Namakwa says restructuring paying off as it names new CEO
The restructuring of London-listed Namakwa Diamonds’ operations in Lesotho and South Africa has been credited for helping to turn the group’s mining operations into a cash-positive position.
Outgoing CEO Richard Collocott said last week that the strategy reduced costs and positioned the company for the next stage of development.
Namakwa, which aims to turn its Kao mine, in Lesotho, into a significant kimberlite production asset, started restructuring following Collocott’s appointment as CEO in September. But Collocott has resigned and is to be replaced by Theo Botoulas.
“Recent discoveries of a number of high-value, special diamonds by both Namakwa and contractors demonstrate support for the restructured business model operating on a breakeven basis, with the scope for significant upside from the recovery of such specials,” Collocott added.
Further, following the repayment of the group’s $45.44-million debt from the proceeds of the recent $55-million open offer and the availability of sufficient working capital, Namakwa is now well positioned to develop its operating platforms in Lesotho and South Africa.
“In the coming months, the group’s focus will be on optimising value from current operations and further cost reduction at both the corporate and mine level,” said Collocott.
During the three months to May 31, the group’s flagship Kao mine, which turned cash-flow positive in June, produced 42 348 ct, with sales reaching 22 865 ct at an average price of $350/ct.
The company said it was on track to achieve its targeted production of 150 000 ct for the 2012 financial year as operations continued to be ramped up. A second new crusher was commissioned into the tertiary crushing circuit during June, while the construction of the water pipeline, which would provide an additional source of process water for operations, as well as a repaired scrubber, would be commissioned mid-July.
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