Namco losses narrow

Although still afloat, Namibian Minerals (NMR-T) lost US$8 million during the first three months of 2002.

The US8-per-share loss comes on revenue of US$6.4 million and compares with losses of US$12.2 million (or 26 per share) on US$4.7 million in the corresponding quarter of 2001. It also represents a significant improvement over the final quarter of the previous calander year, when losses totaled US$29.6 million on revenue of US$2.3 million.

Namibian used up US$4.3 million in cash to remain operational, which is a far cry better than last year, when cash flow was negative US$8 million. However, both periods were much worse than the final quarter of 2001, when operations provided nearly US$1 million in cash.

Namibian sold 43,286 carats during the recent quarter, up from the 23,865 carats sold a year ago. The company’s quarterly sales have steadily risen since production renewed in mid-2001.

Direct production costs rang in at US$8 million, down from US$9.4 million in the same period of last year. Lower charter rates for the MV Zacharias and MV Kovambo, plus major repairs on the former account for the 15% reduction.

While its production has improved, Namco is still trying to mitigate operational difficulties. For instance, repairs on the NamSSol I seafloor crawler, which was damaged a year ago, are finished, and thus production is expected to resume in June.

On the financial front, Namco is attempting to secur additional funding. If successful, the company intends to use a portion to increase production and lower operating costs.

Namco has rescheduled the repayment terms for the convertible debentures issued in early 2001 and the terms of a US$2.6-million loan from an affiliated company. That same company also provided a new US$10-million loan facility, from which Namco has already withdrawn US$6.5 million for working capital purposes and to repay an existing US$2.6-million bridge loan.

At the end of March, Namco had US$1.2 million in cash and 17,514 carats in diamond stocks. The company’s had a working capital deficiency of US$4.7 million and long-term debt of US$54.6 million.

On May 24, Namco was de-listed from the Nasdaq National Market after failing to prop up its share price to meet the market’s minimum bid price of US$1.