Namakwa Diamonds Share Discussion Threads

[baffins] 13/3/2012 10:48

No problem onceabroker and I hope you and others find the information useful.

I am aware that 3 Judges will hear the appeal but no new evidence will be presented.

[onceabroker] 13/3/2012 08:26

baffins

many thanks for posting that information

best regards

John

[baffins] 13/3/2012 08:13

peterj5 will be saddened to learn that the forthcoming Batla appeal, which he totally dismissed and is still eating humble pie, will be heard on the 27th April 2012.

[naked trader] 06/3/2012 21:09

Would exit ftse small cap this month if it stays at this level!

[onceabroker] 01/3/2012 12:37

I sent a email to the company, below is the question and answer, both are self explanatory, and hopefully we should see anywhere between $8 to $11 million received from 'KILL' soon, which will of course help in our funding needs for the future


email sent


good moning

I would be very pleased to have one question answered

1/ i was impressed by the transparent nature of yesterdays trading update, and i congratulate the company for the manner in which it informed the market, but as you are aware the market and broker analyst responded negatively to the company's delay with crusher order, and more importantly, the state of our funds. to which liberum actually declared that we would require short term funding and see's this as a negative on yesterdays statement

quote

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email [e-mail] to buy additional rights.

Namakwa Diamonds lost 11.4 per cent to 8.2p after its trading update resulted in its being cut to "hold" by Liberum.
Liberum said that although the diamond company had progressed to commercial production, its funding situation remained tight.
The company had "drawn down $31m of the $40m facility issued by largest shareholder Jarvirne [32.5 per cent of shares] and has a further $3m on call . . . Given the weaker cash flow we see material risk of a further short-term financing need to get the company across the line", the broker said.

end


my question is quite simply, why did the company not touch upon the following agreement:

On 16 June 2011, pursuant to the terms of the transfer of the mining lease for the Kao
project area to Storm Mountain Diamonds, Namakwa transferred a 12.5% interest in Storm
Mountain Diamonds to Kimberlite Investments Lesotho Limited, at par value. Under the
terms of an agreement dated 4 December 2009, Kimberlite Investments Lesotho Limited is
obligated to pay c.US$1.5m to Namakwa, in respect of its portion of the share of acquisition
costs for the project. In the event that the funds are not paid, Namakwa retains the right to
call upon the 12.5% equity interest pursuant to the terms of an agreement dated 4
December 2009.
Kimberlite Investments Lesotho Limited is also obligated to fund its proportion of the Phase
1 capital development and operational costs (expected to be in the region of c.US$11m up
to the commencement of commercial production in the first quarter of the 2012 calendar
year) to Storm Mountain Diamonds, as a shareholder of the company. Thereafter, Kimberlite
Investments Lesotho Limited will continue to be required to meet its portion of the funding
requirements of the Kao Project as an ordinary shareholder of Storm Mountain Diamonds. It
is the intention of Kimberlite Investments Lesotho Limited to raise the necessary funds to
repay these liabilities from the public market in Lesotho.

this would imply that we are due a significant proceed from kimberlite investments lesotho ltd, which would secure our short term funding needs, will the company let me know what is the current situation regarding the above, how much they are expecting as payment, and whether they are considering informing the market in due course.

i look forward to a prompt reply please.

end

email reply received

From: Ryan Barrow
To: xxxxxxxxxxxxxxxx
Cc: "[e-mail]" ; SimonHudson
Sent: Thursday, 1 March 2012, 9:46
Subject: Re: namakwa diamonds

Mr xxxxxxxx

Thank you for your continued support of Namakwa Diamonds. We will update the market in respect of the receivable from Kimberlite Investments Lesotho Ltd as part of our half-year financial results.

Regards

Ryan Barrow
Strategy & Legal

[onceabroker] 29/2/2012 16:15

a very good point, i know you have mentioned this before, now that we are into commercial full production tomorrow, that would mean the funds are now due? i wonder if KILL may wait until the outcome of the appeal process prior to paying their share, if they are allowed to wait that long. either way that amount of money will make a lot of difference to NAD cash in the bank going forward.

good find

best regards

John

[baffins] 29/2/2012 15:00

I have been reliably informed that Kimberlite Investments Lesotho Limited are in the process of raising funds to meet their obligations with regards to their 12.5% stake in Kao.

With this in mind it is worth noting the comments I made in a previous post detailing the kind of figures we should be looking at. I have copied and pasted the details below:

Kimberlite Investments Lesotho Limited are responsible for 12.5% of this CapEx due to their interested stake and although I do not expect them to cough up their share of the additional US$8m for Q1'2012 just yet I do expect them to hand over their share of the US66m already spent which will amount to US$8.25m. If they do not cough up they run the risk of losing their stake and should that be the case their 12.5% will be returned to NAD.

