As part of the one-million-tonne-a-year expansion project at its Kareevlei diamond mine, in Kimberley, South Africa, Aim-listed diamond producer BlueRock Diamonds has successfully operated all key areas of its new production plant at design capacity on a short-cycle basis during the hot commissioning phase.
During the process, the plant team has been making minor modifications to the processing circuit on both lines to adjust to the higher volumes and mix of ore to provide the economies of scale to turn the mine into a highly cash-generative asset.
As noted in October, BlueRock planned to continue to operate its old plant until such time as it was confident that the first line of the new plant was functioning at design capacity on a sustained basis.
Using this configuration, volumes in excess of 3 000 t a day have been achieved, which would be sufficient to achieve BlueRock’s target of one-million tonnes a year.
BlueRock executive chairperson Mike Houston says the company remains confident of achieving its targeted guidance as a result of producing 19 362 ct thus far in the year and having a further seven weeks of production available to the year-end.
Also, the move to operating both new lines should increase volumes further and reduce costs towards target levels.
Given the volumes that BlueRock is achieving using the current configuration, the old plant will now operate alongside Line 1 until the new plant has been completely debugged to increase production levels over the next couple of months.
This both ensures that the company is well positioned to meet guidance of between 22 000 ct to 26 000 ct produced by the end of the year, while also increasing cash inflow in a situation where BlueRock is carefully managing limited cash resources having recently repaid half of the convertible loan note originally issued in 2014. This amounted to £462 500 in accordance with its revised agreed terms.
“Significant cost and operating efficiency benefits are anticipated once the new plant is running at capacity,” Houston adds.