RAPAPORT... BlueRock Diamonds has asked its financial backers for help after severe rainfall dented production at its mine in South Africa.
The drop in rough output and sales, as well as higher costs, has depleted BlueRock’s cash resources during a period of heavy investment, it said Wednesday. The company has entered discussions with a major shareholder and providers of debt finance to “support it through this period,” management added.
The Kareevlei deposit experienced nearly double its normal annual rainfall during the first five months of 2022, the miner explained. The impact was especially intense in May. This reduced the company’s ability to work on developing the mine and limited its access to high-quality kimberlite. As a result, carat production for the period from March to May was 74% below budget.
“Whilst we acknowledge that we can plan better for the wet season, no preparation can fully cover you in these extraordinary circumstances,” said BlueRock executive chairman Mike Houston.
The miner now expects to unearth 28,000 to 33,000 carats this year, compared with a previous outlook of 36,000 to 43,000 carats. Revenue for the year will come to between $14 million to $18 million, versus an earlier plan of $16 million to $19 million, it predicted.
“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,” Houston noted.
Image: A rough diamonds. (BlueRock Diamonds)
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