BlueRock DiamondsPlc said July 12 that it expects a recovery in grade and increased plantcapacity at its Kareevleiproject in South Africa, after modifying processes that contributed to a in grade during the first quarter.

Work at the mine was suspended in June, while the company undertooka strategic review and addressed inefficiencies.

The company said it identified further bottlenecks that, onceresolved, should additionally boost production. In line with this, BlueRock is consideringto buy a dense material separator that is nearly double in size of the one presentlyused.

BlueRock expects to restart operations in August, when the SouthAfrican department of mineral resources is due to assess safety changes to processingprocedures and guarding rails previously marked for improvement.

Following the department's inspection, a contractor of BlueRockhas withdrawn from its agreement as it could not meet certain requirements by theregulator. Therefore, BlueRock is presently pondering the economics and capitalrequirements for purchasing the contractor's plant in order to retain 100% of alldiamond revenues from the mine.

It noted that these revenue levels should outweigh the increasedoperating cost.