Namakwa Diamonds Share Discussion Threads

[peterj5] 13/12/2011 11:07

baffoon, one more day to go for the appeal deadline

[onceabroker] 13/12/2011 10:32

baffins

many thanks for the updated figures, and am also very pleased with the future this company has.

I would ignore Andy/abtwo, they have both been de-ramping this for months, for whatever their personal reasons maybe. even they should now admit that the company is de-risked to a certain extent.

best regards

John

[baffins] 13/12/2011 10:07

Thanks onceatrader but you may like to know I have made some slight amendments since you copied it. Namely the reworked lower figures for the combined SA & Kao revenues, the extra paragraph outlining positive upside along with negative downside which are both possible in the post before this and also the "NOTE" regarding the possible repayment of the principal amount before the due dates and year 2 interest due dates.

Andy, why don't you tell us what the TOTAL CASH COST is as it appears you know different from the company "AVERAGE" very recently published. "AVERAGE" is there for a reason and that reason is that cash cost are sometimes higher and sometimes lower hence the "AVERAGE". It just so happens I used an "AVERAGE" of the stated "AVERAGE" ($15 to $18) which equates to $16.6 per tonne. Conversely, I could have used $22 (high end average which is your implication I assume) or even $10 (low end average) per tonne, regardless because it still is a $16 "AVERAGE". I have already highlighted a $5,000,000 saving for 300,000 tonnes of ore and that was in a period of a few months since mining progressed.

[andy] 13/12/2011 10:06

baffins,

Ask the company what the TOTAL CASH COST is, then apply it to your figures, reducing the diamond values by 20%, then see what the margin is.

I suspect it will be nowhere near your current figure.

[abtwo] 13/12/2011 09:59

baffins,

"...based on the latest tender values (June 2011 @ $372 per carat).."

As widely indicated the diamond price has fallen 20-25% since the last sale. This will reduce the margin which is in itself is optimistic given they quote a somewhat low operating cost (which will be on mine costs only).

[onceabroker] 13/12/2011 08:44

baffins

a very good article, and i hope you don't mind, i posted it on iii

best regards

John

[baffins] 12/12/2011 22:34

BAM BAM Rubble you are correct with your comment of "eye-watering 24% interest rate" but failed to include the period it is applied which is the 2nd year only. You have also failed to mention the very favourable equivalent interest rate of the 1st year which amounted to a mere £1.17m (approx $1.9m) consisting of 9m shares issued at approx 13p which would make an interest rate for Year 1, for the principal amount, of approx 4.7%. If you were to combine the total interest rate for the entire 2 year term of the $40m facility as they do go hand in hand, and not just single out the 2nd year interest rate only, the average interest rate would be approx 14.3% which I think is reasonable given the current market conditions and also the huge sum made available which will very safely see them fully funded for phase 1 development.

Of the agreed $40m facility the current debt is $23m with a further advance of $2m available up to and including 9 December 2011. The remaining and final $15m is available from 12 December 2011 up to and including 30 June 2012. NAD has already satisfied interest payments in respect of amounts drawn down under the Facility in the period between 8 September 2011 and 31 August 2012, with the issue and allotment to Jarvirne of 9,000,000 new Ordinary Shares on 20 September 2011.

*NOTE - No interest payments for year 2 are due until September 2012 but repayments towards the principal amount may be made.

NAD is required to repay all amounts drawn down under the Facility in full, together with all interest accrued thereon, on or before 30 September 2013 (or otherwise refinance the Facility). Going forward and bearing the numbers in mind from my previous post, the 2 year period of the facilty and also the "cash sweep" provision, meaning excess cash of the Group is applied in repaying the Facility prior to any other expenditure, I have come to the following conclusion.

24 months now reduced to 20 months starting from January 2012 until August 2013:

SA = 20 months revenue at $890,000 per month = $17,900,000 EXCLUDING "specials" (which could easily bring in very significant revenues as seen before at over $1,100,000 per stone) and with costs at an absolutely HUGE 50% = $8,900,000 towards the facility

Kao = 20 months revenues at $6,100,000 per month = $122,000,000 MINUS costs at $3,000,000 per month = $60,000,000 making $62,000,000. Now, NAD only have 62.5% of Kao reducing this to $38,750,000

So, in the 20 months period STARTING JANUARY 2012 NAD COULD have bottom line numbers of $8,900,000 (SA) + $38,750,000 (Kao) = $47,650,000 which would pay off the entire $40,000,000 facility and its associated interest well BEFORE the due by date to actually save unnecessary monthly interest payments and still leave a little remaining.

