Richland Resources (LON:RLD) has diversified away from its troubled tanzanite operation with the acquisition of a mothballed sapphire mine in Australia.
The coloured gemstones miner has exercised its option over the Nardoo project for A$1.18mln (£653,000) and aims to re-start production within nine months.
Bernard Olivier, Richland’s chief executive, said: “Nardoo presents Richland with an opportunity to start producing high quality sapphires within a relatively short timeframe.”
He added the capital expenditure requirement was low while the value of sapphires with proven provenance is high.
Certificated Richland stones would be sold through existing sales channels, he said.
Richland has been forced to look for new opportunities due to illegal mining at its tanzanite operation in Tanzania.
Even though it is now in a joint venture with the Tanzania state mining company, it still cannot access high grade areas on its licence because of illegal occupation and has stopped further expenditure until the problem is resolved.
Nardoo, in Queensland, has a measured JORC (2004) resource of 109 mln carats (21.8 mln grams) with an average grade of 20 carats per tonne and a plant capable of annual production of 4mln grams (20mln carats) of sapphires.
During 11 months of mining operations previous owner Australis used open-pit mining techniques to produce a total of 2.3 mln carats.