BlueRock Diamonds plc, which owns and operates the Kareevlei Diamond Mine in the Kimberley region of South Africa, reported its first ever profit in the six months ended December 31, 2019 (H2 2019) on the back of significant increases in production, sales and revenue during the year.

Revenue rose 190% to £4.1 million (unaudited) for FY 2019 (FY 2018: £1.4 million) with production volumes up 70% to 323,000 tonnes for the FY 2019 (FY 2018: 190,000 t), carats sold increasing 118% to 12,675 FY 2019 (FY 2018: 5,805), the grade improving in FY 2019 to 4.34 cpht (FY 2018: 3.28 cpht) and average price per carat rising 24% to US$ 415 per carat for FY 2019 (FY 2018: US$ 334).

The mine recovered a number of high-grade diamonds in 2019, reflective of moving into purer kimberlite mining, which has had an impact on the average price, BlueRock said. The improved performance was also due to a majority of kimberlite mined coming from the higher grade KV1 pipe, the company said, but added that mining was also carried out in KV5 with successful outcomes during Q4. Additionally, considerable progress has been achieved in re-opening up KV2, which will be mined as one larger pit with KV1.

BlueRock Executive Chairman, Mike Houston, said, “I am very pleased with the continued success at Kareevlei, having achieved the aggressive guidance for 2019 and operated profitably for the first time in the second half of 2019. We are proud of this key milestone, which is a testament to the implementation of the revised production strategy brought in by the Company’s new management team in Q2 2019. As stated in earlier announcements, this strategy has focused on stabilising production ahead of maximising the exploitation of the resource. To that end, we are developing plans to effect a further step change increase in production and lower unit costs.”

The Company said it expects to report not only positive EBITDA but positive comprehensive income for the second half of 2019 (excluding non-cash adjustments for IFRS 9 charges and movement in foreign exchange).

It added that Q1 2020 has started satisfactorily and management expect that despite the impact of seasonal rains that previously caused significant disruption to operations, the Company will meet its target production volumes for the quarter, which are significantly ahead of those achieved in Q1 2019.

There were 2,085 carats on hand at the end of December 2019 (December 2018: 808), which will be placed in the January tender, BlueRock stated.

At 31 December 2019, the Company had total unaudited liquid resources (cash and diamonds on hand to be sold in the January tender valued at cost) of approximately £763,000 (31 December 2018: £359,000).