Of course other expenses are applicable such as salaries but the meaty ones are accounted for above and they have the funds needed due to the facility and all NAD have to do is stick to their estimated production targets. Obviously the diamond market also has to keep the pace also but as long as it does not see a crash like the 2008 level all could well be hunky dory here. Also remember I have not taken any account of the "specials" from SA, aswell as the HUGE production costs I have applied and also the dismissal of any ramp up of production from its planned minimal FY 20,000 carats.

Any upside in the diamond market, recovery of more "specials" which are not even included COULD make a significant difference. The same could be said on the negative side, any downside in the diamond market, no "specials" and missed production targets could see this turn to dust.

[baffins] 12/12/2011 20:05

Very good to see a corner being turned after the very rough months past. The recent Investor Update give us a nice insight of the current status now that the loss making operations in the DRC have been offloaded and also SA mining already showing positive operating cash margins after recent drastic cost saving cuts. We also have Kao which has been quickly brought into production with the first tender planned for January 2012.

Also nice to see the continued presence of "specials" (10.3carats or more) from the SA alluvials including a very recent find of a 37ct stone. This area has history of top quality stones and even the RoM stones command a high carat values. This area, around the start of the year, produced a 7.53ct rare vivid orange which achieved the highest known rough price for such a stone at US$176,713 per carat and also the 26.74ct D(IF) Type IIa sold for US$44,000 per carat. If the recent 37 carat stone is of a similar Type IIa quality we are looking at a single stone in excess of $500,000, even at a lesser quality I would still say we have a stone valued at approx $400,000. Would be nice to know the exact cash costs of SA but we must trust the new management and they have recently declared it is running at a cash positive basis. They estimate 20,000 carats for FY12 therefore approx 1,650 carats per month. If they can maintain this production rate we would see revenues approx $890,000 per month based on the Venmyn model average of August 2011 ($511 per carat SEN and $576 per carat Northern) EXCLUDING any revenues from the "specials".

I note the FY2012 production target ore tonnage for Kao has decreased slightly (300,000 tonnes) from the 23 November 2011 update to the most recent one but the estimated 200,000 carats remain the same. This is a good sign as it indicates cpht has increased slightly in a short period of time since production commenced and also the ore reduction would equate to a FY saving of approx $5,000,000 ($16.6 per tonne cash cost).

Using the ore tonnage costs as the economics 200,000 carats for FY12 would see approx 16,500 carats per month and based on the latest tender values (June 2011 @ $372 per carat) this would see revenues of approx $6,100,000 against production costs of approx $3,000,000 (approx 183,000 tonnes of ore at $16.6 per tonne). Costs per tonne as opposed to revenue per tonne is, in my opinion, the best foundation to base economics and I also believe these cost will decrease as mining progresses. I also believe that some large high quality stones will be unearthed as the pit deepens.

I am looking forward to the future.

[onceabroker] 12/12/2011 16:22

Just been posted on NAD website,

I see we are seeing good progress from SA, with a 37ct find in December 2011.

best regards

John

[peterj5] 10/12/2011 10:48

NO, only you are convinced of a appeal, no one else see's merit in a appeal, except you and Melissa

not long to go now baffoon, 14 days are ticking away. by the way heres a tip for you, instead of having conversations with batla, try talking to Nad, to see if a appeal has been lodged, yesterday at 4pm nothing was lodged.

so simple, like you!!!

[baffins] 09/12/2011 22:53

Original initiation of court proceedings by Batla against SMD/NAD:

Notice of Motion filed by Toro/Batla Wednesday 22nd June 2011



Batla Minerals SA, instigated court action against Namakwa Diamonds Limited in the High Court of Lesotho on Thursday, 23rd June 2011



Namakwa informs the public Monday 27th June 2011



As can be clearly seen from the above, the reporting of news is not instantaneous and it does, in fact, take several days. Surely this goes without saying anyway and this information is basic logic to even the most mentally challenged members of the investing community.

