TIDMRLD
RNS Number : 4120V
Richland Resources Ltd
30 January 2017
30 January 2017
Richland Resources Ltd
("Richland" or the "Company")
Quarterly Operational and Sales Update
Richland (AIM:RLD), the gemstones producer and developer, today
announces its quarterly operational and sales update for Q4 2016.
All figures are unaudited.
Highlights
-- 839,898 carats produced during Q4 2016 as part of the
production and ramp-up process for the Capricorn Sapphire mine held
by Capricorn Sapphire Pty Ltd ("Capricorn" or "Capricorn
Sapphire"), the Company's wholly owned subsidiary
o Q4 2016 production target of 800,000 carats achieved
o Average grade of approximately 16 carats per tonne across
51,376 tonnes of mined and processed alluvial material
-- US$535,000 total revenue achieved from the sale of
approximately 857,000 carats of predominantly rough and untreated
sapphire and corundum at an average price of US$0.62 per carat
o Sales include a combination of blue and fancy coloured rough
sapphires, as well as corundum
-- Estimated total operating cost for the Capricorn Sapphire
project reduced to approximately US$660,000 for Q4 2016
o Approximately 80% of operational costs covered by revenue
during the quarter
-- Total operating cost per carat of US$0.79 / carat achieved
-- During the quarter, the following beneficiation relationships have been entered into:
o Securing of the preferential use of a specialist sapphire heat
treatment facility for Capricorn's product, located in Chanthaburi,
Thailand on a fixed price per carat contract basis
o Preferential use of a Bangkok based cutting and polishing
facility, also on fixed price per carat terms
-- Successful equity fundraising of GBP1.0 million gross at 0.75
pence per new Common Share completed to enable:
o Final stage of production ramp-up; and
o Implementation of beneficiation and cutting strategy
-- Conversion of unsecured loan facility into equity
-- Conversion of certain outstanding Directors' and management's
fees and salaries at 1.74 pence per new Common Share
Post Period End
-- Whilst maintaining current production levels, work has
commenced on the final stage of the production ramp-up which is
aimed at increasing production to 1.2 million carats per quarter by
the end of Q2 2017
-- Commencement of beneficiation programme, with sales of
treated, cut and polished material to commence in Q1 2017 in
addition to the ongoing sale of rough, untreated material
Commenting on the quarterly update, Bernard Olivier, Chief
Executive Officer, said:
"I am pleased to report that operations at the Capricorn
Sapphire mine in Australia are going from strength to strength and
our new sales strategy, only adopted in Q4 last year, is already
realising tangible benefit. The first quarter of 2017 will see the
first polished and cut Australian sapphires from our operations
being made available to wholesalers. I look forward to updating
shareholders in due course as we ramp-up production and develop our
beneficiation programme. Our clear focus for 2017 is to develop
sales, aggressively manage costs and develop margins to achieve
first profit from our coloured gemstone mining operations."
For more information please contact:
Bernard Olivier Edward Nealon Mike Allardice
Chief Executive Chairman Group Company Secretary
Officer +61 409 969 955 +852 91 864 854
+61 4089 48182
Laurence Read Nominated Adviser Broker
Corporate Development Strand Hanson Shore Capital Stockbrokers
and Communications Limited Limited
Officer James Harris Jerry Keen (corporate
+44 (0) 20 3289 Matthew Chandler broking)
9923 James Dance Toby Gibbs / Mark
+44 (0) 20 7409 Percy (corporate
3494 finance)
+44 (0) 20 7408
4090
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 ("MAR").
Further information is available on the Company's website:
www.richlandresourcesltd.com. Neither the contents of the Company's
website nor the contents of any website accessible from hyperlinks
on the Company's website (or any other website) is incorporated
into, or forms part of, this announcement.
The online retail division, www.richlandgemstones.com, was
re-launched in H1 2016 and currently features a growing range of
unique exotic coloured sapphires directly from the Capricorn mining
operation as well as tanzanite sourced through the Company's
ongoing connections and industry relationships following the
historic sale of its tanzanite mine.
Q4 2016 Operational and Sales Update
Capricorn Sapphire Production and Ramp-up
The fourth quarter of 2016 saw a continuation of the positive
results achieved from the Company's previously announced
comprehensive optimisation programme implemented across all
components of the Capricorn Sapphire mine project. During Q4 2016,
the production target of 800,000 carats was once again achieved
with a total of 839,898 carats of sapphire and corundum produced. A
total of 51,376 tonnes of sapphire-bearing alluvial gravels were
extracted and processed at an average grade of approximately 16
carats per tonne during the quarter. The estimated total quarterly
operating cost for the Capricorn Sapphire project was reduced to
approximately US$660,000 for Q4 2016 (approximately US$220,000 per
month). A total average operating cost of US$0.79 per carat was
achieved for the quarter.
Ongoing rehabilitation of areas disturbed by the mining activity
continues as part of our operations. Additional voluntary
rehabilitation work has also been carried out on historically
disturbed areas as part of the Company's commitment to responsible
and ethical mining.
Sales, Marketing and Beneficiation
Revenue of US$535,000 was achieved from the combined sale of
approximately 857,000 carats of predominantly rough and untreated
sapphire and corundum at an average price of US$0.62 per carat.
This revenue was achieved from the sale of a combination of blue
and fancy coloured rough sapphires and corundum as well as the test
sales of treated, cut and polished material. Revenue generated
during the quarter covered approximately 80 per cent. of the
quarter's operational costs.
As announced on 30 November 2016, during Q4 Capricorn Sapphire
has entered into two significant downstream beneficiation
agreements:
-- Securing of the preferential use of a specialist sapphire
heat treatment facility for Capricorn Sapphire's product, located
in Chanthaburi, Thailand on a fixed price per carat contracted
basis
-- Preferential use of Bangkok-based cutting and polishing
facilities also on fixed price per carat commercial terms
Thailand is the world's leader in treating sapphires, and
through the above-mentioned beneficiation agreements, stones from
Capricorn Sapphire are now granted full access to specialist
sapphire beneficiation services and treatments in Thailand. As the
beneficiation strategy is further developed, the Company will be
able to provide larger quantities of cut and polished blue and
fancy coloured sapphires with full provenance and authenticity,
produced to the highest ethical standards in Australia, from one of
the world's largest sapphire mines.
Corporate
On 13 December 2016, Richland successfully concluded an equity
fundraising of GBP1.0 million gross at 0.75 pence per new Common
Share to enable:
o final stage of production ramp-up; and
o implementation of beneficiation and cutting strategy.
The Company also converted the outstanding unsecured loan
facility into equity as part of the equity placement, also at 0.75
pence per new Common Share.
On 13 December 2016, the Company also announced the conversion
of certain outstanding fees and salaries due to directors and
management at 1.74 pence per new Common Share, representing an
approximate 55 per cent. premium to the Company's closing
mid-market share price on 12 December 2016.
Post Period End
Whilst maintaining current production levels, work has commenced
on the final stage of the production ramp-up at the Capricorn
Sapphire mine, which is aimed at increasing production to 1.2
million carats per quarter by the end of Q2 2017.
- ENDS -
This information is provided by RNS
The company news service from the London Stock Exchange
END
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