South African diamond miner BlueRock Diamonds, which is listed on the London Aim and operates the Kareevlei mine, in Kimberley, in the Northern Cape, has raised £2.1-million through the placing of six-million shares at 35p a share.
The net proceeds will be used to provide additional working capital to enable BlueRock to implement an upgraded mining plan to ensure consistent supply of quality ore to the processing plant, as well as to pay its mining contractor Teichmann to accommodate the impact of two operational shutdowns in the fourth quarter of 2021.
Following a review of the mining plan by operating subsidiary Kareevlei Mining CEO Meiring Burger, the BlueRock board has decided to "concentrate its resources on providing consistent supply of quality ore in terms of both the short-term objectives and the life-of-mine plan".
This, in turn, requires a large increase in waste mining over the next 18 months in the main pit, as well as the opening up of the largest pipe – KV3.
BlueRock expects the bulk of this waste mining increase to be funded from cash flow, as it expects to be operating on a consistently cash flow positive basis by the third quarter of this year when the throughput at its new plant is operating at a projected 85 000 t a month.
The funds raised will, however, be used to support the increased mining activity in the months ahead.
"The board is delighted to have concluded the placing, which will provide working capital for BlueRock's diamond business as it moves into a transformative growth phase, aiming to double carat production to 36 000 ct to 43 000 ct in 2022.
"With the one-million-tonne-a-year processing plant upgrade completed and seasonal heavy rains beginning to subside, the company looks forward to maximising production throughput and delivering the optimised mining plan," comments BlueRock chairperson Mike Houston.