For the first quarter ended Sept. 30, 2001, the company recorded a positive operating margin from the Diamond Fields-Trans Hex Group joint venture’s trenching and block mining operations using the MV Ivan Prinsep mining vessel. Positive operating margin resulted from the sale by the joint venture of 5,258 carats during the quarter at an average price of $128.88 (U.S.) per carat for gross proceeds of $677,596 (U.S.). These proceeds are from diamonds recovered prior to Aug. 9, 2001, and sold before the end of the quarter.
The MV Namakwa replaced the MV Ivan Prinsep on Nov. 6, 2001, as the first vessel fully dedicated to the joint venture. The entire crew of the Ivan Prinsep was transferred to the Namakwa resulting in a smooth and cost-efficient transition. The Namakwa uses proven airlift technology with a more powerful 20-inch airlift system and an aggressive high-pressure water jetting system, both of which will enable greater throughput and should result in increased diamond recovery.
Horng Dih Lee stated, “We are now making money from our joint venture operations, and with the Namakwa having commenced full-scale mining on Nov. 6, 2001, we look forward to a significant increase in diamond recoveries and cash flow.”
During the quarter, the company also purchased 112,400 of its common shares from the open market at prices ranging from $1.50 (Canadian) to 65 Canadian cents per share, bringing the total number of shares purchased and cancelled under its normal course issuer bid to 117,500 common shares since the inception of the bid on June 1, 2001. Frank Waldron, chief executive officer and chairman of Diamond Fields, stated, “The company’s purchases under the bid are part of management’s strategy to maximize shareholder value and support our belief that there is a discrepancy between the current market price of DFI’s common shares and what we consider is a significantly higher inherent value in DFI and its assets.”
WARNING: The company relies upon litigation protection for “forward-looking” statements.
