REG - BlueRock DiamondsPLC - Operations Update

Bluerock DiamondsAnnouncement

01/06/2022 10:30

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RNS Number : 5572N  BlueRock Diamonds PLC  01 June 2022

BlueRock Diamonds PLC / AIM: BRD / Sector: Natural Resources

1 June 2022

BlueRock Diamonds PLC ('BlueRock' or the 'Company')

Operations Update

 

BlueRock Diamonds PLC, the AIM listed diamond producer, announces an update on
operations at its Kareevlei Diamond Mine ('Kareevlei') in the Kimberley region
of South Africa.

 

During the first five months of 2022, Kareevlei experienced nearly double its
normal annual rainfall (561mm/22 inches).  May's rain in particular, at over
three times the long-term average, has had a significant impact on both mining
development and processing against expectations.

 

Mining development fell 36% (400,000 tonnes) as compared to budget for April
and May, which has limited the mine's access to quality kimberlite and
necessitated the use of lower grade and more difficult to handle material
(clay content) in Kareevlei's processing operations.  Additionally, where
BlueRock had hoped to ramp up production at its new 1Mtpa processing plant,
the unforeseen lost days to rain and the lower-grade feed resulted in
operations being down against budget over the period March to May by 48% on
tonnes processed, 51% on grade and 74% on carats produced.

 

Accordingly, while South Africa is now experiencing belated drier weather
conditions, the delayed roll out of the Company's mining development plan will
impact production output in Q2 and early Q3, and therefore the 2022 outlook.
In addition, as a result of global economic conditions, the Company is facing
increased costs of production due to higher diesel prices and increased costs
of major suppliers.

 

As a result of fewer diamonds being produced and sold as well as increasing
costs, BlueRock's cash resources have been depleted during what continues to
be a period of heavy investment in mining development.  The Company has
therefore entered into discussions with a major shareholder and providers of
debt finance to support it through this period; further announcements will be
made in due course.

 

BlueRock Executive Chairman, Mike Houston, said, "While it is of course
disappointing to report the problems caused by the continuing wet weather at a
time when we expected to be operating at near capacity, the safety of our
personnel and equipment is our foremost obligation.  As we finally move into
drier weather, I am pleased to report operations are improving rapidly, which
will enable us to take advantage of the buoyant market, with prices achieved
for BlueRock's unique stones averaging over c$600 per carat during 2022 -
marking an uplift of 29% versus 2021 prices.   While our reduced mining
activity during the last few months will impact in the near term on our
ability to achieve the consistent grade that we expected in 2022, our guidance
for 2023 remains unchanged.

 

"Whilst we acknowledge that we can plan better for the wet season, no
preparation can fully cover you in these extraordinary circumstances, however,
management is confident that fundamentals remain sound for Kareevlei building
up output to 1Mtpa and circa 43,000 carats production in 2023. This year, we
are still on track to increase output by at least 50% and the plant has
performed well in the intermittent periods of dry weather."

 

Outlook

While guidance for 2023 remains unchanged, the Company's revised guidance for
2022 is as follows.

 

                            Revised Outlook:  Previous Outlook: 2022  % Change: 2022  Outlook:

                            2022                                                      2023
  Tonnes processed ('000)   780 - 830         900-950                 -15%            1,000
  Carats produced           28,000 - 33,000   36,000-43,000           -30%            43,000
  Grade                     3.60 - 4.00       4.0 - 4.5               -12%            4.3
  Value Per Carat (USD)     500 - 550         450                     +14%             450
 Revenue (USDm)             14 - 18           16 - 19                 -9%             19

 

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 as it forms part of UK domestic law by virtue of the
European Union (Withdrawal) Act 2018 ('MAR'). Upon the publication of this
announcement via Regulatory Information Service ('RIS'), this inside
information is now considered to be in the public domain.

 

**ENDS**

 

For further information, please visit BRD's
website www.bluerockdiamonds.co.uk (http://www.bluerockdiamonds.co.uk/)  or
contact:

 

 BlueRock Diamonds PLC

 Mike Houston                           m.houston@bluerockdiamonds.co.uk

 David Facey, FD                        dfacey@bluerockdiamonds.co.uk
 SP Angel (NOMAD and Broker)

 Stuart Gledhill / Caroline Rowe        Tel: +44 (0)20 3470 0470
 St Brides Partners Ltd (Financial PR)

 Isabel de Salis / Oonagh Reidy         bluerock@stbridespartners.co.uk

 

Notes to editors:

BlueRock Diamonds is an AIM-listed diamond producer which operates the
Kareevlei Diamond Mine near Kimberley in South Africa which produces diamonds
of exceptional quality and ranks in the top ten in the world in terms of
average value per carat. The Kareevlei licence area covers 3,000 hectares and
hosts five known diamondiferous kimberlite pipes with a combined inferred
resource of 10.4 million tonnes / 516,200 carats (February 2021); based on its
planned production of 1 million tonnes per annum, this provides a minimum
10-year life of mine.

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