Company Press Release
SOURCE: Namibian Minerals Corporation
Namibian Minerals Corporation (Namco)
Announces Fourth Quarter and Full Year 1999
Results
LONDON, Feb. 24 /PRNewswire/ -- Namibian Minerals Corporation (Namco) (Nasdaq: NMCOF - news;
TSE: NMR - news; NSE: NMC) today announced fourth quarter and full year 1999 results from its Namibian
ocean diamond mining operations.
Twelve month highlights
-- Earnings of US$17.1 million, US$0.43 per share, on revenues of
US$42.8 million.
-- Diamond production of 273,700 carats.
-- Average diamond price of US$151 per carat.
-- Acquisition of Ocean Diamond Mining Holdings Ltd. (ODM), Africa's third
largest ocean diamond producer.
-- Expansion of diamond resources to 3.67 million carats, including
1.04 million carats from the ODM acquisition.
-- US$25 million project loan for the development of the next generation
diamond mining system, Nam II.
Earnings in 1999 increased to US$17.1 million, US$0.43 per share, compared with US$3.1 million, US$0.08 per
share, for the seven months ended 31 December 1998 (1998)(1). Revenues from the sale of 283,000 carats
(1998: 92,100 carats) rose to US$42.8 million against US$13 million a year earlier. This included 12,000 carats
held by ODM at the date of the acquisition. The Company's average realised diamond price for the year increased
by 7% to US$151 per carat, against US$141 in 1998. Operating cash flow for the year was US$22.7 million
(1998: US$282 000). At year-end the Company's cash position was US$20 million (1998: US$3.9 million) and
shareholders' equity was US$91.7 million (1998: US$46.2 million).
Diamond production for the year was 273,700 carats (1998: 100,100 carats), comprising 256,500 carats from
Namco's operations and 17,200 carats from two months of ODM's operations. Diamond stocks at year end were
33,200 carats (1998: 30,500 carats).
For the fourth quarter of 1999, diamond sales of 53,700 carats generated revenues of US$8.4 million, for an
average carat value of US$156. Earnings were US$1.1 million, US$0.03 per share. Fourth quarter earnings
reflect lower diamond sales, due to reduced diamond production in the third quarter when MV Kovambo had a
two months port call. Operating cash flow was US$2.1 million. Diamond production for the fourth quarter,
including the ODM contribution, was 65,900 carats.
``1999 was a year of outstanding growth,' said Namco's Chairman and Chief Executive Officer Alastair
Holberton. ``Our NamSSol produced more than any other single diamond mining system operating off the African
coast. Our acquisition of ODM significantly increased our concessions, diamond resources and future production
capability
(1) The Company changed its year end from 31 May to 31 December in 1998.
1998 financial results present information for the seven months to 31
December 1998.
During the quarter the Company closed its general offer for ODM with ownership of 92.5% of ODM shares. The
US$60 million acquisition was funded through a mix of loan finance, the issue of new equity and the Company's
cashflow. A US$25 million loan was secured from Investec Bank (Mauritius) Ltd. In addition, approximately five
million shares totalling US$18.8 million were issued. The Company funded the remaining US$16 million from its
own cash resources. A further 2.7 million shares were issued to raise US$11 million for working capital purposes
in an international private placement.
Namco's management team has already improved operating performance of the ODM vessels. Diamond
production increased by more than 30% as a result of the introduction of effective spares management, thereby
reducing operational downtime, and by dedicating all three vessels to mining operations. The Company plans to
invest US$4 million on a number of technical improvements in 2000 to further boost production levels.
Funding for the Company's second generation marine mining system, Nam II, was secured during the quarter. The
US$25 million Project Loan facility from HSBC Equator Bank plc (HSBC) and Nedbank Africa, a division of
Nedcor Bank Ltd., (Nedcor), covers the cost of Nam II, a 100 tons per hour DMS processing plant, additional
vessel equipment, commissioning costs and financing fees. At year end US$6.1 million had been drawn down.
Construction of Nam II started in Cape Town, South Africa. 95% of all components have been delivered.
Assembly of the mainframe, tracks and suction boom are well advanced and land testing of the machine is
scheduled for May 2000. Construction of the processing plant is 20% complete. Modifications on the 8000 tons
former British Royal Navy vessel renamed MV Ya Toivo, chartered for five years, commenced in Gdansk,
Poland, in the fourth quarter. Sponsons are currently being installed on the vessel to increase its width by six
metres. The project is on target to start commissioning in the third quarter of 2000.
