Namakwa Diamonds Limited Result of Tenders and Operational Update (7836Z)

TIDMNAD

RNS Number : 7836Z

Namakwa Diamonds Limited

12 March 2013

12(th) March 2013

Namakwa Diamonds Limited (AIM: NAD)

("Namakwa Diamonds" or the "Company")

Result of Tenders and Operational Update

Namakwa Diamonds is pleased to announce that it has successfully closed its recent sale of rough diamonds from the Kao Mine in Lesotho, operated by its 62.5% owned subsidiary, Storm Mountain Diamonds, as well as from its South African North-West subsidiary.

Two separate tenders for each subsidiary company were run in Antwerp, through Fusion Alternatives (the dedicated tender partner of I Hennig & Co.) and took place between the 5(th) and 8(th) March 2013.

Kao Tender

All 52 lots offered, totalling 13,976 carats at an average diamond size of 0.26 carats per stone, were sold at an average selling price of US $274.50 per carat. The sale realised revenues of approximately US$3.84 million. The 100 per cent. sell-through achieved, again reflects the strong demand for Kao product.

North-West Operations Tender

The North West production, totalling 1,136 carats in 42 lots, was also sold in Antwerp for the first time at an average price of US$600 per carat, with an average stone size of 0.48 carats. The sale realised revenues of US$ 681,994.

Operational update

On the 25(th) January 2013, the Company reported that the scrubber unit at the Kao would in all likelihood fail in the future and that the scrubber was being operated at a reduced rate to avoid total failure whilst the new scrubber unit was being designed and constructed. The Company is pleased to report that fabrication of a new scrubber unit by Cobar in Johannesburg is underway and that Consulmet has applied a new design to the scrubber mounting and frame. The expected delivery time to site is the beginning of May 2013.

Commenting, Theo Botoulas, Chief Executive Officer of Namakwa Diamonds, said: "The eighth Antwerp tender of Kao product, and thirteenth since January 2012, has resulted in sales of a total of 202,931 carats from Kao Mine production, generating US$58.9 million in revenues for the Company. We are extremely pleased with the result of our first tender of North-West production in Antwerp, which only serves to underline the significant potential revenue uplift for Namakwa from the North-West mines."

"The technical team we have assembled is completing a technical study for the Kao Mine in order to update the mine planning, optimization and scheduling by the end of March 2013, and has identified the constraints present in the plant design and equipment. Rectifying action has been taken for items of plant which have performed poorly and which are inappropriately designed or sized for the intended purpose. Management, together with consultants Consulmet, have targeted the end of May 2013 for this initial plant upgrade project to be completed. This will include the installation of the new Cobar scrubber as per the frame and mounting design supplied by Consulmet, the completion of a jet-pump system to the recovery, a properly sized tailings screen to ensure plant reaches design capacity, the construction of a closed re-crush circuit to improve diamond liberation, as well as the installation of a new scrubber. The impact in terms of plant downtime is estimated at 21 days. Temporary repairs are being effected on the current scrubber with the intention to run it until the new scrubber unit can be installed in order to optimize production. The Company is examining all legal recourses available to it with regards to consequential damages."

For further information please visit www.namakwadiamonds.com or contact:

 
 Namakwa Diamonds                     Shore Capital 
                        +27 11 334                   [phone] 
 Theo Botoulas           8886         Pascal Keane    4090 
 
 Tavistock Communications 
 Simon Hudson/Kelsey    [phone] 
  Traynor                3150 
 

About Namakwa Diamonds Limited

Namakwa is a diamond resource group, which seeks to extract maximum value from the marketing and sale of Group mined and contracted production.

The Group's mining activities are focused on the Kao Mine in Lesotho. Operated by Storm Mountain Diamonds, the Kao Mine Pipe Complex presents a c.183Mt kimberlite resource of c.11.6m carats ("cts") (c.3.3Mcts indicated and c.8.3Mcts at Inferred level of confidence), with an additional 1.7m carats at a Deposit level of confidence, in which Namakwa holds a 62.5% interest. The other shareholders are the Government of Lesotho (25%) and Kimberlite Investments Lesotho Limited (12.5%).

The Group also maintains alluvial mining operations in the North West Province of South Africa and resource-development and exploration assets in the Northern Cape Province of South Africa and the offshore marine environment of Namibia. These combined resources add a further c.6.9Mcts at Indicated and Inferred levels of confidence to the Group's Global Resource Inventory to a grand total of 18,535,700 carats as at 31 August 2012.

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