Richland Resources issues sales, marketing update

Richland Resources is excited with the recent progress made with its vertical-integration strategy following the completion of a comprehensive sales and marketing review process.

"Not only have our test sales demonstrated that we are able achieve significant margins through beneficiation, but we are also able to increase our sales base by supplying a final cut and polished product, especially for our range of fancy sapphires," said chairman Edward Nelson.

"The securing of the beatification relationships was a key milestone in implementing our sales strategy. I would also like to highlight the encouraging decrease in Capricorn Sapphire's operating costs versus the increase in sales already achieved for the current quarter to date," he said in a statement.

HIGHLIGHTS:

- Capricorn Sapphire has initiated a vertical integration strategy through the beneficiation of its product following a comprehensive sales and marketing review process.

- The review highlighted: a reluctance by traditional untreated blue sapphire wholesale dealers to diversify into non-blue sapphire despite retail and consumer interest; higher margins are achievable through beneficiation; beneficiation will result in a significant widening of the Company's sales base and market exposure

- Bangkok-based Anthony Brooke and Gem Dreams Co., Ltd ("Gem Dreams") were engaged during Q3 2016 are now developing and implementing Capricorn Sapphire's vertical integration strategy. Through Capricorn Sapphire's newly established association with Anthony Brooke and Gem Dreams, the following beneficiation relationships have been entered into: securing of the preferential use of a specialist sapphire heat treatment facility for Capricorn Sapphire's product, located in Chanthaburi, Thailand on a fixed price per carat contracted basis; preferential use of a Bangkok based cutting and polishing facility also on a fixed price per carat commercial terms

- Approximately 3,000 carats of predominantly fancy and multi-coloured sapphires from Capricorn Sapphire's mining operations have already been treated, cut and polished through the treatment and cutting facilities to date

- Total Q4 2016 sales of US$379,000 to date, comprising both: rough untreated material; test sales of both heated as well as cut and polished non-blue sapphires

- Capricorn Sapphire's total operational cost, inclusive of heating, cutting and polishing costs, are below US$1 per carat for Q4 2016 to date.

At 9:54am: (LON:RLD) Richland Resources share price was 0p at 1.25p