Higher prices and a slight increase in the size of recovered diamonds helped
The company posted earnings of US$2.2 million (or 5 per share) on revenue of US$12.2 million for the three months ended March 31, compared with US$5.2 million (14 per share) on US$11.7 million a year earlier.
The company’s number of issued shares increased by 22% between the two periods. The equity was issued to fund the US$60-million acquisition of Ocean Diamond Mining Holdings (ODM).
Diamond production during the recent quarter totalled 52,900 carats, down from 116,000 carats a year ago. Mining focused on mining licence 36, which was obtained in the ODM deal. The average diamond size recovered during the first quarter was 0.35 carat, up from 0.33 carat in the corresponding period of 1999. The average realized diamond price increased 27% between the two periods, to US$182 from US$143 per carat.
Unit cash operating costs, including royalty and marketing, were US$104 per carat, up from US$52 per carat. The increase was attributed to the introduction of three additional vessels.
During the quarter, MV Kovambo, the support vessel for NamSSol, continued mining on licence 36 on the edge of the 2.4-sq.-km Halifax Basin, where ODM previously recovered more than 140,000 carats from depths of up to 3 metres in just 0.5 sq. km. The vessel is testing mining conditions and grade estimates in lower-grade areas along the edges of the basin.
The company expects production to increase in the second half of the year following a US$4-million upgrade to the airlift operation vessels and the commissioning, in the third quarter, of Nam II, the new 170-ton ocean diamond-mining system.
At March 31, the company had US$10.4 million in cash and 19,500 carats in diamond stocks, down from US$20 million and 32,500 carats in the fourth quarter of 1999.
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