About a year and a half after an accident that left the bottom half of its NamSSol mining system some 70 metres below water in the company’s Luderitz Bay grant off the coast of Namibia, Namibian Minerals‘ (NMR-T) MV Kovambo has resumed diamond production.
The vessel is now in action on Namco’s mining lease ML36A in Baker Bay, off the south coast of Namibian. The system’s mining rate will be boosted to full steam during the third quarter. Repairs to NamSSol and modifications to the MV Kovambo wrapped up ahead of schedule in May, and by the end of June, the system had proved itself in trial runs.
The resumption of mining with NamSSol represents a resurfacing for Namco. The marine diamond miner nearly drowned in early 2001, after the NamSSol seabed crawler became lodged on the seafloor. The device was eventually hauled to surface, but its undercarriage was left behind. While awaiting payment of insurance claims and repairs, Namco was forced to put its South African and Namibian Minerals subsidiaries into provisional liquidation to ward off hungry creditors and senior lenders.
In April of 2001, the Leviev Group of Israel pumped $27 million into the company to become its largest shareholder and sole marketing agent. The subsidiaries were subsequently discharged and limited production resumed. Still, the miner lost US$56 million in 2001 as revenue dove to US$12.5 million.
Namco CEO Greg Walker said in a prepared statement, “For the first time, Namco has both the NamSSol and the Nam 2 mining tools in operation and we anticipate a commensurate increase in diamond production over the remainder of the year.”
During the first three months of 2002, Namco produced 42,259 carats, representing a fourfold increase from a year earlier. The company realized US$147 for each carat sold, versus US$171 per carat a year earlier. The reversal was partially offset by an 11% decrease in marketing expenses.
Losses during the quarter tallied to just less than US$8 million (or US8 per share) on revenue of US$6.4 million, compared with losses of US$12.2 million (US26 per share) on US$4.7 million in the similar period of last year.
On May 24, the company was de-listed from the Nasdaq after its shares failed to exceed the minimum bid price of US$1. The company still trades on the Toronto Stock Exchange, and was fetching 21 per shares, up 7 following the news.
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