Richland reaps Capricorn redevelopment benefits

JOHANNESBURG (miningweekly.com) – With the redevelopment and production ramp-up at the Capricorn sapphire operation in Queensland, Australia, now at full speed, Aim-listed Richland Resources would spend the next year focusing on optimising operations, including sales, marketing and the restructuring of online sales, and improving revenue generation.

The gemstone producer and developer said on Tuesday that infrastructure improvements and modifications, which were ongoing, would enable a ramp-up to 800 000 ct a quarter in the second quarter of this year.

“The entire preproduction development process, including the refurbishing and commissioning of the processing plant, phase one exploration work, mine development and more than the required rehabilitation of historically disturbed areas, was achieved in around 12 months within a very strict budget,” the company highlighted in its financial results for the year ended December 31, 2015.

Owing to the stringent cost control, the company’s expenditure for 2015 reached $2.3-million, including all development, production and corporate costs, besides others.

Further, Richland achieved a scaled-up fourth-quarter sapphire output of 720 000 ct – three times the targeted 250 000 ct – to further test the mining, processing and sorting capacities of the operation and identify areas for modification and improvement.

The company would scale back production and tonnes processed in the first half of this year to implement improvements and undertake further infrastructure work.

Overall, 900 000 ct of sapphire had been delivered in 2015 during the start-up and ramp-up process, with some 74 000 t of sapphire-bearing alluvial gravels extracted and processed at an average grade of 12 ct/t.

Meanwhile, the company widened its net loss for the year by 57% to $2.2-million on the back of operating expenses incurred as the Capricorn project was pushed through development into production, in addition to Richland's corporate expenses.

The net loss from Richland’s discontinued operations for the year under review was $3.3-million.

On March 2, 2015, the company successfully disposed of the remaining Tanzanian operations and related companies to Sky Associates for $4.6-million.

The generated revenue for the year of $700 000 was 30% lower than the $1-million recorded in the prior year, partly owing to the rebranding that Richland undertook during the year to highlight its new direction and emphasis on mining excellence and the ethical supply of natural gemstone.

During 2015, 204 110 ct of sapphire were sold for $245 000, representing an average price of $1.20/ct for the combined sales.

The sales comprised 202 900 ct of lower-quality sapphires for an average price of $1.10/ct, and 1 200 ct of higher-grade material sold at an average price of $15.10/ct.

The online sales division achieved $460 000 in revenue for the year compared to $1-million in 2014.

Richland did not declare a dividend for the year.