The Company plans to progressively increase its diamond production by 45% to 400,000 carats in 2000. This
should be achieved through the contribution from Nam II in the second half of the year, and the phased upgrade of
ODM's mining vessels. The Company also plans to increase its diamond resources through a major exploration
programme using a new exploration tool developed with German engineering group Wirth onboard chartered
vessel MV Zacharias.
``Our strategy in 2000 is to focus on continued technological innovation, on improving the productivity of our
operations and on expanding our current diamond resources,' said Mr. Holberton.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS OF NAMIBIAN MINERALS
CORPORATION
J.A.Holberton
Chairman & Chief Executive Officer
Neither The Nasdaq National Market, The Toronto Stock Exchange, nor the Namibian Stock Exchange has
reviewed the information herein and do not accept responsibility for the adequacy or the accuracy of the above.
Namibian Minerals Corporation
Consolidated Balance Sheets
United States Dollars
As at As at
ASSETS 31 December 1999 31 December 1998
$000 $000
Current Cash 20,033 3,897
Accounts receivable 1,196 732
Prepayments 530 132
Inventories 5,279 2,628
Marketable
securities 97 255
27,135 7,644
Exploration and
development costs 14,098 12,213
Capital assets,
net of amortization 71,926 28,586
Deferred costs 718 -
Goodwill 20,749 55
Other assets 308 171
134,934 48,669
LIABILITIES
Current Accounts payable
and accrued
liabilities 8,366 2,235
Current portion of
exchangeable
debenture 258 280
Current portion of
long term debt 16,833 --
25,457 2,515
Deferred income taxes 2,200 --
Long term debt 14,228 --
41,885 2,515
Non controlling interest 1,300 --
SHAREHOLDERS' EQUITY
Share capital 83,802 53,834
Warrants 500 --
Exchangeable debenture 4,615 4,724
Contributed surplus 459 459
Cumulative foreign
exchange adjustment (3,124) (2,256)
Retained earnings (deficit) 5,497 (10,607)
91,749 46,154
134,934 48,669
Namibian Minerals Corporation
Consolidated Statements of Operations and Deficit
United States Dollars
For the 12 For the 7
months ended months ended
31 December 1999 31 December 1998
$000 $000
Income Revenue from
diamond sales 42,808 12,984
Interest received 632 111
Gain on marketable
securities 354 128
43,794 13,223
Expenses Direct production
costs 13,717 4,351
Royalty payment 3,732 1,264
Marketing costs 866 324
General office costs,
including salaries 3,762 1,980
Writedown of
marketable
securities -- 350
Amortization
- capital assets 3,665 1,807
- goodwill 256 7
- deferred costs 60 --
Interest payable 598 32
(26,656) (10,115)
Earnings (loss)
for the period 17,138 3,108
Deficit - beginning
of period (10,607) (13,576)
Accretion on equity
component of exchangeable
debenture (net of tax
of $54,000;
31 December 1998: $62,000) (276) (139)
Dividend ($0.02 per share) (758) --
Retained earnings (deficit)
end of period 5,497 (10,607)
$ $
Earnings (loss) per share
for the period 0.43 0.08
Fully diluted 0.40 0.08
Weighted average number of
shares outstanding
in thousands 40,233 37,850
Namibian Minerals Corporation
Consolidated Statements of Cash flows
United States Dollars
For the 12 For the 7
months ended months ended
31 December 1999 31 December 1998
Cash resources provided by (used in)
Operating
activities Earnings (loss)
for the period 17,138 3,108
Items not
affecting cash
Amortization
- capital assets 3,665 1,807
- goodwill 256 7
- deferred costs 60 --
Writedown of
marketable
securities -- 350
Gain on sale of
marketable
securities (354) (128)
Changes in non-cash
working capital 1,942 (4,862)
22,707 282
Investing
activities Exploration and
development
costs (1,885) 750
Capital assets (14,304) (933)
Marketable
securities 413 128
Acquisition
of ODM (31,630) --
(47,406) (55)
Financing
activities Share capital 10,812 23
Long term debt 31,061 --
Exchangeable
debenture
repayment (280) (255)
Dividend payment (758) --
40,835 (232)
Net increase (decrease)
in cash 16,136 (5)
Cash position
- beginning of period 3,897 3,902
Cash position - end of period 20,033 3,897
SOURCE: Namibian Minerals Corporation
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