LONDON (Alliance News) - BlueRock Diamonds PLC Friday said operations at the Kareevlei mine in South Africa have restarted following a five week suspension and said production will begin from the start of next week and move toward utilising all the capacity of the on site plant.
BlueRock shares were trading up 9.5% to 9.85 pence per share on Friday morning.
The Kareevlei mine was undergoing trial operations when BlueRock identified issues with the efficiency of the plant in the first quarter of this year, prompting the miner to suspend operations in June so it could "more easily assess the shortcomings" of the plant configuration.
Unsatisfactory grades, poor recovery rates and a number of other issues were found to be present within the plant and the Department of Mineral Resources intervened in July by highlighting a number of issues and areas of work that needed to be addressed before operations could restart.
The timing of the suspension was unfortunate as the company had just managed to get processing levels in excess of 20,000 tonnes of ore per month, the capacity of the plant, after struggling to get the plant to run at optimal rates beforehand.
Production is now expected to restart on Monday and BlueRock is aiming to get the rate over the 20,000 tonne per month target and, notably, mining operation continued throughout the suspension to leave the miner with a substantial stockpile to process going forward.
"After a frustrating few weeks I am delighted that we are now back into production. Initially we will be processing 30,000 to 50,000 tonnes of Kimberlite lying in stockpiles close to our plant. These are stockpiles of oversize rocks that we have accumulated over the last two years from all levels of the pit," said Chief Executive Adam Waugh.
"We have been preparing these stockpiles for processing over the last two months and will closely monitor the quality and quantity of diamonds in this previously unprocessed kimberlite. Thereafter we will process kimberlite directly from the mine starting with the next blast which is scheduled for late September," he added.
The company was also hit by some bottlenecks within the operation, mainly due to the dense media separator which utilises the difference in material density to isolate various minerals that was identified as the "most significant" bottleneck at the time.
To address the limitations, BlueRock began considering whether to purchase a plant owned by a company named Diacar, which was providing earth moving surfaces to BlueRock until it terminated the agreement after authorities said the trackless mobile machinery, which is logistical equipment that is unmanned and was being provided by Diacar, was seen as one the problems with the project that needed to be rectified.
Not only would tat help operationally, but it was expected to help retain all of the diamond revenues from the operation rather than losing some to a third party processor, for example.
"We have a number of options open to us regarding increasing plant capacity. Buying Diacar's plant remains one option as well as expanding our own. Johan Milho, our new mine manager, and the operating team are evaluating all options with the objective being to process significantly increased tonnages than before at a reduced US dollar per tonne cost," said BlueRock on Friday.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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