Namibian Minerals nine-month results

All results are in U.S. dollars.

Namibian Minerals had strong

earnings for the nine months ended Sept. 30, 1999, attributed to the

strength of its production, continued cost control and positive growth in the

diamond market.

Nine month highlights:

earnings of $16-million, 42 cents per share, on revenues of

$35-million;

average sales price rose 7 per cent to $159 per carat;

diamond production of 207,800 carats;

acquisition of Ocean Diamond Mining Holdings Ltd., Africa’s

third largest marine diamond producer;

joint venture agreement with German engineering group Wirth to develop

exploration technology for operation in 2000.

Earnings for the nine months ended Sept. 30, 1999, were $16.0-million, 42 cents per share, compared with a loss of $4.0-million, 10 cents per

share, for the nine months ended Aug. 31, 1998.

Revenues from the sale of 229,300 carats rose to $34.4-million from

$4.8-million in the year earlier period. In the third quarter, sales of

78,100 carats generated revenues of $12.4-million (1998: $4.8-million) for

an average sales price of $159 per carat, an increase of 7 per cent on the previous

quarter’s diamond price.

Diamond production for the nine months was 207,800 carats. Namco’s 1999

production target is 260,000 carats. Production for the third quarter at

15,700 carats was in line with expectation after the company completed a port

call in July and August for biennial classification of its mining vessel MV

Kovambo, installation of an upgraded launch and recovery system and

enhancements to the seabed crawler NamSSol’s undercarriage and suction boom.

Following a further two weeks of commissioning, NamSSol resumed full

operation. The company has cancelled its previously scheduled October port

call and production should benefit from a full fourth quarter performance.

Namco chairman and chief executive officer, Alastair Holberton, said: “We enter the final

quarter confident of doubling our 1998 production of 126,000 carats by year-end. Our NamSSol technology has proved to be a major development for the

marine diamond industry.”

Operating cash flow for the nine months was $20.6-million. This

cash flow has been reinvested in capital items ($7.3-million) including the

enhancements to NamSSol and its launch and recovery system ($4-million) and

initial expenditure on Nam II, the company’s second marine diamond mining

system ($2.6-million).

The company also spent $14-million from cash flow to acquire its 34-per-cent

shareholding in ODM, Africa’s third largest marine diamond producer. Diamond

stocks at period end had a gross revenue value in excess of $1-million.

Subsequent to quarter end, Namco announced that its offer for ODM had

successfully closed with ownership of 92 per cent of ODM shares. ODM’s assets include

20,000 square kilometres of marine diamond concessions, three mining vessels, $10-million in cash and no debt. Namco’s technological and operational expertise

is expected to substantially boost current production levels (year ended 1999:

64,000 carats). Namco financed the offer through a mix of its own cash

resources, debt and new equity. Subsequent to quarter end, the company

completed a private placement of 2.7 million shares to raise an additional

$11-million. Dilution will be less than 15 per cent of the shares in issue at

quarter end. Cash resources in the enlarged group following the placement are

in excess of $20-million.

Following assessment of exploration results in the Hottentot Bay grant,

Namco increased its total estimated resources to 2.9 million carats. This

comprises 942,000 carats of measured resources, 484,000 carats of indicated

resources and 1,537,000 carats of inferred resources. Further exploration is planned for next year with the development of a $1.5-million exploration tool, which is currently being built by Wirth of Germany, a pioneer in seabed drilling technology.

Namco does not currently anticipate that it will experience any significant distruption to its busienss as a result of Year 2000 issues and has contingency plans in place.

“Our focus on earnings growth, strategic acquisition and innovative technological development is proving highly successful. We continue to benefit from excellent performance in these areas,” said Mr. Holberton.