Wednesday July 12, 10:00 am Eastern Time
Company Press Release
SOURCE: Namibian Minerals Corporation
Namibian Minerals Corporation (Namco) Announces Revised Outlook For the Year and Construction of Nam 2 Mining System Complete
LONDON, July 12 /PRNewswire/ -- Namibian Minerals Corporation (NAMCO) (Nasdaq: NMCOF - news; Toronto: NMR - news; NSE: NMC), today announced progress on its Nam 2 mining system and exploration activities, and a revised production outlook for 2000.
2000 Outlook -- Lower Production But With New Technical Solutions
Lower production levels continued in the second quarter as a result of more difficult than expected mining conditions for the Company's major production vessel MV Kovambo, the extended time in port required to upgrade MV Namibian Gem, and the decommissioning of MV Oceandia. Production for the first half of the year was approximately 100 000 carats.
After initial testing of ODM areas in the first quarter, the NamSSol mining system supported by MV Kovambo returned to Mining Licence 51. More clay than expected was encountered in these mining areas, causing tracking difficulties for the machine, and reduced mining rates. NamSSol has since been relocated to other parts of Mining Licence 51 which have easier mining conditions but are of lower grade.
The new Nam 2 second generation mining system has been specifically designed to deal with these more difficult mining conditions with more tracking power, reduced weight pressure, cutters and water jetting and it will be used in the areas where NamSSol cannot operate. Mining of parts of Mining Licence 51's diamond resources has therefore been deferred until the arrival of the new generation machine.
Production was also affected by the extended time required to upgrade MV Namibian Gem in the second quarter. A complete engineering overhaul was required to bring the vessel up to necessary standards. The vessel spent two and a half months in port, which was substantially longer than expected. MV Namibian Gem returned to production in late June and production levels have already benefited this quarter. To concentrate on continuous production, the proposed minor modifications to MV Ivan Prinsep have been deferred until 2001. MV Oceandia was withdrawn from operation on 1 June as the cost to upgrade her was uneconomic.
With difficult mining conditions for NamSSol, a delay in production from Nam 2 (see below) and the removal of one ODM vessel from production, the Company's target production for 2000 will not be achieved. The revised production estimate from three vessels is in the range of 225,000 - 250,000 carats. Higher than expected diamond prices (US$184 per carat for six months to 30 June 2000 against an expected US$155 per carat) will to some extent offset the lower revenues from revised production estimates. Cash at 30 June 2000 was US$13 million.
``Mining conditions have proved harsher than expected. 2000 is now a year of consolidation as we continue to expand our technology to handle the even more rigorous mining conditions and geological settings. We look forward to resumption of growth in 2001,'' said Chairman & CEO Alastair Holberton.
Construction of Nam 2 Mining System Complete
Construction of the new Nam 2 mining system is complete, and dry-land testing began last week. Namco's first marine mining system, NamSSol, revolutionised the ocean diamond industry with its ability to pump high volumes of seabed material using advanced dredging techniques. Further innovations have been added to Nam 2, which is specially designed to facilitate mining through thicker overburden and more challenging geological terrain. Dry testing of Nam 2 will continue over the next two months.
Namco's new mining vessel, MV Ya Toivo, which will provide the operating platform for Nam 2, arrived in Cape Town from Poland on 3 July. Since November 1999, extensive modifications have been carried out on the former British navy vessel including deck extensions, the installation of a four point mooring system, a helicopter deck and a dynamic positioning system and the refurbishing of onboard accommodation. Conversion of the vessel, at owner's cost, took one month longer than scheduled. The 8000 gross tons MV Ya Toivo will be one of the largest diamond mining vessels deployed off the Namibian coast.
Installation of the 100 tons per hour processing plant on the MV Ya Toivo began on 5 July and is expected to take sixteen weeks to complete. Commissioning is now expected to be completed in the fourth quarter 2000.
Following commissioning of Nam 2 and MV Ya Toivo, a full year of commercial diamond production is planned for 2001 from the four mining vessels.
Sampling to Start in Third Quarter
Sampling is on schedule to start this quarter using a new drilling tool jointly designed by Namco and German engineering company Wirth. Following completion of 2,500 line km of geophysics over selected parts of Mining Licence 36 in April, MV Zacharias was converted for sampling. A helicopter deck, ten tons per hour processing plant and complete launch and recovery system were installed. Results from the geophysics were encouraging, with many new geological features identified for testing. The sampling tool's unique ability to operate in a wide range of ocean floor conditions and to determine the precise nature of the mining conditions e.g. sediment composition, clay and mineability, will enable the optimum mining systems to be allocated to different parts of Namco's concessions.
``The start of a continuous sampling programme is one of our most significant milestones. This tool will allow us to develop the full potential of our ocean diamond resources,'' said Mr. J.A. Holberton, Chairman & Chief Executive.
Second quarter and half-year financial results will be published in mid-August.
For and on behalf of the board of directors.
Neither the Nasdaq National Market, The Toronto Stock Exchange, nor the Namibian Stock Exchange has reviewed the information herein and they do not accept responsibility for the adequacy or the accuracy of the above.
SOURCE: Namibian Minerals Corporation
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