, which owns and operates the Kareevlei Diamond Mine in South Africa, announced on Tuesday that it had inked a contract with Teichmann South Africa, a pan African civil engineering and mining group with over 1,800 employees.
The contract between the two parties will see Teichmann mining the ore at BlueRock’s Kareevlei mine in the Kimberely region.
The signing follows negotiations from May this year which encompassed plans for Teichmann to provide the ore necessary to aid BlueRock’s production plans.
Mike Houston, Executive Chairman of BlueRock Diamonds commented, "I am delighted that we have now finalised terms with Teichmann. Teichmann has been on site since 1st July as was planned and we have established a good working relationship.”
With its extensive experience across a multitude of mining operations, Teichmann is considered a more than appropriate partner to de-risk mining activities significantly and, as a result, is expected to allow BlueRock to meet its production targets in a cost-effective manner.
Shares saw an increase of almost 9% following this morning’s news.
In order to meet the production plans efficiently, the contract, which will serve a five year period commencing on 1 July 2019, will include extracting ore, waste and haul to stockpile, breaking down the ore to the required size and delivering it to the plant.
Unlike their previous provider, Teichmann will be paid almost entirely on a cost per tonne basis for their services and, accordingly, the effective cost per tonne is reduced with the planned increased production.
Overall, Teichmann’s services for the 12 months ending 30 June 2020 is expected to be approximately GBP 1.179 million.
Mr Houston acknowledged the larger implications of a new finalised contract with Teichmann Group, stating: “The upgrading of our mining operation is key to the overall success of the business and having an experienced mining contractor is an essential part of this process.”
He further added: “I believe that our partnership with the wider Teichmann Group will provide further benefits going forward as we continue to implement our defined growth strategy."
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