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Q4 Operational and Sales Update

11 Feb 2013 07:00

RNS Number : 4915X
Richland Resources Ltd
11 February 2013
 



 

Richland Resources Limited

("Richland" or "the Company") (AIM:RLD)

Q4 Operational and Sales Update

 

Richland Resources Ltd, the AIM quoted gemstone producer and developer of associated minerals, today announces an operational, sales and marketing update. All figures are unaudited.

 

Operational Highlights

·; Total tanzanite production of 795,162 carats for Q4 2012 (554,060 carats for Q4 2011)

·; Average grade of 102 carats per tonne achieved (58 carats for Q4 2011)

·; US$3.9 million in sales achieved in Q4 2012 (US$5.9 million in Q4 2011)

o Sales adversely impacted by theft of gemstones during quarter

·; Commencement of evaluation of proposed graphite production restart on existing Tanzanite licence area

o Significant non-JORC compliant resource and reserve

o Discussions with potential commercial partners commenced

·; Tsavorite bulk-sampling recommenced with the collection and processing of 370 loose cubic meters ("lcm") of material

 

 

Corporate Highlights

·; December 2012 sorting house break-in

o cost of stones stolen estimated at US$1.46m and is subject of insurance claim

·; Ongoing negotiations with the Government of the United Republic of Tanzania ("Government") regarding a potential shareholding by the Government

 

Production and sales

In the fourth quarter of 2012, the Company achieved tanzanite production totalling 795,162 carats from the processing of 7,812 tonnes of material at an average grade of 102 carats per tonne for the quarter. The Company achieved an estimated US$3.9 million in revenue for the fourth quarter of 2012. This was lower than expected due to the theft of US$1.46m of tanzanite in the period (as detailed below) which would otherwise have been sold during the period.

 

Sorting house break-in

Approximately 89,066 grams of material with an estimated total value of approximately US$1.46m was stolen during a break-in on Sunday 2 December 2012. Both the insurance claim investigation and police investigation are progressing well and the Company believes that it will be in a position to update to market very shortly on the outcome of these investigations.

 

Tsavorite project

During the fourth quarter the Company recommenced the bulk sampling of the tsavorite project. During the quarter approximately 370 lcb of material (approximately 666 tonnes) were collected and processed from six different sites within the deposit area. The Company aims to release a more detailed update on the project in H1 2013 with the results of all the samples.

 

Graphite project

An internal evaluation regarding the feasibility of restarting the Merelani Graphite Mine is underway with current work focusing on historic data to verify the historic production, resource, grade and quality. The Merelani Graphite Mine was operational from 1996 to 1998 before being converted to a tanzanite mining operation only. Historically 8,000 tonnes of graphite concentrate have previously been produced on the licence area, with a 1992 feasibility study determining a significant non-JORC compliant resource and non-JORC compliant reserves.

 

The internal evaluation is due for completion during H1 2012 and the Company has commenced discussions with third parties to develop the project. Further announcements will be made in due course.

 

Illegal mining activities

The Company continued to call for assistance from the Tanzanian Government regarding the illegal mining activities into its area from the neighbouring blocks and are pleased to report that it has started to receive significant assistance from Government in addressing the illegal mining activities.

 

Joint Venture discussion

As announced on 27 November 2012, TanzaniteOne Mining Limited, a wholly-owned subsidiary of Richland Resources Ltd, is in ongoing negotiations with the Government of the United Republic of Tanzania ("Government") regarding a potential shareholding by the Government. The potential joint venture and shareholding currently under discussion relates to the ownership structure of the Mining Licence covering Block C at Merelani. Further announcements will be made as soon as these negotiations are concluded.

 

Royalty claim

The Tanzanian Minerals Audit Agency ("TMAA") is currently re-auditing financial records of the Company's subsidiary; TanzaniteOne Mining Limited ("TML"), with regards to the additional, retrospective royalties claim relating to the period from 2004 to 2008 and whilst no additional information is currently available we will update shareholders in due course.

 

Sapphire Project

The Company's option agreement over the Australian Sapphire project remains valid and the Board continues to review this.

 

Commenting today, Bernard Olivier, the Company's CEO, said: "During the recent quarter the company has begun the process of exploring the re-commencement of graphite production. With a significant non-JORC compliant resource and reserves determined at the Merelani Graphite Mine, coupled with increased global demand for graphite flakes, the company is confident that this low-cost and near-term revenue diversification strategy will greatly contribute in helping to realise share-holder value moving forward in 2013.

