Namco calls shareholders to a vote

Namibian Minerals (NMR-T) is a step closer to raising US$15 million, having inked marketing and financing contracts with the Leviev Group of Israel.

The deals, aimed at preventing the company’s liquidation (T.N.M., April 2-8/01), are now awaiting the approval of regulators and shareholders. Following that, US$15 million will be released from escrow to Namibian and 37.7 million shares and 9.4 million warrants (exercisable at US40 or US50 each) will be issued to the Leviev Group.

The Leviev Group has also agreed to loan Namibian US$2.6 million in exchange for 15.2 million warrants. The loan is repayable in shares, valued at US33 apiece, and the warrants can be converted to shares at US33 over one year.

The Leviev Group will become Namibian’s largest shareholder, with a 39% equity interest. This excludes any dilution through the conversion or exercising of debentures or warrants.

A shareholder vote has been called for April 25.

Namibian notes that the two financings are sufficient to cancel the provisional liquidation agreements and allow mining and exploration activities to resume. They would also allow repairs to the NamSSol mining system to resume.

Namibian’s bankers have granted a debt-repayment moratorium until October and allowed the company to sell the MV Ivan Prinsep airlift vessel for US$4.4 million. Proceeds went to debt reduction.

Similarly, a group of South African creditors has waived repayment rights for 12 months. The group is owed US$6 million.

Meanwhile, partners Trans Hex Group and Diamond Fields International (DFI-T), which bought the MV Ivan Prinsep, now expect to begin production on mining licence 111 by mid-June, more than five months ahead of schedule. Mining will focus on the Marshall Fork feature, which is an extension to the deposit mined by Namibian.

According to the joint-venture agreement, Trans Hex must provide two conventional airlift vessels in return for a share of the production proceeds. The second ship is expected to set sail no later than mid-November.

Trans Hex, which has been mining alluvial diamonds for more than two decades, will manage the project. Marketing is left to Diamond Fields, though Trans Hex maintains an advisory role.

Resources at mining licence 111 are pegged at 6.1 million cubic metres containing 1.1 million carats (including 81% defined as probable reserves). A cutoff grade of 0.15 carat per sq. metre was used.

Production in the first year is expected to exceed 65,000 carats.