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Tanzanite producer Richland Resources (LON:RLD) increased production in its latest quarter, though sales were affected by a break-in at its sorting house.
Tanzanite output totalled 795,000 carats in the three months to December, up from 554,000 a year earlier and 699,000 in the previous three months.
Average grades were 102 carats per tonne compared to 58 carats in the comparable period a year ago.
Sales in the period were US$3.9mln and would have been higher but for the break-in, which saw US$1.46mln worth of stones, or 89,066 grams, stolen.
Richland said the theft is being investigated by the police and its insurance company and both of these investigations are progressing well.
On the exploration front, Richland has recommenced bulk sampling of its tsavorite project, while an internal evaluation is underway into the re-opening the Merelani Graphite mine.
The internal evaluation is due for completion during the second half of 2013 and the company has commenced discussions with third parties to develop the project after a significant non-JORC compliant resource was identified.
TanzaniteOne Mining Limited, Richland’s wholly-owned subsidiary, is still in negotiations over the Tanzanian government taking a stake in the mining licence covering Block C at Merelani.
Bernard Olivier, Richland’s chief executive, said that once the on-going negotiations have been completed with the government, the subsequent joint venture agreement will greatly assist the company in realising even further value from its tanzanite operations.
“Additionally dialogue with the government concerning illegal mining activity at the project has resulted in a positive outcome and our ever improving relationship with the government is extremely encouraging as the company aggressively pursues its growth strategies.”
Broker RFC Ambrian said the quarter’s production was a good achievement given the numerous challenges it faced during 2012, though the increase in grades was partly due to illegal miners restricting access with Richland offsetting reduced mine production by mining higher-grade zones.
"It’s fair to say that 2012 was a tumultuous year for Richland Resources: the recent break-in and gems theft, a continued government royalty claim dispute, the presence of illegal miners and (most recently) the confirmation of the government JV discussions have all contributed to a difficult year that management has done well to cope with.
"Progress on these issues is continuing, and we remain confident about a resolution," it said.
Shares were down 0.375p to 4.75p this morning.