Aim-listed BlueRock Diamonds has discovered a 21.56 ct diamond from its Kareevlei diamond mine, in the Kimberley region of South Africa.

“I am delighted to inform shareholders that we have recently recovered a 21.56 ct [diamond] of exceptional quality and what we believe will be the highest-value [diamond] recovered to date.

“In addition, a high-value 9 ct [diamond] was also recovered. The market remains buoyant with our average sales price for the year to July being in excess of $430/ct,” executive chairperson Mike Houston acclaims.

The 21.56 ct diamond, which will be sold in the August tender, is a high-quality, D-coloured round diamond with high-value recovery options and its value is likely to significantly exceed the company’s previous record of $236 000 obtained from the sale of a 20.7 ct diamond in October 2019.

PROJECT UPDATE

The company’s expansion project at Kareevlei is nearing completion, with the first of the two new wet lines to be fully commissioned by end August and fully operational in September.

This line, once fully operational, will allow management to switch off the old plant wet line with immediate cost savings associated with double handling ore and power costs.

The second line will be fully commissioned during September and both new wet lines should be fully operational by the end of September. 

During the commissioning and build-up to full capacity of the crushing (dry circuit), it was discovered that the primary screen had structural and design defects that precluded it from handling the required volume of material.

Initially, it was thought that this screen could be modified to handle the capacity but after further test work and a better understanding of the inherent structural issues, it was agreed that a new screen was required. This new screen is expected to be delivered by the end of September allowing us to ramp up to full production by the second half of October.

Houston says the company’s expansion project is nearing completion and all aspects of operation from the mine to the market are gearing up for a step-up in production in the next few months.

The ramp up to full production will now be accomplished in October as a result of some minor delays on the project.

“South Africa continues to struggle with the Covid-19 pandemic and more recently with the unfortunate [civil unrest] disturbances which resulted in many companies temporarily ceasing operations.

“Our management have successfully kept operations running despite a step-up in Covid cases; however, we have been impacted by equipment delivery delays because of the riots,” Houston says.

OPERATIONAL UPDATE

BlueRock recently announced its second-quarter production results which showed a 48% and 117% year-on-year increase in tonnes processed and carats produced, respectively.

The processing operation continues to run successfully with the new crushing circuit providing ore to the old plant wet line as the operation transitions fully to the new plant in August and September.

The focus in the mining operation is the preparedness for the increase in production and the wet season. The company has moved a record tonnage of waste (development) and ore tonnes this year as part of this objective. The target is to have sustainable in and out of pit inventories. 

The grade for the year to date of 4.1 carats per hundred tonnes is in line with budget and market expectations.

BlueRock will continue to keep the old wet line operational until the new wet line is successfully running at the targeted tonnage, as this ensures ongoing carat production in the transitional period. 

OUTLOOK

The recent disturbances in South Africa have contributed to the longer-than-expected delivery date of the screen and some other equipment needed for the wet plant.

The ramp up to full production is a month later than expected and this has had an impact on the company’s full-year production guidance.

BlueRock has lowered the guidance for tonnes produced for the full-year to between 600 000 t and 630 000 t, compared with the previously expected 750 000 t to 850 000 t. The guidance on carat production has also been revised downward to between 24 000 ct and 28 000 ct, compared with the previous guidance of 30 000 ct to 39 000 ct.

BlueRock’s  revenue estimate for the year remains at about $11-million, owing to the very strong pricing environment.