Namco nabs Ocean Diamond Mining

The world’s second-largest producer of marine diamonds just got bigger. Namibian Minerals (NMR-T), or Namco, has acquired a 92% interest in Ocean Diamond Mining, a fellow marine producer based in South Africa.

The interest, which is equivalent to 27 million shares, gives Namco access to 20,000 sq. km of marine concessions off the coast of South Africa and Namibia. These range from grassroots exploration to proven reserves.

Says Namco Chairman Alastair Holberton: “Our technology and operational expertise will substantially boost Ocean Diamond’s production.”

Ocean Diamond is expected to produce 80,000 carats in 1999. In addition to its marine concessions, its assets include three airlift mining vessels and US$10 million in cash.

For the shares, Namco paid about US$30 million by way of debt and internal cash, and issued 3 million of its own shares. The deal, combined with a separate issuance of 2.7 million shares to raise US$11 million for general purposes, has reduced Namco’s market capitalization by 14.1% and increased its cash resources to more than US$20 million.

Meanwhile, Namco has reported earnings of US$16 million (or 42 cents per share) for the nine months ended Sept. 30, compared with a loss of US$4 million in the comparable period of 1998. Revenue between the two periods rose US$34.4 million from US$4.8 million.

The alluvial miner produced 207,800 carats in the first nine months of 1999, of which 15,700 carats were produced in the third quarter. It expects to have cranked out 260,000 carats by year-end.

Operating cash flow topped US$20.6 million in the recent period, all of which was reinvested, and the company still had US$1 million in diamond stocks at Sept. 30.