Richland Resources (LON:RLD) has launched a strategic review of its tanzanite operation in Tanzania after failing to dislodge illegal miners occupying a substantial portion of its acreage.
Richland said that because of this its workers cannot work safely nor can it make a profit as its cost structure is based on mining the whole of its licence area.
The company signed a joint venture agreement with state-owned mining group Stamico at the end of 2013 that it hoped would see the Tanzanian army help eject the illegal miners from Block C at Merelani, but Richland said it has been disappointed with the response so far.
Until the review is complete and access and security in Block C at Merelani is secured, Richland will not put any more money into TML, the joint venture with Stamico that operates the mine.
Richland had cash of US$3mln at the end of March and to preserve funds the directors have taken a 50% pay cut until TML or Richland is operating profitably again.