we have
achieved our key objective of operating the Company profitably,
which we expect to happen in the second half of 2019, we will
explore how to increase production volumes further to the optimum
level which the resource can comfortably sustain. With all this in
mind, we remain on track to meet our guidance targets for 2019 and
2020.
Overview
The Board is delighted with the recent progress made at
Kareevlei. Since the new management team started in April 2019,
operational performance at Kareevlei has been transformed. Volumes
are running at almost double the average monthly rates for 2018,
leading to a consequent increase in the number of carats produced.
Smarter mining and the consequent lower dilution has also led to an
improved grade and the increased volumes have resulted in the
expected increase in the incidence of larger and higher grade
stones.
Production
Q2 Year to date
2019 2018 Inc% 2019 2018 Inc %
Tonnes milled 78,759 34,247 130 120,426 73,028 65
Grade (cpht) 4.46 2.45 82 4.10 3.34 23
Carats 3,516 875 302 4,936 2,438 102
May (29,200 tonnes) and June were record months with June
production exceeding 34,000 tonnes. This was achieved without the
benefit of the budgeted planned plant improvements and was largely
due to the new management team introducing stronger operating
disciplines, the extended working hours through the commencement of
24/7 365-day operations, as well as improved plant availability.
Accordingly, the Board is confident that the near term monthly
production target of 40,000 tonnes is achievable and continues to
expect that the Company will be operating profitably in the second
half of 2019.
Importantly, the grade from the KV1 kimberlite pipe continues to
improve in part from smarter mining reducing the dilution of pure
kimberlite and as the mining operations go deeper it is expected
that the dilution will reduce further.
Tender Results
Q2 Year to date
2019 2018 Var % 2019 2018 Var %
Carats 2,517 875 188 4,365 2,419 80
Price US$/c 430 305 41 405 340 19
Revenue US$ 1,082,133 267,274 305 1,768,275 821,812 115
There were 1,326 carats on hand at the end of June, which will
be placed in the July tender.
The increase in the carat sales for the quarter are largely a
reflection of the significantly increased production volumes
enhanced further by the increase in the average price per carat to
US$429.79. The Board is extremely encouraged to note the average
price per carat year to date is above US$400, up almost 20% on the
same period in 2018.
Kareevlei continues to deliver excellent quality diamonds,
particularly in the plus US$1,000 per carat range. There were three
notable stones in the 6-month period to 30 June and the latest 24.9
carat stone marked a step change in size and a further reflection
of the potential of the resource.
Development Plans
The Crusher Upgrade Project is progressing well. The new
crushing plant is planned to be fully operational by the end of
July.
Contractual arrangements with the new open cast mining
contractor, Teichmann Mining (South Africa) Private Limited
("Teichmann"), are being finalised. Teichmann has commenced
mobilisation to site and it is expected that they will be fully
operational by late July 2019.
Management continue to develop and refine its mining plan in
order to optimise mining across the five known kimberlite pipes at
Kareevlei in line with the Company's strategy to have a higher
level of flexibility in its mining operation. The Board is also
considering ways to increase monthly production to above the
current target of 40,000 tonnes a month.
Guidance
Guidance remains unchanged at the following levels:
2019 2020
Volume (tonnes) 280,000 - 335,000 380,000 - 430,000
Grade (cpht) 4.25 - 5.0 4.25 - 5.0
Carats 12,000 - 16,500 16,000 - 21,500
Value per carat (USD) 340 340
This guidance will be reviewed and updated if necessary when the
Q3 production results are announced.
Share Consolidation
The Board has proposed a 1 for 500 share consolidation in order
that the BlueRock shares can trade in a more normal price range.
This proposal is to be considered and voted upon at the
Shareholders' AGM meeting on 25 July 2019.
Shareholder conference call
BlueRock will be hosting a shareholder conference call on
Tuesday 9 July 2019, at 3.00pm (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 6891180# 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 mhouston@bluerockdiamonds.co.uk
Mike Houston dfacey@bluerockdiamonds.co.uk
David Facey, FD
SP Angel (NOMAD and Broker) Tel: +44 (0)20 3470 0470
Stuart Gledhill / Lindsay Mair/Caroline
Rowe
---------------------------------
St Brides Partners Ltd (Financial Tel: +44 (0)20 7236 1177
PR)
Melissa Hancock / Juliet Earl
---------------------------------
Notes to editors:
BlueRock Diamonds is an AIM-listed diamond producer which
operates the Kareevlei Diamond Mine near Kimberley in South Africa
which produces diamonds of exceptional quality and ranks in the top
ten in the world in terms of average value per carat. The Kareevlei
licence area covers 3,000 hectares and hosts five known
diamondiferous kimberlite pipes. As at 3 September 2018, it was
estimated that the remaining Inferred Mineral Resource from the
three kimberlite pipes (KV1, KV2 and KV3) represents a potential
inground value of circa US$124 million at a current average run of
mine diamond value of US$362/carat.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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