TIDMRLD
RNS Number : 6913E
Richland Resources Ltd
14 April 2014
14 April 2014
Richland Resources Ltd
("Richland" or "the Company") (AIM: RLD)
Strategic Review and Operations Update
Richland today announces that it is undertaking a group wide
strategic review of its operations, which will include a review of
all costs, revenue optimization and best use of funds available for
investment in gemstone projects. The reason for this review is that
the improvements to security anticipated by the Company at the
Merelani tanzanite mine at Block C in Tanzania have not occurred.
The Merelani tanzanite mine is operated by Richland's subsidiary,
TanzaniteOne Mining Limited ("TML"). The consequence of this is
that (a) TML's employees continue to be unable to safely work in
large parts of Block C due to the on-going presence of illegal
miners and (b) TML is not able to mine profitably with its current
cost structure in the currently constrained mining area.
This review is being undertaken in conjunction with the
operating board of TML, which is responsible for the Merelani
tanzanite mine. The board of TML is also consulted with its joint
venture partner the Tanzania State Mining Corporation ("STAMICO"),
a United Republic of Tanzanian ("Government") parastatal.
Background
As previously announced, TML has experienced incursions into
Block C by illegal miners for years and for a sustained period
large areas of Block C have been occupied and held through force by
illegal miners which have severely affected the Company's operation
and financial performance. Following instruction from the
Government at the time of the original incursions into Block C, TML
security employees made no attempt to retake the areas and awaited
assistance from the appropriate bodies.
In June 2013, TML reached an agreement with the Government for
the granting of a new Mining Licence for Block C to be held on a
50:50 basis with STAMICO, in conjunction with STAMICO being brought
into the mining operation as a joint venture partner (the
"Agreement"). As part of the Agreement, the Government agreed to
facilitate curbing of tanzanite smuggling, illegal mining in Block
C and ensure mining operations are conducted in a safe and
conductive environment.
Following signing of the Agreement, the Government co-ordinated
an initial effort to clear illegal miners from Block C. This
operation, which tragically led to the shooting dead by illegal
miners of a TML employee who was assisting police, led to the
clearance, by August 2013, of the northern area of Block C of
illegal miners. Since that time no further action has been taken by
the Government to clear the other areas of Block C which had been,
and continue to be, or are in danger of being, occupied by illegal
miners.
On 4 December 2013, TML signed the formal joint venture
agreement with STAMICO under which STAMICO undertook in relation to
tanzanite smuggling and illegal mining operations in Block C to use
their best endeavours to facilitate and liaise with Government
authorities to ensure that necessary enforcement actions are taken
in a coordinated and timely manner.
The directors of Richland (the "Directors") reasonably
anticipated that, following the formalisation of the joint venture
with STAMICO, the illegal occupiers of mine shafts in Block C would
be removed. This would allow reinvestment in the mining
infrastructure in previously illegally occupied areas of Block C.
However, to date this has not occurred, due to Government inaction,
despite repeated requests for assistance made to the Government /
STAMICO by Richland and the TML board.
Reason for Strategic Review
The present TML operating structure will remain unprofitable due
to it being set up for mining the entirety of Block C. The Company
had maintained this cost structure on the basis of previous
assurances from the Government. As the Government has to date not
taken the anticipated security action TML have informed STAMICO,
and the Government, that (a) until the Government enforces an
environment at Block C where worker safety can be assured, and
mining undertaken economically by TML that TML can not continue to
operate under its current cost structure and (b) TML will not, due
to safety concerns, sanction any attempt to restart mining across
the whole of Block C.
As TML does not have such safe access to the whole of Block C,
Richland and its operating subsidiary, TML, are currently
investigating all possible costs cutting measures, including the
possible retrenchments of significant numbers of TML employees with
the aim of aligning the operating cost structure to the available,
secure mining area. TML have advised STAMICO of this review.
The Directors have also decided that Richland will not be
providing any further funding to TML until the conclusion of this
review and Government action has ensured the access and security of
TML employees across the whole of Block C. As part of the review,
the Company will also be looking at ways in which it can optimise
revenue from its existing Tanzanian operations.
In light of the decision not to invest additional funds into
Tanzania, Richland will be looking to accelerate its
diversification strategy outlined in its circular issued to
shareholders on 19 December 2013. The Company's Tsavorite project,
located in Tanzania, will be placed on hold during the period of
the strategic review.
Richland's financial position
As at 31 March 2014, Richland had cash of approximately US$3m in
its bank accounts. These funds will not be made available to
TML.
In light of the cost cutting measures across the group, the
Directors consider it appropriate that with effect from 31(st)
March 2014 each of the Directors take a 50% reduction in board fees
and executive director salaries and fees. This will continue until
such time as TML is able to operate profitably, or until Richland
is otherwise trading profitably.
Further announcements will be made in due course.
Commenting on the announcement Bernard Olivier, CEO, of Richland
Resources said:
"Until such time that a safe working environment can be assured
for workers at the Merelani tanzanite mine no further capital will
be provided to the TML/STAMICO joint venture by Richland. The mine
at Block C is one of the most advanced gemstone recovery operations
in the world, capable of generating highly attractive profits for
its joint venture partners and significant royalties and taxation
revenues for the Government neither of which are paid by the
illegal miners. However under the present conditions significant
productive areas of Block C remain under the control of illegal
miners and until these areas are recovered, and a safe working
environment for TML staff guaranteed, Richland do not believe it is
prudent to invest further funds into TML's operations in
Tanzania."
END
For more information please contact:
Bernard Olivier
Chief Executive Officer
+61 4089 48182
Mike Allardice
Group Company Secretary
+852 91 864 854
Nominated Advisor & Broker (AIM)
RFC Ambrian Limited
Samantha Harrison / Craig Francis
+44 (0) 20 3440 6800
Laurence Read
Corporate Development and Communications Officer
+44 (0)20 3289 9923
http://www.richlandresourcesltd.com
------------------------------------
Notes to the Editor:
Further information is available on the Company's website:
www.richlandresourcesltd.com. Neither the contents of the Company's
website nor the contents of any website accessible from hyperlinks
on the Company's website (or any other website) is incorporated
into, or forms part of, this announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCBUGDSRBBBGSB
Lexington Gold (LSE:LEX)
過去 株価チャート
から 6 2024 まで 7 2024
Lexington Gold (LSE:LEX)
過去 株価チャート
から 7 2023 まで 7 2024
