Namco hangs in there

A near brush with death left Namibian Minerals (NMR-T) with US$25.1 million in losses on revenue of US$6.2 million for the first six months of 2001.

Namibian’s loss, which translates into 40 per share, was basically split between the first and second quarters. It compares with earnings of US$3.3 million on US$21.9 million in the first two quarters of 2000.

In January, Namibian’s NamsSol seabed crawler was severely damaged while mining in Namibia’s coastal waters. The loss in production left the company with insufficient cash flow to meet debt obligations and forced the company into provisional liquidation.

Namibian has since raised US$29.6 million on the market, resulting in the release of its subsidiaries from provisional liquidation. Moreover, the Nam2 mining submersible is making its rounds on the ocean floor, as is the Namibian Gem airlift vessel.

Nevertheless, production in the first half amounted to a mere 24,500 carats, about one quarter of the amount of production a year ago. Moreover, the stones fetched only US$164 per carat, compared with US$185 per carat last year. This accounts for some of the company’s financial losses.

Production is improving, with output in the current quarter having already exceeded the previous quarter’s output of 13,800 carats. A renewal in resource sampling should hasten the turnaround.

On June 30, Namibian had a working capital deficiency of US$27.9 million and US$50 million in debt. Its number of shares outstanding totalled 76.2 million, of which the largest portion was held by the Leviev Group of Israel.

At presstime, Namibian’s issue was trading at 34, down 6 on the day.