BlueRock Diamonds plc, the AIM listed diamond mining company, which owns and operates the Kareevlei Diamond Mine in the Kimberley region of South Africa has conditionally raised gross proceeds of £1,235-million via an oversubscribed placing and subscription of 3,528,574 new ordinary shares of 5 pence each in the company at a price of 35 pence per Placing Share.
In addition to the placing, three of the company’s directors have indicated their intention to subscribe for a further £5 000 each on the same terms as the placing. Accordingly, the total gross amount raised is expected to be £1,25-million. The net proceeds of the placing will primarily be used to fast-track its growth plans and strengthen the balance sheet.
BlueRock executive chairman, Mike Houston, says, “I had hoped to be confirming that the expansion plans announced in February of this year had progressed in line with our earlier plans and that we were on track to be running at a run rate of 700 000 tonnes per annum during Q3.
“Unfortunately, the global pandemic halted these plans and forced us to rethink the way in which we operate. Over the past few months we have taken a number of important steps to protect the business in what is an extremely challenging environment: we have brought production safely back on line; developed a new marketing channel; put in place a pre-sales financing structure; completed the combining of KV1 and KV2 into KV Main Pit; and further modified the current plant resulting in improved production throughput. In addition, management re-looked at the expansion plan and in line with maximising on the resource utilisation, increased the proposed production from 700 000 tonnes (c.32 000 carats) to 1-million tonnes (c45 000 carats) per annum.
“The mining to date has illustrated the potential for the overall resource to be increased both in area and depth and we anticipate announcing an updated resource statement in Q3 2020.
“We have stressed to shareholders the importance of getting the economies of scale right; the funds raised today will enable us to continue with this strategy to increase annual production volumes and to implement cost cutting and efficiency measures in order to optimise the profitability of the company.
“Additionally, our balance sheet has been significantly strengthened to help us better withstand the extreme uncertainty of operating in a COVID-19 environment while implementing our exciting expansion plans; our current cash and near cash balance of £1,2-million, together with the new funds, give us a total cash balance of c.£2,4-million. We believe that the measures that we have undertaken mitigate the risk of COVID-19 but no company can fully insulate itself from these extreme external factors.
“The health and safety of our employees remain paramount and we have worked closely with the Department for Mineral Resources to implement measures to minimise the risk of working in the COVID-19 environment. To date, I am pleased to say that we have had no cases of COVID-19 amongst our work force and are not aware of any cases in the areas where most of our staff live.
“Given our expansion plans are fully developed, and with the support of existing and new investors, who I am delighted to welcome to our share register, we look forward to commencing work immediately and keeping the market fully informed of progress.”
