TIDMNAD
RNS Number : 6352S
Namakwa Diamonds Limited
23 November 2011
23 November 2011
Namakwa Diamonds Limited
Refinancing Approval, Kao Commissioning Ramp-up & Trading
Update
Namakwa Diamonds Limited ("Namakwa" or the "Company") today
announces:
Key Highlights
-- Conversion of US$16.03m trading debt owed to Jarvirne Limited
into 66,791,667 new ordinary shares, approved by shareholders (the
"Capitalisation").
-- Capitalisation results in US$40m two-year secured term loan,
of which US$23m has been drawn, continuing to remain available to
the Company and secures Namakwa's financial requirements to take
the Kao Project into commercial production.
-- Commissioning of the 500tph DMS plant at Kao underway, with
the first kimberlite ore processed and first diamonds recovered.
Commercial production expected in the first quarter of 2012.
-- Restructuring of the North West Province alluvial mining
operations demonstrating results, with a positive cash operating
margin (excluding restructuring costs) for the current FY2012
year-to-date.
-- Claim against the Company in Lesotho heard in mid-November
2011. Management remain confident in the Company's defence and look
forward to the ruling from the Court in due course.
Commenting Edward Haslam, Chairman, said: "Following a
challenging period in Namakwa's evolution, we are pleased to
announce that shareholders have approved the capitalisation
transaction with financier and shareholder, Jarvirne.
"The commissioning of the Kao kimberlite project in Lesotho is
well underway, with the plant processing its first kimberlite ore
this week, thereby de-risking the financial and operational burdens
faced by the Company in recent months.
"The Company can now look forward to a period of stability and
growth under the stewardship of Richard Collocott, as Namakwa's
Chief Executive Officer. We all look forward to a period of
accretive growth for shareholder value, as Richard and the
management team execute the Company's stated strategy to develop
the Kao kimberlite project."
For further information please visit www.namakwadiamonds.comor
contact:
Namakwa Diamonds Tavistock Communications
Richard Collocott +27 11 334 8886 Simon Hudson +44 20 7920 3150
+44 7974 453
Ryan Barrow 954 Simon Compton +44 20 7920 3150
Liberum Capital
Michael Rawlinson +44 20 3100 2000
Clayton Bush +44 20 3100 2000
Capitalisation of US$16.03m Trading Debt - Approved by
Shareholders
At the Special General Meeting of shareholders held today, the
Capitalisation of a US$16.03m trade debt owed to Jarvirne Limited
("Jarvirne") was approved. As a result, an additional 66,791,667
ordinary shares in the capital of the Company will be issued and
allotted, fully paid, to Jarvirne at a deemed price of 15p per
share, representing a 150% premium to the closing market price of
the Company's shares on 22 November 2011. Application has been made
to the UK Listing Authority and the London Stock Exchange for the
new shares to be admitted to the Official List and to trading on
the London Stock Exchange's main market for listed securities.
Admission is expected to take place at 8.00 a.m. on Monday 28
November 2011. The new shares when issued, will rank pari passu
with all other ordinary shares in the capital of the Company.
Following the issue and allotment of the new ordinary shares,
Jarvirne will own 98,665,158 shares in the capital of the Company,
representing 32.46%. As part of the capitalisation transaction,
independent shareholders approved the waiver of a requirement for
Jarvirne to make a mandatory bid for the remaining outstanding
shares in the Company, having crossed the 30% bid threshold under
the Company's Bye-laws. Jarvirne has entered into a relationship
agreement with the Company (conditional only upon admission of the
new shares to trading) to manage the conduct of the parties, whilst
Jarvirne holds more than 30% of the issued share capital of the
Company.
Liberum Capital acted as Sponsor, Financial Advisor, and Sole
Broker in respect of the transaction. Further details on the voting
statistics for this transaction can be found below.
Kao Project, Lesotho - Commissioning Update
The Company is pleased to announce that as part of the
commissioning phase, the 500tph processing plant at the Kao Project
has processed its first kimberlite and recovered its first
concentrate this week. Storm Mountain Diamonds, the operating
company for the project, expects nameplate capacity to be reached
in the first quarter of the 2012 calendar year. Thereafter, the
project is expected to produce an estimated 200,000 carats in
FY2012 from 2.5Mt of kimberlite ore processed.
Remaining capital and operational expenditure to achieve
commercial production at Kao is secured by a US$40m two-year
facility entered into with Jarvirne in September 2011, of which the
Company has drawn US$23m to-date. The first sale of diamonds from
the ramp-up phase of production is expected to be held in the new
year.
