The announcement of its production and sales results for the third quarter ending November 30th, 2015 tells a difficult future for the company. In fact, production went down from 10,228 carats produced in Q3 2015 to 3,990 carats in Q3 2016. Similarly, the value of diamonds sold at US$ 5.3m was 66 per cent lower than that US$ 15.8m achieved in the same period last year, Sales by volume fell 71 per cent from 13,759 carats solds in Q3 last fiscal to 4,021 carats this year. Middle Orange River carat sales were down 28 per cent quarter-on-quarter to 3,823 carats, and the value of these goods declined 48 per cent to US$ 5.0 million, says the report.
The company report further elaborates in the matter, “Average carat price realised from the Company's MOR projects declined by 28 per cent quarter-on-quarter, to US$ 1,295 per carat reflecting general market weakness, and sub threshold processing volumes for the recovery of larger stones at RHC.”
In view of the above dismal performance, the company has plans to restructuring. As the report says, “In order to ensure the economic sustainability of the business, we have also implemented a corporate restructuring and cost saving measures, which will see a flatter reporting structure and will eliminate annual costs of at least C$ 800,000.”
Moreover, as part of the “restructuring”, section 189 notices were issued to all employees on January 5, 2016. “Consultation processes have commenced internally and the outcome will affect a number of employees, with the real impact to be assessed during the consultation process,” the Company declared in its announcement.