Key points
- Revenue from diamond sales rose to $5,656,000 on 35,461 carats sold, up from $1,482,000 on 9,120 carats in the second quarter of 2001.
- Operating cash outflow for the quarter was $2,939,000, compared with $4.74 million a year earlier, leaving the company with $2.5 million in cash and 28,739 carats of diamond stocks at quarter end.
- The MV Ya Toivo, MV Namibian Gem and MV Kovambo produced 33,510, 8,471 and 1,235 carats respectively, with commissioning of the Kovambo support vessel beginning in June 2002 after repairs to the NamSSol I mining tool were completed.
- CEO Greg Walker said the company still requires additional funding and is in discussions with its senior lenders and principal shareholder, LL Mining Corporation BV, which it expects to conclude in the third quarter.
Namibian Minerals has recorded a loss for the second quarter ended June 30, 2002.
The loss for the quarter was $24,954,000 (U.S.) or 25 U.S. cents per share (2001: $12,871,000 (U.S.) or 17 U.S. cents per share). Included in the loss was a good will impairment provision of $15,685,000 (U.S.) or 16 U.S. cents per share, which resulted from continuing losses and cash outflows from operations. Revenues of $5,656,000 (U.S.) were earned through the sale of 35,461 carats, compared with revenue of $1,482,000 (U.S.) from diamond sales of 9,120 carats for the same period in 2001. Operating cash outflow for the quarter was $2,939,000 (U.S.), compared with $4.74-million (U.S.) for the same period in 2001. At the end of the quarter, the company had $2.5-million (U.S.) in cash with diamond stocks of 28,739 carats.
The repairs to the NamSSol I mining tool were completed and the commissioning of the MV Kovambo, the support vessel for the NamSSol tool, commenced in June, 2002. During the quarter, the company’s mining production vessels, the MV Ya Toivo and MV Namibian Gem, were in operation and produced 33,510 and 8,471 carats, and the MV Kovambo produced 1,235 carats. Production during the first half of the year exceeded the total production for 2001.
“The return of the MV Kovambo to operational status is a very pleasing and significant development for Namco,” the company’s chief executive officer, Greg Walker, said. “We anticipate further improvements in diamond production and the company’s revenue position during the third quarter. The company still requires additional funding to support its resource development program and discussions are continuing with the company’s senior lenders and principal shareholder, LL Mining Corporation BV. We anticipate the negotiations will be concluded during the third quarter,” Mr. Walker said.
STATEMENT OF OPERATIONS
AND RETAINED (DEFICIT) EARNINGS
Three months ended June 30
(thousands of U.S. dollars)
2002 2001
Income
Revenue from
diamond sales $ 5,656 $ 1,482
Interest earned 57 92
Gain (loss)
on marketable
securities – (7)
——— ———
5,713 1,567
——— ———
Expenses
Direct
production
costs 9,570 8,435
Royalty
payment 493 120
Marketing costs 210 41
General
office costs,
including
salaries 1,205 1,036
Amortization
Capital assets 2,236 2,286
Deferred costs 315 372
Interest
Long-term debt 2,056 1,048
Other 4 (3)
Corporate
finance fee – –
Loss on
disposal of
capital assets 3 –
——— ———
16,092 13,335
——— ———
Unusual items
Proceeds from
insurance claim 902 –
——— ———
(16) 700
——— ———
Provisional
liquidation
costs 886 700
——— ———
(Loss) for the
period before
income taxes
and good will (9,493) (12,468)
Recovery of
income taxes 224 200
——— ———
(Loss) for
the period
before good will (9,269) (12,268)
Good will
amortization and
impairment (15,685) (603)
(Loss) for
the period (24,954) (12,871)
(Deficit)
retained
earnings
at beginning
of period (65,398) (13,960)
Cancellation
of warrants 295 –
Adjustment
to conversion
privileges – –
Retained
(deficit)
— end of
period (90,057) (26,831)
========= =========
Basic (loss)
earnings
per share
for the period
before good will $ (0.09)$ (0.16)
========= =========
Basic (loss)
earnings
per share
for the
period after
good will $ (0.25)$ (0.17)
========= =========
Fully diluted
(loss) earnings
per share for
the period $ (0.25)$ (0.17)
========= =========
STATEMENT OF OPERATIONS
AND RETAINED (DEFICIT) EARNINGS
Six months ended June 30
(thousands of U.S. dollars)
2002 2001
Income
Revenue from
diamond sales $ 12,034 $ 6,210
Interest earned 76 114
Gain (loss)
on marketable
securities – –
——— ———
12,110 6,324
——— ———
Expenses
Direct
production
costs 18,358 19,226
Royalty
payment 1,016 449
Marketing costs 411 268
General
office costs,
including
salaries 1,783 2,472
Amortization
Capital assets 4,471 3,621
Deferred costs 791 500
Interest
Long-term debt 3,820 2,324
Other 9 62
Corporate
finance fee – 280
Loss on
disposal of
capital assets 2 –
——— ———
30,661 29,202
——— ———
Unusual items
Proceeds from
insurance claim 902 –
——— ———
(16) 1,400
——— ———
Provisional
liquidation
costs 886 1,400
——— ———
(Loss) for the
period before
income taxes
and good will (17,665) (24,278)
Recovery of
income taxes 444 400
——— ———
(Loss) for
the period
before good will (17,221) (23,878)
Good will
amortization and
impairment (15,685) (1,206)
(Loss) for
the period (32,906) (25,084)
(Deficit)
retained
earnings
at beginning
of period (57,775) (1,747)
Cancellation
of warrants 694 –
Adjustment
to conversion
privileges (70) –
Retained
(deficit)
— end of
period (90,057) (26,831)
========= =========
Basic (loss)
earnings
per share
for the period
before good will $ (0.17)$ (0.38)
========= =========
Basic (loss)
earnings
per share
for the
period after
good will $ (0.33)$ (0.40)
========= =========
Fully diluted
(loss) earnings
per share for
the period $ (0.33)$ (0.40)
========= =========
WARNING: The company relies upon litigation protection for “forward-looking” statements.
