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UPDATE - Richland ends tanzanite link with retail closure

Last updated: 00:24 03 Feb 2015 AEDT, First published: 01:24 03 Feb 2015 AEDT

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--adds broker comment, share price--

Richland Resources (LON:RLD) has ended its interest in the tanzanite business with the closure of its retail operations in Tanzania.

All its efforts will now be directed toward the Capricorn Sapphire mine in Queensland, Australia.

Richland had already sold its mining operation in Tanzania to Sky Associates, but this did not include the retail side of the business and without the link to the tanzanite mines it could not find a buyer.

It will sell the retail arm's stone and jewellery inventory and does not expect any material cost from the closure.

Bernard Olivier, chief executive, said: “The decision forms part of our strategy to complete the sale of our Tanzania operations and focus on the commissioning of our blue and coloured sapphire mine in Queensland Australia.

"Richland is strongly committed to the certificated gemstone model and we look to applying our expertise in coloured gemstone mining to our sapphire assets during 2015."

Broker RFC Ambrian added that first production from the sapphire operation is targeted for the current quarter.

The sapphire project benefits from an existing processing plant and associated infrastructure, having been mined by Australis for an 11-month period to August 2005 and Richland has targeted production of 100Mct over an eight-year mine life.

Sky Associates will take on the tanzanite liabilities leaving Richland free of borrowings going forward.

Shares fell 0.29p to 1.33p.


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