TanzaniteOne posts half-year profit, output up 21%

We publish courtesy of Mining Weekly

Author: Chanel de Bruyn

JOHANNESBURG (miningweekly.com) – Aim-listed TanzaniteOne produced 1,05-million carats of tanzanite in the first half of 2010, up 21% on the 867 381 ct produced in the first half of 2009.

The gem miner on Monday reported a return to profit, recording a $705 000 after-tax profit in the six months ended June 30, 2010, up from a net loss of $580 000 in the six months ended June 2009.

Revenues were up 74% to $8,6-million in the first half of this year, compared with the $4,9-million in revenues earned the year before.

The sale of 855 847 ct of rough tanzanite, at an average price of $8,07/ct, contributed $6,91-million to overall revenues for the six months.

The balance of the revenue was earned from the sale of cut stones, TanzaniteOne told shareholders in a statement, noting that its own cutting, polishing and sales division was providing a growing revenue stream.

Higher tanzanite prices and improvements in the quality and quantity of tanzanite production had also led to an improved gross margin for the company, the world’s largest miner of the rare gemstone reported.

Meanwhile, the gem miner noted that it was still negotiating with the government of Tanzania with regard to the development of domestic cutting operations, following a ban on the export of rough tanzanite larger than 5 ct implemented earlier this year.

In August, TanzaniteOne announced that it would be allowed to export all its rough tanzanite production, including stones larger than 5 ct, until December 31, while it evaluates the development of local cutting operations.

The company plans to expand its in-house cutting and training capabilities through existing relationships with overseas experts, in addition to entering into agreements with external beneficiation companies in Tanzania.

The company was targeting the production of 2,2-million carats of Tanzanite for the 2010 full year.

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