Diamond production, prices rise for BlueRock

13th Apr 2022 15:40

(Sharecast News) - BlueRock Diamonds reported a 34% improvement in production in its first quarter at South Africa's Kareevlei mine on Wednesday, to 115,356 tonnes.

The AIM-traded firm said its grade was 1.5% lower year-on-year, however, at 4.02 carats per hundred tonnes.

Total carats produced still rose 32% to 4,643, and carats sold were 46% higher at 5,887.

The company's average price per carat, meanwhile, grew by 54% year-on-year to $686 (£526.98).

"The first quarter production figures are encouraging, as they were achieved in a period that once again saw extremely wet weather conditions that have persisted into April," said executive chairman Mike Houston.

"As mentioned in our announcement dated 31 March, we are concentrating on mine development to ensure a consistent supply of ore, which requires a significant increase in waste mining in the short and medium term.

"Although mined tonnes achieved are significantly higher than the comparable period in 2021, the rain has delayed progress in this area impacting on quality ore supply in April."

Houston said the company was making further improvements to the processing operation as a result, which he said would "unquestionably" help in ramping up production as drier weather conditions arrived.

"The market for Kareevlei diamonds has remained extremely positive throughout the quarter, with carats sold up 47% and prices at an exceptional average of $686 per carat driving strong revenue flows.

"The outlook remains firm with the supply side, which was already tight prior to the current situation in Ukraine, further tightened with the uncertainty of supply of quality rough diamonds."

Notably, Mike Houston said the company was continuing to recover "some excellent stones", with nine high-value diamonds recovered and sold in the first quarter.

"Looking ahead, with a stronger balance sheet having recently completed a £2.1m placing before expenses, and a fair wind with regards to the diamond market, BlueRock is well positioned to achieve a significant step-change in its production [and] financial profile."

At 1445 BST, shares in BlueRock Diamonds were up 2.86% at 36p.