London-based BlueRock Diamonds, which operates and owns 74% of the Kareevlei mine based in Kimberley, South Africa, achieved profitability for the first time in the second half of 2019 after more than doubling its diamond output and revenue. The junior miner made good on its September prediction that it would achieve profitability in H2 2019 through enhanced production. BlueRock points to April 2019 as the turning point, when the company installed a new operational management team and changed its mining plan; the revision of its production strategy has clearly paid off.
BlueRock's revenue for the year grew 190% on a 118% increase in the volume of carats sold. 2019 revenue reached £4.1 million ($5.35 million) from the sale of 12,675 carats as compared to revenue of £1.4 million ($1.8 million) from the sale of 5,805 carats a year earlier. In the fourth quarter alone, the miner sold 4,170 carats of rough goods, a 172% increase over Q4 2018. In addition to record record sales and carats recovered, the miner also booked gains in production, grade and average value per carat.
The miner's production (tonnes of ore processed) increased by 70% in FY 2019 and more than doubled in Q4 2019 compared with the same period in 2018. The fact that Q4 production more than doubled from the comparative period in 2018 reflects the company’s improved ability to operate in the rainy season (which started in December) and the fact that the plant operated throughout the Festive Season. The grade also continued to improve in Q4 to a record level of 4.65 cpht, lifting the overall grade for the year 32% higher than the previous year. This combination of an increase in volumes processed and recovery grade led to a 125% increase in the number of carats produced in the year, 14,033, compared with 6,247 last year. The improved grade was assisted by the majority of kimberlite mined coming from the higher grade KV1 pipe.
BlueRock Executive Chairman, Mike Houston, was satisfied that the company "achieved the aggressive guidance for 2019 and operated profitably for the first time in the second half of 2019." He reiterated that this achiement is a result of implementing the revised production strategy brought in by the company’s new management team in Q2 2019, which has focused on stabilising production ahead of maximising the exploitation of the resource. "To that end," he added, "we are developing plans to effect a further step change increase in production and lower unit costs.” The company plans to meet its Q1 2020 target production volumes, which are significantly ahead of those achieved in Q1 2019.