Junior mining and exploration company Diamcor has narrowed its net loss for the financial year ended March 31, to $762 308, compared with a loss of about $2.4-million for the 2022 financial year.
This translated to a loss of $0.01 a share, an improvement from the loss of $0.03 a share in the prior year.
The company’s financial management also resulted in the reduction of operating expenses by 18% to nearly $3.6-million and a significant 139% increase in gross margin to about $3.61-million for the year. General and administrative expenses remained consistent at about $2.8-million during the same period.
Another significant milestone for the company was the reduction of long-term debt by $360 457 to about $6.1-milion for the financial year, compared with nearly $6.5-million a year ago. Nearly $5.8-million of this debt was attributed to the deferred term loan and convertible debenture associated with the company's strategic alliance with Tiffany & Co, which is recorded as a current liability.
Diamcor reported on August 1 that its focus for the year was centred on managing costs, advancing trial mining efforts and preparing for drilling and bulk sampling activities at its Krone-Endora at Venetia diamond mining project in Limpopo, South Africa.
A priority for the company has been to find ways to mitigate the negative impacts of loadshedding in South Africa.
By the end of the fiscal year, Diamcor said it was experiencing outages multiple times a day for extended periods. The company initially installed generators at the project, which were designed to be used as a backup when required.
However, with the frequency of outages increasing during the year, extensive planning is ongoing to advance and install additional alternative power systems to mitigate the effects of future issues surrounding power supply at the project.
On July 12, Diamcor announced that it had completed the reconfiguration of the Krone-Endora at Venetia’s back-up generators to allow them to act as a primary power source for the project when needed.
Aside from the extensive planning and preparations that took place throughout the year, which focused on refining the project's backup generator power systems, efforts were made to find ways of reducing power consumption at the processing plants and streamlining heavy equipment circuits and cycle times.
These initiatives are geared towards maintaining processing volumes while reducing reliance on Eskom-supplied power.
Ongoing trial mining exercises at the project resulted in the recovery, tender and sale of 198 279.85 ct of rough diamonds, generating revenue of nearly $38-million. This has been achieved from the inception of the project up to the financial year-end, with an average price of $190.78/ct.
Throughout the year, the company also focused on managing operational salary and wages expenses, variable operational costs and historical fixed costs.
At financial year-end, the company had more than 128.5-million common shares issued and outstanding, with an authorised capital of an unlimited number of shares.
During the year, the company tendered and sold 18 476 ct of rough diamonds, witnessing an increase in the recovery of larger special rough diamonds, each more than 10.8 ct. This resulted in a 37% increase in revenues, amounting to nearly $6.3-million, compared to about $4.58-million during the same period a year ago.
The average dollar cost per carat also rose significantly by 39%, reaching $340.51/ct compared to $243.91/ct in the previous year.
Diamcor said continued reductions in overall rough diamond production from all major suppliers were expected to continue in the near term owing to the age of many of the mines, reductions in processing volumes owing to lingering Covid-19 limitations, and closures of certain other mines as they reached the ends of their lives.
The company said that the conflict between Russia and Ukraine continued to result in sanctions being placed on diamonds originating from Russia, which were estimated to have historically made up about 30% of the world’s rough diamond supply.
These combined developments present a potential opportunity for companies with rough diamond supplies.