Company Press Release
SOURCE: Namibian Minerals Corporation
Namibian Minerals Corporation (NAMCO) Announces First Quarter Earnings, Record Diamond Prices and Increased Dividend Payment
LONDON, May 15 /PRNewswire/ -- Namibian Minerals Corporation (Nasdaq: NMCOF; Toronto: NMR; Namibia: NMC) (NAMCO) today reported first quarter earnings of US$2.2 million (1999: US$5.2 million) and a 50% increase in dividend to US$0.03 per share (1999: US$0.02).
Earnings of US$2.2 million, US$0.05 per share, on revenues of US$12.2 million, compare with first quarter 1999 earnings of US$5.2 million, US$0.14 per share, on revenues of US$11.7 million. The number of shares in issue has increased by 22% compared with first quarter 1999, reflecting equity issued to fund the US$60 million Ocean Diamond Mining Holdings Ltd. (ODM) acquisition, with consequent impact on earnings per share figures. Operating cash flow was US$4.7 million, down from US$5.5 million in the year earlier period. Cash at quarter end was US$10.4 million, with diamond stocks of 19,500 carats, compared with US$20.0 million and stocks of 32,500 carats in the fourth quarter 1999.
Diamond production in the quarter was 52,900 carats (1999: 116,000 carats), with operations focused on Mining Licence 36 obtained from ODM last year. The vessels equipped with airlift technology significantly exceeded their targets and provided the major contribution to production. MV Kovambo, equipped with the Company's proprietary NamSSol technology, was deployed in several feature areas in Mining Licence 36 to test mining conditions and grade estimates. The vessel mostly operated in lower grade areas along the edges of Halifax Basin, a 2.42 sq. km. sediment filled depression where more than 140,000 carats were previously recovered by ODM. The results obtained, combined with data from planned exploration, will form the basis of longer term mine planning to fully incorporate these new areas into the production schedule. The average diamond size recovered during the quarter was 0.35 carats, up from 0.33 carats in the first quarter 1999.
Average diamond prices from the sale of 66,500 carats (1999: 81,000 carats) improved to US$182 per carat this quarter, up 27% from US$143 per carat in the first quarter 1999 and up 20% on the full year 1999 average price of US$151 per carat. Despite lower production levels, the improved diamond prices led to higher revenues than in the corresponding period last year. Continued strength in the diamond market should have a significant positive impact on the Company's earnings and cash flow.
``We are encouraged by the results from our first full quarter of assessment and operation in the licence areas acquired from ODM,'' said Namco's Chairman and CEO Alastair Holberton. ``These new mining areas will make a significant contribution to production in the years ahead.''
Unit cash operating costs, including royalty and marketing, were US$104 per carat (1999: US$52 per carat), reflecting lower production levels and increased operating expenditure arising from the three additional vessels. Overall operating costs for the quarter at US$6.9 million were in line with expectations.
During the quarter, the Company launched a high resolution geophysical survey programme in the Company's three mining licences. By quarter end a total of 846 line km. of survey data had been completed, with further surveying to be conducted in the current quarter.
The Company's 2000 mine plan schedules higher production levels in the second half of the year, following a US$4 million upgrade to the airlift operation vessels and the commissioning of Nam II, the new 170 tons ocean diamond mining system. Modifications to MV Namibian Gem started in April and are expected to take two months, which will affect second quarter production levels. The Company is on schedule to commission its Nam II mining system in third quarter 2000.
At the Company's Annual General Meeting in London today, Directors declared a dividend of US$0.03 per share, to be paid on 27 July 2000 to shareholders of record at close of business on 29 May 2000, an increase of 50% on last year's dividend.
``The decision to pay an increased dividend reflects the Board's recognition of last year's achievements and confidence in our ability to meet the challenges ahead,'' said Alastair Holberton, Chairman and Chief Executive Officer.
Namco is Africa's second largest ocean diamond producer that develops breakthrough technology to mine gem quality diamonds off the Namibian coast.
