Richland’s Queensland sapphire mine approaches profitability

JOHANNESBURG (miningweekly.com) – The ramp-up of the Capricorn sapphire mine to 1.2-million carats a quarter has lifted Richland Resources’ half-year performance, with the Aim-listed company on Monday reporting a significant revenue increase.

The mine, in Queensland, delivered 1.96-million carats in the first six months of the year, comprising 700 000 ct in the first quarter and 1.26-million carats in the second quarter.

The sale of sapphires brought in $1.03-million in the first six months of the year, $689 000 of which was made in the second quarter. The company achieved significantly higher prices in the second quarter, with 163 000 ct of mid- to higher quality sapphires sold at $3.89/ct in the June quarter, compared with 177 000 ct sold at $1.73/ct in the March quarter.

Richland sold 231 000 ct of lower quality rough, untreated corundum and sapphire at an average of 23c/ct in the second quarter and 691 000 ct at 5c/ct in the first quarter.

Total revenue increased by 66% to $1.18-million. The income includes an export market development grant of $38 000 and fuel rebates of $60 000.

Richland narrowed its operating loss to $96 000, from $1.46-million in the first half of 2016.

“Our second-quarter revenue covered over 95% of our second-quarter production and operating costs for the Capricorn sapphire project as we implemented the final ramp-up stage,” said CEO Bernard Olivier.

He added that Capricorn was approaching operational profitability.

Meanwhile, Richland on Monday also published a maiden Joint Ore Reserve Committee-compliant resource for Capricorn’s exploration licence EPM 25973. The resource comprises five-million loose cubic meters (lcm) of sapphire-bearing gravel at an estimated grade of 3.5 g/lcm.

The resource estimation equates to about 87.5-million carats in the ground.