Rockwell Diamonds said that its overall financial performance continues to be affected by the Tirisano start up.
It said although the South African mine had increased its production volumes by the end of the first quarter, mining was limited to a less clay-rich area, in the absence of a wet front end processing capability, which resulted in a smaller average diamond size.
Rockwell said in a statement that its board had approved an investigation initiated at the beginning of July to reconsider the mine plan at Tirisano.
This included strategies to alter the mining activity to Pit 4, which would reduce stripping ratios, and recover diamonds of a grade more in keeping with current market appetites.
“This plan will also reduce the mine's fixed cost structure and include retrenchments,” it said.
“The current processing plant will be temporarily placed on care and maintenance while the newly commissioned wet front end would be part of a simplified processing plant using existing equipment.”
Further technical studies would be conducted to confirm current estimates of the resource, and this would include additional independent investigations by expert persons, it said.
Meanwhile, Rockwell said that the longer-term supply and demand fundamentals for gem quality investment stones, comprising the majority of its production, remained positive. “Although the market has experienced price declines of some 20 percent for diamonds weighing less than 1.5 carats, such as those recovered this quarter at Tirisano, the +2 carat segment of the market that represents some 80 percent of Rockwell's production, is expected to be price stable for the remainder of the year,” it said.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
