Aim-listed diamond producer BlueRock Diamonds reports that waste stripping increased in December as mining activities at its Kareevlei diamond mine, in Kimberley, South Africa, returned to normal after the focus was shifted to ore from the KV2 resource to feed the plant to determine the realistic plant capacity.
As such, the strip ratio increased to 2.78 in December, bringing it to 3.49 for the year.
BlueRock also reports that production in December was lower as a result of the mine being closed over Christmas and New Year, but that arrangements had been made for a diamond tender in December to facilitate the cash flow for the month.
In addition, diamond prices continued to be lower in December, but BlueRock notes that its December revenue did not decrease significantly, being lower than what management had forecasted.
In terms of shares, the miner reports that the outstanding balance due under the notes is £361 667, of which £130 417 is held by Mark Poole and £231 250 held by Tim Leslie.
BlueRock says attempts to reach an agreement with Leslie have so far been unsuccessful and that a notice of statutory demand was being served on BlueRock by Leslie.
The miner points out that Leslie notified the company of his intention to present a winding-up petition should the amount outstanding on the loan note not be settled by January 13, with the company having written to Leslie’s solicitor seeking further discussions, and is awaiting a response.
BlueRock also reports that its debt to major shareholder Teichmann South Africa has increased to over R74-million – R44-million in excess of the facility of R30-million, which is due to be reduced to R20-million by the end of February.
However, BlueRock says Teichmann has not exercised its rights in the event of breach.
In this regard, BlueRock says discussions with Teichmann are continuing regarding its ongoing support to Kareevlei; however, no commitment has been received and it is unlikely that BlueRock will be able to reduce the amount drawn under the facility to comply with the terms of the agreement.
Going forward, BlueRock reports that its mining plan is in the process of being revised and financial forecasts are being reviewed based on the input of the specialists providing assistance to Kareevlei.
The funding requirement for essential capital expenditure and upgrades is being finalised, as is the working capital requirement for the period until the mine is operating normally, post the proposed plant upgrades and essential capital expenditure programme.
BlueRock says it continues to explore all options to enable operations to continue and obligations to be met.
However, the company points out that uncertainty exists on the ability to implement its turnaround plan on account of the statutory demand received from Leslie.