More and more shares to dilute us, on top of this,...
#reply-8061064 . On a positive note, the mines are open and secure. The war in this area appears to be limited to a few groups of undisciplined gangs preying on the weak and old. They do not attack the heavily armed mine camps anymore.
But can they make enough money to give a decent eps with so many shares out?? I think it will take a few quarters to find out. They have to get good sampling results from the pipes at Luo, the Camatchia and Camagico kimberlites.
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This comes from their website http://www.diamondworks.com/s/NewsandViews.asp?ReportID=4531
DiamondWorks increasing production at its Angola diamond mines
The NATIONAL POSTreported today that DiamondWorks Ltd. is increasing production at its Angola diamond mines in spite of what president Bruce Walsham calls "a full bloody civil war" in that country.
The Toronto-listed company received a serious setback last November when an armed rebel assault on its recently opened Yetwene mine in northeastern Angola resulted in eight deaths (including the mine manager) and the abduction of another eight employees.
Mr. Walsham told the company's annual meeting yesterday that security has been increased both at Yetwene and at the nearby Luo property, permitting both of these mines to operate two shifts a day, with plans to increase to round-the-clock production.
The 27-person expatriate security force has set up close links with Angola's federal army, both for intelligence on rebel forces and for aid if required. Angola's federal government is a partner in both mines. "There is always risk," Mr. Walsham said. "There will always be sporadic attacks."
The company has two initiatives to locate the eight missing employees. "We believe on fairly reliable authority, but with no proof, that most of them are still alive. We are doing everything that we can, unobtrusively, to obtain their release."
He said that DiamondWorks expects to produce between 150,000 and 200,000 carats in the current calendar year compared with 74,600 carats last year. The diamonds sold in 1998 averaged $173 (US) a carat, giving the company gross sales of $12.9-million (US). In the first quarter this year, the company sold 8,884 carats at an average price of $154 (US).
"Our values have held up very well," Mr. Walsham said. "They are terrific diamonds. That's why we keep going."
The raid that shut the Yetwene mine for several months cost an estimated $2-million (US) a month in sales and extraordinary costs. Mr. Walsham said that the beefed up security means 20% to 25% of the firm's operating costs are for security.
Last November's setback ballooned the firm's loss in 1998 to $25.5-million (US) on revenues of $11.2-million (US). The treasury was refreshed by a $6.5-million (Cdn.) private placement last month, which has shifted control of DiamondWorks.
The major shareholder now is Ekuseni Resources Ltd., a company controlled by Brian Menell, who markets the diamonds. He now owns 35% of the shares and has voting control over several other major blocks of shares.
DiamondWorks diamond mine in Sierra Leone also has been idled by civil war.
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I'm wondering if the new power sharing government that may come out of the current negotiations between Ruf and the Sierra Leone government will be friendly to DMW. DMW after all, was thought to have given significant support to the turfing of Ruf from power.
Thinking of taking a flyer Marcos? |
