Monthly Sales, Production Update & Review of 2017

RNS Number : 3576Y

BlueRock Diamonds PLC

05 December 2017

 

Note: References to "$" in this announcement refer to US dollars.

5 December 2017

BlueRock Diamonds PLC

("BlueRock" or the "Company" or "BRD")

Monthly Diamond Sales, Production Update and Review of 2017

BlueRock Diamonds plc, the AIM listed diamond mining company, which owns and operates the Kareevlei Diamond Mine in the Kimberley region of South Africa ("Kareevlei") announces the results of its November 2017 diamond sales tender and production.

Highlights

·     Total sales of $387,000 (October: $226,400)

·     Record 957.70 carats sold (October: 609.84 carats)

·     Increased average value per carat of $404.45 (October: $371.25)

·     Grade of 3.63 cpht (October: 2.64 cpht)

·     Exceeded monthly production volume target of 25,000 tonnes

Tender results

In November 2017, the Company sold a record 957.70 carats, a 56% increase over the previous month, and achieved its highest level of monthly sales of $387,059 at an average of $404.45 per carat.  The diamonds included in November's sales tender had a grade of 3.63 cpht. The largest diamond was 9.07 carats and the highest value diamond was 7.76 carats selling for $78,306 ($10,091 per carat).

The November tender is the last tender of 2017. 

Production

Production in November was 25,147 tonnes - meaning the Company surpassed its previously stated target volume of 25,000 tonnes per month.

Review of 2017

The Company intends to move to quarterly reporting of production and sales going into 2018, with the first update expected at the end of March 2018 in respect of the January, February and March tenders and production since November 2017.

Ahead of the reporting change, the Company has set out below, in summary, the monthly production and sales figures for 2017 highlighting the continued progress achieved throughout the year, following recommencement of production in March 2017.

Month (2017)	Production (1)	Sales (2)
	Volume (t)	Carats	Value (USD)	USD/carat	Cpht	Revenue per t(USD)
March	9,310	92	14,806	161	2.11	1.59
April	6,837	207	90,719	438	1.60	13.27
May	9,769	143	32,170	225	1.16	3.29
June	14,427	101	35,970	356	1.56	2.49
July	20,227	330	130,509	396	2.01	6.45
August	20,929	400	131,908	330	2.07	6.30
September	22,010	545	175,621	322	3.01	7.98
October	17,285	610	226,404	371	2.64	13.10
November	25,147	957	387,059	404	3.63	15.39
Total	145,938	3,385	1,225,166	362	-	-

(1)   Production numbers are based on a calendar month

(2)   Sales numbers run from the closing date of successive tenders which are usually in the third or fourth week of each month.  Carats per hundred tonnes relate to the diamonds placed in the tender, in all months all diamonds on hand were tendered and sold.

Production volumes have continued to increase throughout the year with the exception of April and October, which were impacted by excessive rain. It should be noted however that the Company has since implemented measures to reduce the impact of heavy rain in the future.

In November, the Company began processing the Level 2 kimberlite which resulted in a significant improvement to the grade achieved from 2.64 cpht in October to 3.63 cpht in November.

Average value per carat has consistently increased throughout the year as the Company continues to recover an increasing number of stones in excess of 3 carats which command higher prices per carat.  The average value per carat in 2017 was $362 compared with the last revenue estimate from ZStar, our Competent Person, of $232.  This reflects the positive impact that the improvements implemented at the end of last year have had and the encouraging progression of recoveries that K2 yields.  Kareevlei remains one of the top ten highest value per carat diamond mines in the world.

The average revenue per tonne processed, which the Board considers to be the most important indicator of operational profitability, has improved markedly during the year reaching $15.39 in November.  This is a direct result of the increase in grade combined with the increase in average value per carat. 

Development plans

BlueRock Diamonds' primary goal has always been to maximise the value of Kareevlei.  As part of its strategy, the Company intends to commence mining at K1 alongside K2 in the new year; K1 has an inferred grade of 6.3 cpht compared to that of K2 of 4.5 cpht.  Not only should this lead to an increase in overall grade, it will also give the Company greater flexibility in its production and likely lead to more consistent results.

The Company has recently blasted approximately 5,000 tonnes of kimberlite at K5. The limited historic drilling results show evidence that the coarseness of the diamonds in K5 should be higher than in K2 which would suggest an increase in value per carat.  BlueRock will seek to provide further evidence of this by processing kimberlite from K5 in the near future.

Adam Waugh, Chief Executive Officer of BlueRock Diamonds, commented: 

"The review of the year shows the great progress that has been made since we recommenced production in March 2017 following the upgrade to our plant that took place over the new year.  We continue to make modifications to the plant in order to operate more efficiently and at higher volumes. Our next step is to further progress Kareevlei, including commencement of production at K1 and processing the already blasted material at K5. 

"Additionally, we are continually assessing further opportunities in the region where we can apply our expertise to add value to shareholders. We are specifically targeting prospects which are not greenfield exploration projects and thus do not require a large exploration budget.

"I would like to thank our team for the hard work and dedication that has brought BlueRock to the position it is in today."

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.

For further information, please contact:

BlueRock Diamonds plc

Adam Waugh, CEO

[e-mail]

David Facey, FD

[e-mail]

SP Angel (NOMAD and Broker)

Stuart Gledhill / Lindsay Mair/Caroline Rowe

[phone]

Yellow Jersey (PR and IR)

Georgia Colkin / Joe Burgess / Katie Bairsto

[phone]

About BlueRock Diamonds plc (AIM: BRD)

BlueRock is a diamond mining company with activities in the Kimberley region of South Africa. BlueRock own a diamond processing plant and the mining right over the Kareevlei Tenements in South Africa.

 

END

 

 

DRLEAPALESNXFFF