4th May 2016 08:51
LONDON (Alliance News) - DiamondCorp PLC Wednesday said 2015 was slightly disappointing after the company failed to restart production from its flagship mine as planned, but said its pretax loss shrunk in the year as it moves toward commercial operations this year.
The diamond miner focused on its flagship Lace mine in South Africa said its pretax loss was narrower in the last financial year despite the company continuing to make nominal amounts of revenue.
The main driver of the GBP2.4 million loss in 2015 compared to the GBP3.3 million loss booked a year earlier was the fall in fair value adjustments to GBP570,257 from GBP1.7 million a year earlier, partly offset by operating expenses rising to GBP1.9 million from GBP1.6 million.
2015 was a disappointment for DiamondCorp on an operational front, as the Lace mine failed to being producing as expected.
"It was hoped that 2015 would be the year that the Lace Mine resumed commercial production for the first time since 1931. Unfortunately, underground mining operations met a few unforeseen bumps in the road, and it is only now, a year later, that we have completed our first diamond tender and are finalising mine development prior to full commercial production of 30,000 tonnes per month of kimberlite from July 2016," said Chairman Euan Worthington.
DiamondCorp managed to install and commission the underground conveyor belt during 2015 which is transporting kimberlite and waste to the surface without the need for the company to haul material over long distances using trucks.
Another positive event was the completion of dams and water recovery systems on site, which has alleviated concerns about water availability for processing the kimberlite ore, an important achievement as low rainfall has been recorded over the past few years, it said.
All miners operating in South Africa have had to renegotiate wages with workers, which has previously resulted in strike action by DiamondCorp workers and workers for other companies operating within the sector in South Africa.
However, after agreeing an 8.0% pay rise with staff, workers are back to work, and DiamondCorp said there has been no stoppages for industrial action since that was agreed in February.
"At the end of March this year, the first sale for 85 years of mined diamonds from Lace was a major milestone for our company," said Worthington. "We can now look forward to unlocking the full value of this exciting long life mine."
DiamondCorp shares were trading up 0.7% to 6.92 pence per share on Wednesday.
By Joshua Warner; [email protected]; @JoshAlliance
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