Richland Resources PLC (LON:RLD) has decided to upgrade its sapphire processing operation after a sales and marketing review indicated this would significantly improve margins.
Sales in the fourth quarter were US$379,000 to date but the review found a reluctance by dealers to take untreated non-blue sapphires.
As a consequence, Richland has initiated a vertical integration strategy for sapphires from its Capricorn mine through the beneficiation of its stones.
Around 3,000 carats of predominantly fancy and multi-coloured sapphires have already been treated and polished.
Edward Nealon, chairman, said test sales demonstrated not only would it be able to achieve significant margins through beneficiation, but supplying a final cut and polished product would boost it sales base, especially for the range of fancy sapphires.
Capricorn Sapphire's total operational cost, inclusive of heating, cutting and polishing costs, are below US$1 per carat for the current quarter to date.