Richland Resources (LON:RLD) expects to start sapphire production from Australia within the next six months, though prospects for its troubled tanzanite business remain unclear.
The miner’s battle against illegal mining on its tanzanite licences in Mozambique meant interim revenues almost halved to US$3.9mln, while net losses doubled to US$1.2mln. Cash at the half year was A$1.2mln.
Richland said even in the areas it had recovered from illegal occupation the extent of the damage to the recovered shafts were more significant than expected and rehabilitation will take longer than expected.
Tanzanite production rose over the period to 2.35mln carats (1.54mln carats) as recoveries rose to 178 carats per tonne from 93 carats as it and partner Stamico focused on the areas it can access.
Bernard Olivier, chief executive, said: "While tanzanite production has formed the base of operations for many years, we have begun the process of diversifying Richland's portfolio with the acquisition of the Capricorn sapphire project in Australia.
“Production of sapphire should begin by Q1 2015 and provide a reliable source of gemstones to customers, being situated in a politically stable country with a proven track record in sapphire production.”
Richland paid A$1.18mln cash and 18mln shares for Capricorn.