Richland Resources suffers revenue decline after gemstone theft

11th Feb 2013 12:37

Richland Resources, an AIM-listed gemstone producer and developer of associated minerals, posted a rise in total fourth quarter tanzanite production, but warned revenues were hit by a theft. Production for the period rose to 795,162, compared to 554,060 in the same period the previous year.The average grade achieved during the period was 102 carats per tonne (58 carats for Q4 2011), although sales totalled $3.9m compared to $5.9m the same quarter in 2011 - although this was primarily due to the theft of gemstones during that period. During the break-in, an estimated $1.46m worth of stones were stolen. Meanwhile, the company also said it is in onging negotiations with the government of the United Republic of Tanzania over a potential shareholding. During the fourth quarter the group recommenced the bulk sampling of the tsavorite project, and said that around 666 tonnes were collected and processed from six different sites within the deposit area. 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, it added. Bernard Olivier, the company's Chief Executive Officer, 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 joint venture 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."The share price fell 7.32% to 4.75p by 13:10 on Monday.NR