I fully expect NAD to inform the public within this coming week of a forthcoming appeal planned by Toro/Batla. It's far from rocket science logic, I'm positive you will agree Peter. I am also sure others here, with a fraction of a brain cell, know this also. Afterall, most here are "pretty clued up" with the exception of the few obvious ones.

As a current investor of NAD I have no worries of a forthcoming appeal. I do not see the merit of an appeal but it is entirely the prerogative of Batla/Toro regardless of my opinion which matters not in the slightest. If Batla choose to pursue on an appeal, along with its associated costs, after such a negative and damning outcome to the original case, I do not care one iota.

[peterj5] 09/12/2011 14:54

oh dear, has your mates from batla not delivered their appeal papers yet baffoon, taking their time, since you declared quite bullishly that there would be a appeal from your mates in the next 2 to 3 days, well today is the third day matey boy.

dear oh dear, dont know why people have to lie just to get a good entry point in a share, you do know that market makers dont listen to the drivel that you have been sprouting. it would seem you have a agenda here, but fortunately for us, we are pretty clued up here

its ok, you dont have to hide away, just come and face the music like a man, hahaha, 'melissa and me' bla bla

[baffins] 08/12/2011 18:32

Peter, I have no need and certainly no plan to send you any email at all. Afterall, you stated you contacted Melissa and she has informed you "that no such emails would or could have been sent, it would not be appropriate and legal" therefore there should be no need to ask me for it. According to Melissa and you it does not exist. I, however, have a very different view indeed.

Like I said, bring it all on and do what you need to do but I suggest you do not let my appeal confirmation from the company and Melissa's side step distract you. You obviously have a very busy period ahead with your "letters to post this evening" to the "relevant authority's". Now, you better get a move on, chop chop.

PS: More attention to detail needed from your part Peter as you even fail to get the most simple of things correct, such like the spelling of your new "special email account" which you have stated to be "[e-mail]". I am sure you meant it to be BALLS IN and not "BALL INS". Bearing this in mind please make sure your "letters to post this evening" do not include such embarrassing clumsy schoolboy errors or you will be laughed at even more upon receipt of them by the "relevant authority's" or AUTHORITIES to be correct.

[baffins] 08/12/2011 17:01

Peter, I do not scare easily and all I can say is bring it on, bring it all on, as much as you can muster.

Do what you feel you need to do and I hope that includes furthering your basic education starting with "FOLDERS" within email accounts.

LOL.

[baffins] 08/12/2011 16:45

Peter, well there you have it. I have the email that has been sent informing me of the forthcoming appeal. Melissa is fully aware of this as the very same email was sent directly to her at the same time (Tuesday, 6 December 2011) and also the MD, Arnaud Vercruysse, the director, Johannes van der Walt were CC'd the exact same email.

Someone is lying and I am just very glad I have all the details of the email securely saved should anything questionable develop. I am very happy indeed.

"who gave you the Nad folder, mr reynolds?" LOLOLOLOLOL

This just confirms your ability. Peter, my "NAD FOLDER" is a section within my email for saving company/topic specific emails. An email "FOLDER" is available to be created by anyone with even a tiny fraction of a one brain cell.

OMG!

[jimmy2020] 08/12/2011 16:41

Thanks for the reply Baffins.
Agree with you oregano, I doubt there'll be any new evidence on appeal (and probably wouldn't be allowed to), so any appeal is likely to rest on proving judge was wrong in law or principle, but time will tell.
Here's a link to the judgment, if anyone's interested:

[oregano] 08/12/2011 16:09

time will tell. they have 7 days left to appeal. you would have thought they need to bring something new and concrete to the party to get anything out of it. and if they have anything, why not produce it last time? they had no evidence at all.

Presumably if toro won they'd have to finance their share of the costs bourne so far by Namakwa, so i would have thought there is less upside for Nads if Toro win, but little downside. it just wipes out part of their debt.

[peterj5] 08/12/2011 15:20

ohhh, that looks very genuine, nice try