For and on behalf of the Board of Directors of Namibian Minerals Corporation
J. A. Holberton
Chairman and Chief Executive Officer
Neither The Nasdaq Stock 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
Key Statistics
United States Dollars (Unaudited)
Three months ended 31 March
2000 1999
Operating results
Diamond production (carats) 52,900 116,000
Diamond sales (carats) 66,500 81,000
Sales value (per carat) $ 182 $ 143
Cash costs (per carat) (A) 104 52
Financial results (millions)
Revenues $ 12.2 $11.7
Net income 2.2 5.2
Operating cash flow 4.7 5.5
Per share information
Earnings (before goodwill) $ 0.06 $0.14
Earnings (after goodwill) 0.05 0.14
Operating cash flow 0.10 0.15
Common shares (weighted average) 46.5 37.9
As at 31 As at 31
March December
2000 1999
Financial position (millions)
Cash $ 10.4 $20.0
Long-term debt 26.0 31.0
Shareholders' equity 94.4 91.7
(A) Includes royalty and marketing costs
Namibian Minerals Corporation
Consolidated Balance Sheets
United States Dollars (Unaudited)
As at 31 As at 31
March December
ASSETS 2000 1999
$000 $000
Current Cash 10,390 20,033
Accounts receivable 1,627 1,196
Prepayments 485 530
Inventories 5,295 5,279
Marketable securities 97 97
17,894 27,135
Exploration and development costs 14,498 14,098
Capital assets, net of amortization 78,704 71,926
Deferred costs 497 718
Goodwill 34,637 33,449
Other assets 332 308
146,562 147,634
LIABILITIES
Current Accounts payable and accrued
liabilities 10,489 8,624
Current portion of long term
debt 7,029 16,833
17,518 25,457
Deferred income taxes 15,290 14,900
Long term debt 18,939 14,228
51,747 54,585
Non controlling interest 400 1,300
SHAREHOLDERS' EQUITY
Share capital 88,913 83,802
Warrants 56 500
Exchangeable debentures 2,600 4,615
Contributed surplus 459 459
Cumulative foreign exchange adjustment (5,355) (3,124)
Retained earnings (deficit) 7,742 5,497
94,415 91,749
146,562 147,634
Namibian Minerals Corporation
Consolidated Statements of Operations and Retained Earnings (Deficit)
United States Dollars (Unaudited)
For the 3 For the 3
months ended months ended
31 March 31 March
2000 1999
$000 $000
Income Revenue from diamond sales 12,166 11,662
Interest earned 285 77
12,451 11,739
Expenses Direct product costs 5,850 2,783
Royalty payment 891 1,166
Marketing costs 197 245
General office costs,
including salaries 1,053 1,095
Amortization - capital assets 1,136 1,257
- deferred costs 63 --
Interest paid 664 8
(9,854) (6,554)
Earnings (loss) for the period before taxes
and goodwill 2,597 5,185
Income tax credit 210 --
Earnings (loss) for the period
before goodwill 2,807 5,185
Goodwill (562) (3)
Earnings (loss) for the period
after goodwill 2,245 5,182
Deficit - beginning of period 5,497 (10,607)
Accretion on equity component of
exchangeable debenture
(31 March 1999: $27,000) -- (63)
Retained earnings (deficit) - end of period 7,742 (5,488)
$ $
Basic earnings per share for the period
before goodwill 0.06 0.14
Basic earnings per share for the period
after goodwill 0.05 0.14
Fully diluted earnings per share for
the period 0.05 0.13
Weighted average number of shares outstanding
in thousands 46,533 37,869
Namibian Minerals Corporation
Consolidated Statements of Cash Flows
United States Dollars (Unaudited)
For the 3 For the 3
months ended months ended
31 March 31 March
2000 1999
Cash resources provided by (used in) $000 $000
Operating activities
Earnings (loss) for the period before taxes 2,035 5,182
Items not affecting cash
Amortization - capital assets 1,136 1,257
- goodwill 562 3
- deferred costs 63 --
Changes in non-cash working capital 914 (966)
4,710 5,476
Investing activities
Exploration and develop (400) (75)
Capital assets (8,354) (1,228)
Marketable securities -- (423)
Acquisition of ODM (2,268) --
Other assets (24) --
(11,046) (1,726)
Financing activities
Share capital 1,740 --
Long term debt (5,047) --
(3,307) --
Net increase (decrease) in cash (9,643) 3,750
Cash position - beginning of period 20,033 3,897
Cash position - end of period 10,390 7,647
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