Richland Resources Ltd (LON:RLD) has obtained a six month £300,000 secured convertible loan facility from an existing significant shareholder in the company, to provide short term working capital.
Mining operations at the company’s Capricorn sapphire mine in Australia were suspended in December 2017, but Richland now plans a re-start later this year, allowing that sufficient funds for the restart can be raised.
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Richland has conducted regular and ongoing maintenance activities to ensure the good standing and preparedness of the mine's infrastructure and equipment. It is currently envisaged that operations could be recommenced within a timeframe of approximately one month from a re-start decision being made.
Internal exploration activities have focused on refining the company's mining plan with two initial target areas identified and delineated on Capricorn Sapphire's licenced acreage for opening-up when production recommences.
Further exploration is programme planned, once the mine is back in production, to target potential resource expansion and improvement in grade and recovery comprising, subject to funding, a ground penetrating radar survey and further drilling together with the potential appointment of a site geologist in order to more tightly control mining and exploration geology.
Potential for higher sales
Richland believes that Capricorn has the potential to achieve higher sales prices by lengthening the sales cycle and accordingly pre-sales negotiations have been held with targeted key customers to seek to secure longer term supply arrangements and relationships which are anticipated to result in improved pricing once production recommences.
The company also intends to create mine stockpiles onsite concurrently with production, when it recommence.
Meanwhile, market conditions for sapphires have generally improved.
Accordingly, in the third quarter Richland will seek to procure sufficient additional longer-term financing to enable the recommencement of production later this year.
In addition, Richland plans to identify and evaluate opportunities to expand its gemstone business through the potential acquisition of additional gemstone projects.