Key points
- Namco’s October 1999 acquisition of ODM included 20,000 square kilometres of concessions, mining licence 36 (362 square kilometres), three vessels and $10-million (U.S.) in cash.
- ODM’s production for November and December 1999 was 17,200 carats, a 30 per cent increase over the same months in 1998.
- Namco’s overall first-quarter diamond prices rose from $156 (U.S.) per carat in the fourth quarter of 1999 to $169 (U.S.) in the first two months of 2000.
- The new vessel MV Zacharias began geophysical surveys on mining licence 36, with a two-month program to survey 3,000 line kilometres.
Continued progress has been made in the integration and development of mining and
exploration activities of recently acquired African ocean diamond producer
Ocean Diamond Mining Holdings Ltd (ODM).
In the acquisition, completed in October, 1999, Namco secured an
additional 20,000 square kilometres of ocean diamond concessions including mining licence
36 in Namibia (362 square kilometres), three vessels and $10-million (U.S.) in cash. ODM’s fiscal
1999 production was 64,000 carats. As previously reported, Namco immediately
initiated productivity improvements by increasing the supply of spares and
dedicating all three vessels to mining. ODM’s production for November and
December, 1999, was 17,200 carats, representing a 30-per-cent increase on the comparable
months in 1998. Similar performance has continued in 2000.
Ninety-five per cent of ODM’s production is gem quality and size distribution continues to
meet expectations. Namco’s overall first quarter diamond prices have
significantly improved from $156 (U.S.) in the fourth quarter of 1999 to $169 (U.S.) in
the first two months of 2000. This increase is attributed to strong diamond
demand and to the slightly larger average stone sizes recovered from ODM’s
mining licence.
Namco’s new vessel, the 2,500-ton MV Zacharias, started geophysical
surveys over parts of mining licence 36 earlier this month. Equipped with the
latest advances in geophysical equipment, MV Zacharias has the capability to
survey previously inaccessible sediments up to 12 metres thick. The two-month program will survey 3,000 line kilomtres and, combined with exploration data, will
provide detailed information on ocean floor topography for future mine
planning and resource evaluation.
A $4-million (U.S.) upgrade is planned for MV Namibian Gem and MV Ivan Prinsep
in the second and third quarter respectively. This includes the improvement of
the two airlift mining systems onboard MV Namibian Gem, installation of
security systems and complete engineering overhauls to both vessels.
Refurbishment of existing mining equipment was completed on MV Oceandia in
March.
Group production rates are expected to improve as technical enhancements
progress on the two ODM vessels, as Namco’s 140 tons NamSSol mining system is
deployed in mining licence 36 and when Nam II, the next generation mining
system, enters production in the second half of the year. It is expected that
quarterly production and revenue figures will therefore vary substantially
over the year.
This quarter, MV Kovambo, the support vessel for NamSSol, commenced
operations in lower grade areas of mining licence 36. Mining has concentrated
on the edges of the 2.42 square kilometre Halifax Basin, a sediment filled depression
where more than 140,000 carats were previously recovered by ODM in less than
0.46 of a square kilometre, using airlift technology limited to mining sediment depths to three metres.
“We acquired ODM for the potential of its concessions. Our confidence in
these concessions is already fully justified and we intend to unlock further
value through exploration later this year,” said chairman and chief executive officer Alastair
Holberton.
Namco currently holds 97.7 per cent of ODM. An application to delist ODM from the
Johannesburg Stock Exchange has been filed.
The company’s 1999 annual report and accounts will be posted to
shareholders in early April. First quarter results will be announced in May.
