On May 16th, BlueRock announced that it was in negotiations with a member of the Teichmann Group to provide the quantity of ore necessary to meet BlueRock's production plans. Teichmann is a pan-African civil engineering and mining group with over 1,800 employees. Teichmann's extensive experience in mining operations is expected to significantly de-risk BlueRock's mining activities and allow BlueRock to meet its production targets in a cost-effective manner.
The Teichmann contract is for a period of five years commencing with an effective start date of July 1st, 2019, to provide the following services at the levels required to meet the BlueRock's production plans:
- To extract ore, waste and haul to stockpile;
- Where required, to break down ore to the required size; and
- To deliver ore to the processing plant.
Unlike the agreement with the previous provider of these services, which was paid on an hourly basis with a minimum number of hours guaranteed, Teichmann will be paid almost entirely on a cost per tonne basis. Accordingly, the effective cost per tonne is reduced with the planned increased production.
Based on the lower end of BlueRock's current production expectations, the estimated cost of Teichmann's services for the 12 months ending June 30th, 2020, will be approximately ZAR 21 million (US$1.4 million).
Mike Houston, executive chairman of BlueRock Diamonds, commented: "I am delighted that we have now finalised terms with Teichmann. Teichmann have been on site since July 1st as was planned and we have established a good working relationship.
"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. 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."