BlueRock Diamonds has acquired an option from Diacar to purchase its processing plant located at BlueRock's Kareevlei site.
Diacar has been operating the plant at the Kareevlei mine since November 2015 under a sub-contracting agreement for which it was paid 40% of the diamond revenues generated from the plant.
In July BlueRock announced the termination of the agreements with Diacar for loading and hauling services and for diamond processing.
The company has now reached an agreement with Diacar whereby Diacar has granted BlueRock an option to buy its processing plant for ZAR1.6m (approximately £82,000) at any time up to 31 December 2016 (the "Option Period"). The option cost is ZAR100,000 (approximately £5,100) plus ZAR50,000 (approximately £2,600) per month during the period of the option commencing on 1 October.
The technical capacity of the Diacar plant is similar to BlueRock's existing plant and the Option provides extra capacity during the option period and will enable BlueRock, at minimal cost, to further assess our options for providing a permanent increase in capacity.
BlueRock says mine operations have now recommenced and it expects to increase throughput gradually over the next couple of weeks and aims to move to 24 hour production as soon as it is confident that the amendments made to the plant over the last couple of months are operating as expected.
Chief executive Adam Waugh said: "The option to buy Diacar's plant gives us operating capacity and flexibility over the course of the next four months at little cost and with the benefit of 100% of any diamond revenues arising from the Diacar Plant going forward."
At 2:09pm: (LON:BRD) Bluerock Diamonds Plc Ord 1p share price was +0.25p at 9.5p