Richland Resources Limited – Interim Results for the half year ended 30 June 2011

Richland Resources Limited – Interim Results for the half year ended 30 June 2011

Interim Results for the half year ended 30 June 2011

Richland Resources Ltd, the gemstone producer and developer, today announces its interim results for the half year ended 30 June 2011.

Financial Highlights

  • EBIDTA of $3.4 million; an 89% increase compared with an EBIDTA of $1.8 million in 1H 2010
  • 129% increase in net profit to $1.6 million compared to $0.7 million for the 1H 2010; a 144% increase above the entire FY2010 profit of $0.6 million

  • Revenues increased by 21% to $10.4 million (1H 2010: $8.6 million)
  • Gross margin achieved 73%, up from 66% for the 1H 2010

  • Operating costs well maintained at $8.2 million in 1H 2011 compared to $7.8 million during 1H 2010.
  • Net current assets at 30 June 2011 of $14.2 million, including:

-     Cash and cash equivalents of $1.7 million;

-     Trade and other receivables (mainly proceeds of June 2011 sales) of $6.3 million; and

-     Income tax receivable of $2.2 million

Operation Highlights

  • Tanzanite production levelsincreased by over 200,000 carats in 1H 2011 to 1.25 million carats, up 19% from the 1.05 million carats produced in 1H 2010
  • Average recovered tanzanite grade of 60 carats per tonne;

-     Grade increase of 9% compared with 55 carats per tonne achieved in 1H 2010.

  • Commissioning of new cutting and polishing facility located at the TanzaniteOne Mining mine in Merelani, Tanzania
  • Tanzanite Experience sales 23% higher to $0.8 million in 1H 2011 compared to $0.65 million 1H 2010

  • Establishment of Maiden JORC compliant Indicated and Inferred Resource for the tsavorite project

Strategic Highlights

  • On 01 June 2011, the Company entered into an option agreement to acquire established sapphire project in a known sapphire field in Australia
  • Commenced listing process of Richland Resources Ltd on the Dar es Salaam Stock Exchange, Tanzania

  • Ongoing focus on innovative ways to market and sell tanzanite.

Commenting on the results, Chief Executive Officer, Bernard Olivier said: 'The Company has once again achieved significant growth in revenue over the period, reflective of the continued recovery of tanzanite prices. The increase in the average grade, total production and sales of tanzanite compared to the parallel period last year is testament to our commitment to the Company's margin enhancement programme and we look to continue to develop these efficiencies with a focus on innovative channels to market and sell tanzanite. Over the next 6 months we also aim to expand our coloured gemstone portfolio of mineral assets and look forward to successfully completing our due diligence and exercising the option for a new sapphire project in Australia.'

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