Lesotho Litigation - Update
Between the 14(th) and 18(th) November 2011, the Company was a
party to a hearing in the High Court of Lesotho in respect of the
claim by Batla Minerals SA and, its subsidiary, Toro Diamonds (Pty)
Ltd against Namakwa for the joint registration of the Company's
62.5% equity interest in Storm Mountain Diamonds (Pty) Ltd.
Management remains confident of the Company's defence and look
forward to the Judge's ruling. A further update will be provided to
the market in due course.
North West Province, South Africa - Phase 1 Restructuring
Completed
The Company has completed the first phase of its planned
restructuring of operations on the North West Province alluvial
project area, with immediate operational cost savings from the
retrenchment of c.75% of the workforce. Namakwa's operations have
now been scaled back on the South East Node and Northern Node and
shift patterns adapted, to facilitate mining operations for 24
hours a day between Monday and Saturday, and scheduled maintenance
on the weekends. This departure from the three-shift workforce
required for a 24/7 operation, is demonstrating immediate results
with positive operating cash margins for the year-to-date.
As at 22 November 2011, the project area had produced 6,094
carats from 835,522 tonnes, at an average grade of 0.73cpht. The
production target for this project area for FY2012 remains at
20Kcts.
Results of the Special General Meeting
The Company is pleased to announce the results of its Special
General Meeting of Shareholders held at 10am in London on Wednesday
23 November 2011. Resolutions 1 to 4 were proposed as ordinary
resolutions and Resolution 5 was proposed as a special resolution.
Jarvirne was required to abstain from voting in respect of
Resolutions 3 and 4.
Resolution Votes (%) Votes Against (%) Abstain
For
1. To authorise the increase
in the authorised share
capital of the Company 109,176,692 75.9 34,673,445 85.7 155,871
------------ ----- -------------- ----- --------
2. To authorise the allotment
of ordinary shares in
connection with the Capitalisation 109,176,692 75.9 34,673,445 85.7 155,871
------------ ----- -------------- ----- --------
3. To authorise the Capitalisation
and the Waiver and Amendment
Letter as related party
transactions under the
Listing Rules 109,176,692 75.9 34,673,445 85.7 155,871
------------ ----- -------------- ----- --------
4. To approve the allotment
of the ordinary shares
referred to in Resolution
2 as if the Takeover Code
applied to the Company
and the "whitewash" provisions
were available in relation
to the Capitalisation 109,176,692 75.9 34,673,445 85.7 155,871
------------ ----- -------------- ----- --------
5. To authorise, subject
to the passing of Resolution
2, the disapplication
of
pre-emption rights (as
defined in the Company's
Bye-laws) in respect of
the allotment referred
to in Resolution 2 109,176,692 75.9 34,673,445 85.7 155,871
------------ ----- -------------- ----- --------
Notes to the disclosure
Any proxy appointments which gave discretion to the Chairman
have been included in the "For" total. A vote withheld is not a
vote in law and is not counted in the calculation of proportion of
votes "For" or "Against" a resolution. Unless the context otherwise
requires, terms defined in the combined prospectus and circular
published by the Company in respect of the Special General Meeting
have the same meaning in this announcement. A certified copy of the
above resolutions has been submitted to the National Storage
Mechanism and will shortly be available for inspection at
www.hemscott.com/nsm.do
Interim Management Statement - Q1'FY2012
The Company expects to release its interim management statement
for Q1'FY2012 on Thursday 12 January 2012.
About Namakwa Diamonds Limited
Namakwa is a diamond resource group, which seeks to extract
maximum value from the marketing, distribution and sale of Group
mined and contracted production through a Trading &
Beneficiation platform with access to the international wholesale
markets.
The Group's Mining Division is focused on the Kao Project in
Lesotho, the 4th largest individual kimberlite pipe in South Africa
and Lesotho, anticipated to come into commercial production in the
first quarter of the calendar year in 2012, and the only one mining
at or near surface. Operated by Storm Mountain Diamonds and its
leading hard-rock mining team, with a proven track record in the
construction and development of Lesotho's leading kimberlite pipes,
the Kao kimberlite project presents a 186Mt resource of c.13m
carats (c.4m indicated and c.9m inferred), of which Namakwa holds a
62.5% interest.
The Group also maintains alluvial mining operations in the North
West Province of South Africa and a portfolio of exploration and
development projects in the Northern Cape Province of South Africa
(alluvial) and offshore concessions in Namibia (marine), with a
combined resource base of c.7m carats (indicated and inferred).
----ends----
This information is provided by RNS
The company news service from the London Stock Exchange
END
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