6th Sep 2016 10:15
LONDON (Alliance News) - Gemstone producer and developer Richland Resources Ltd on Tuesday said increased development and production costs caused its loss to widen in the first half, as it continued to meet ramp-up targets.
Richland posted a pretax loss of USD1.5 million for the six months ended June 30, from USD983,000 the prior year, after cost of sales and operating expenses rose. This offset an increase in revenue to USD639,000 from USD278,000 a year earlier.
The company holds the Capricorn sapphire project in Queensland, Australia.
Richland said 1.0 million carats were produced at the project during the first half of 2016, comprising of 411,172 carats in the first quarter and 617,750 in the second. The company said 80,491 tonnes of material was processed in the period, and an average grade of 12.78 carats per tonne was achieved.
Richland said 438,696 carats were sold during the first half at an average price of USD1.30 per carat resulting in total revenue from sapphire sales of USD569,000.
The company said significant improvements were made to its operations including a processing plant, tailings dam and water retreatment, infrastructure, mining operations and sorting facility. This, it said, will allow production ramp-up beyond 800,000 carats per quarter from the third quarter of 2016.
Richland said it remains on track with this target, and noted its short-term strategy to ramp up to a rate of 1.2 million carats per quarter during 2017.
"The reporting period has seen us achieve a number of key operational goals at our Capricorn Sapphire project including the establishment of a new geological model and resource, in order to guide future extraction, and the implementation of important optimisation upgrades at the plant," said Chief Executive Bernard Olivier.
"A high production run-rate is now being maintained and I look forward to further ramping up production and continuing to build our sapphire sales and marketing channels to achieve profitability," Olivier said.
Shares in Richland were down 25% at 1.50 pence on Tuesday.
By Hannah Boland; [email protected]; @Hannaheboland
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
RLD.L