 

Despite the operational issues that we faced during 2012 as a result of the increased illegal mining into our mining area, we continue to remain focused on our tanzanite mining operations. The company is confident that once the on-going negotiations have been completed with the Government, the subsequent JV agreement will greatly assist the company in realising even further value from its tanzanite operations. Additionally dialogue with the government concerning illegal mining activity at the project has resulted in a positive outcome and our ever improving relationship with the government is extremely encouraging as the company aggressively pursues its growth strategies.

 

We look forward to updating existing shareholders on several of the outstanding matters in due course."

 

END

 

 

For more information please contact:

 

Bernard Olivier

Chief Executive Officer

+61(0) 4089 48182

 

Willi Boehm

Company Secretary

+61(0) 409 969 955

 

Nominated Advisor & Joint Broker (AIM)

RFC Ambrian Limited

Samantha Harrison/Jen Boorer

+44 (0) 20 3440 6800

 

Joint Broker

XCAP Securities PLC

John Grant/Jon Belliss/David Newton

+44 (0) 20 7101 7070

 

Newgate Threadneedle

Beth Harris/Richard Gotla

+44 (0) 20 7653 9855

+44 (0) 7979 955 923

 

 

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.

 

 

 

 

This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
MSCEAFAPEFFDEFF
Date   Source Headline
4th Nov 20087:00 amRNSOpen Letter to Shareholders RE: Tender Offer
31st Oct 20084:14 pmRNSDirectorate Change
28th Oct 20082:29 pmRNSResponse to Gemfields statement
27th Oct 20087:00 amRNSIssue of B Shares
24th Oct 20084:09 pmRNSDirectorate Change
21st Oct 200812:55 pmRNSResponse to Gemfields' Tender Offer
8th Oct 20083:52 pmRNSDirector/PDMR Shareholding
1st Oct 20087:00 amRNSRecord production
25th Sep 20082:55 pmRNSRebuffal of Gemfields open letter
23rd Sep 20087:00 amRNS1H 2008 Financial Results Conference Call
22nd Sep 20087:22 amRNSInterim Results
15th Sep 20084:48 pmRNSUnsolicited Conditional Takeover Proposal
12th Sep 20083:42 pmRNSUnsolicited takeover approach
28th Jul 20088:40 amRNSResult of AGM
30th Jun 20088:26 amRNSAnnual Report and Accounts
9th Apr 20089:39 amRNSDirector/PDMR Sharehldg-Amend
7th Apr 20084:01 pmRNSDirector/PDMR Shareholding
31st Mar 200811:19 amRNSFlooding in Merelani area
6th Mar 20088:00 amRNSFinal Results
21st Jan 20089:45 amRNSResult of AGM
21st Dec 200711:07 amRNSDirectors' purchase of shares
21st Dec 20079:48 amRNSNotice of AGM
19th Dec 20079:33 amRNSDirector/PDMR Shareholding
5th Dec 200711:35 amRNSDirector/PDMR Shareholding
22nd Oct 20077:01 amRNSTsavorite Acquisition
28th Sep 20077:02 amRNSInterim Results
24th Sep 20079:58 amRNSAdditional Listing
17th Aug 20073:40 pmRNSAIM Rule 26 Information
19th Jul 200712:39 pmRNSDirectorate Change
18th Jul 20079:28 amRNSHolding(s) in Company
26th Jun 20079:08 amRNSAnnual Report and Accounts
25th Jun 20079:41 amRNSDirector/PDMR Shareholding
25th Jun 20079:36 amRNSDirector/PDMR Shareholding
23rd Apr 20077:00 amRNSTwo new distribution partners
27th Mar 20074:06 pmRNSDividend Update
20th Mar 20075:59 pmRNSExercise of options
19th Mar 20077:00 amRNSFinal Results
19th Feb 20077:00 amRNSDrilling Report
6th Oct 200611:22 amRNSDirector/PDMR Shareholding
5th Oct 20067:00 amRNSDirector/PDMR Shareholding
4th Oct 20065:48 pmRNSDirector/PDMR Shareholding
3rd Oct 20064:59 pmRNSDirector/PDMR Shareholding
29th Sep 20067:01 amRNSInterim Results
20th Sep 20062:42 pmRNSResult of AGM
29th Aug 20063:00 pmRNSNotice of AGM
21st Aug 20064:27 pmRNSAppointment of joint broker
28th Jul 20064:20 pmRNSChange of Adviser
29th Jun 20064:45 pmRNSAnnual Report and Accounts
21st Apr 200612:12 pmRNSDirector Shareholding
20th Apr 20063:56 pmRNSDirectors' Shareholdings

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