A disaster early in the year left
Namibian’s loss, which translates into 40 per share, was basically split between the first and second quarters. By comparison, the company earned US$3.3 million on revenue of US$21.9 milion in the first two quarters of 2000.
In January of this year, Namibian’s NamSSol seabed crawler was damaged while operating off the coast of the southwest African nation. The loss in production left the company with insufficient cash flow to meet debt obligations, forcing it into provisional liquidation.
Namibian has since raised US$29.6 million on the market, resulting in the release of its subsidiaries from provisional liquidation. Moreover, the Nam2 mining submersible, which can cover twice as much seabed as its predecessor, is making its rounds on the ocean floor, as is the Namibian Gem airlift vessel.
Meanwhile, Namibian has been granted its insurance claim for the NamSSol mining system, though discussions on the business interruption claim continue. Repairs to NamSSol are ongoing, with the crawler expected to resume operations in the fourth quarter.
Nevertheless, production in the first half topped a mere 24,500 carats, about one-quarter of that produced a year ago. Moreover, the stones fetched only US$164 per carat, versus US$185 per carat last year, accounting for some of the financial losses.
Production has subsequently improved, with output in the current quarter having already exceeded the second quarter’s output of 13,800 carats. The renewal of resource sampling should hasten the turnaround.
On June 30, Namibian had a working capital deficiency of US$27.9 million and US$50 million in debt. The number of shares outstanding totalled 76.2 million, most of which were held by the Leviev Group of Israel.
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