Sunday, April 29, 2012
Namakwa Diamonds Revenues Plummit
Namakwa Diamonds reported that revenues fell 60 percent year on year to $17 million during the six months that ended February 29, 2012 after shifting its focus to mining development.
“The first half of the financial year has been about the successful execution of our stated strategy to restructure the group’s platform to provide for a mining operation underpinned by sustainable commercial production from the Kao Mine,” said Richard Collocott, Namakwa’s chief executive officer (CEO).
He added that the company is on track to become the biggest producer of diamonds in Lesotho within the next 12 months and that the mine would become cash generative in the second half of the fiscal year.
The company posted a net loss of $15 million, declining from a net loss of $10.9 million recorded a year earlier.
During the year, Namakwa saw a change in management and focused its finances on developing the Kao mine in Lesotho, while reducing the scale of its operations in South Africa’s North West province to provide a cash generative platform. Namakwa also significantly reduced its trading and beneficiation unit, closing its operations in Kinshasa, Tel Aviv and Gaborone and selling its cutting and polishing business in Johannesburg.
Production at Kao was launched in November 2011 and the mine began commercial production in March this year. During the six months, 26,558 carats of diamonds were recovered from the mine while 26,906 carats were sold for an average price of $214 per carat. As of April 24, Namakwa reported that it sold 33,384 carats at an average price of $218 per carat.
The company reduced its production forecast at the Kao mine for the full fiscal year to 170,000 carats.
Production at Namakwa’s South Africa-located alluvial mines fell 37 percent to 11,069 carats during the fiscal half year, and output is expected to reach 20,000 carats for the full year. The average price of goods sold from the North West operations declined by 2 percent to $632 per carat, while the average cost at operations was halved to $589 per carat.
Namakwa shares rose by less than one percent following the announcement and ended Friday at 3.53 pence in London. The share was at 51 pence a year ago.