Under the terms of the agreement set up when Kimberlite Investments Lesotho Limited took up their 12.5% stake they were obligated to pay US$1.5m to NAD in respect of its portion of the share of acquisition costs for the Kao project and fund their proportion of the Phase 1 CapEx development and operational costs (expected to be in the region of US$11m up to the commencement of commercial production in the first quarter of the 2012 calendar year). Thereafter, they are required to meet their portion of the funding requirements of the Kao Project as an ordinary shareholder of Storm Mountain Diamonds. The intention of Kimberlite Investments Lesotho Limited is to raise the necessary funds to repay these liabilities from the public market in Lesotho.

As you can see, taking all into account NAD is owed approx US$10m by Kimberlite Investments Lesotho Limited. It is a significant amount and will go a long way to repaying a portion of the Jarvine debt.
=======================================================================

Worth bearing the detail above in relation to the refinancing mentioned and also possible funds available going forward.

[123asd] 29/2/2012 08:27

I agree, good detail and timely updating - what a contrast to Firestone.

[onceabroker] 29/2/2012 08:25

baffins

yes you were correct in that post, and well done, i was expecting the the next news flow to be in April, so i was pleasantly surprised this morning. it just goes to show the company have a excellent transparency procedure, if this was FDI management, they probably would have delayed news until the expected half year announcement, that way they could have taken 6 to 7 weeks off the crusher timeline order, and announced that the crushers were ordered weeks ago and will be installed in 2 to three weeks, that's why i like this company, very transparent.

best regards

John

[baffins] 29/2/2012 08:02

"EARLY PRESENT"?

"unexpected"? - not at all!

Just as expected as detailed in post 639 ;-)

Nothing earth shattering at this early stage but progress is evident with minor hiccups.

The following stands out for me in such a short time frame:

"11 diamonds in excess of 10.8 carats (with a combined weight of 245 carats) have been recovered during this ramp-up phase, including an 82 carat dodecahedron, presenting a yellow/brown hue with few inclusions. This complements a number of small purple and yellow fancy diamonds recovered to-date from the Kao Mine during its development phase and demonstrates a potential for some large and fancy stones."

Also it is obviously comforting the grades remain in-line with with previous estimates unlike another miner who finally came clean yesterday.

It is also worth mentioning SEN in SA, they have 10,994 carats on hand from production. Last time these went to sale they achieved $627 per carat. Also I have learned that the 37 carat stone mentioned in the interims was sold for c.$9,500 per carat which is approx $356,000.

[onceabroker] 29/2/2012 07:53

WE HAVE HAD A EARLY PRESENT FOLKS

a excellent update, unexpected, but shows that we are on track for 200,000 ct this year, we have the minor hiccup of the additional crusher requirements, but they are on order and will be installed 8 to 12 weeks time, main item is that they make no difference to full year output. the Sp should reflect the start of full commercial production which is ....tomorrow

he mine will move into Phase 1 commercial production, in-line with the requirements of the mining agreement with the Government of Lesotho, on 1 March 2012.

11 diamonds in excess of 10.8 carats (with a combined weight of 245 carats) have been recovered during this ramp-up phase, including an 82 carat dodecahedron, presenting a yellow/brown hue with few inclusions. This complements a number of small purple and yellow fancy diamonds recovered to-date from the Kao Mine during its development phase and demonstrates a potential for some large and fancy stones.

which make-up the Kao Main Pipe Complex (KMPC) and, as a result, the geological model and contained resource have been refined to provide a 189Mt kimberlte resource of c.12.8m carats (c.4m indicated and c.8.8m inferred), with an additional 1.7m carats at a deposit level of confidence.

the Company plans to install two new cone crushers: one to replace the two existing secondary crushers; and one to increase capacity within the tertiary crushing circuit, by working in parallel with the current existing crusher. These replacement crushers are expected to cost c.US$2m in total and will be delivered and installed during an 8 - 12 week timeframe. Thereafter, these crushers should allow for the optimal and reliable processing of hardrock kimberlite ores.

The freshwater storage dam is almost complete and it is expected to be filled to capacity before the dry season commences in May, to provide a sufficient supply of water for the continuous operation of the 500tph processing plant. The new, state of the art sort house is being commissioned and will provide increased diamond sorting capacity and improved security.

the Kao Mine is now expected to become net cash flow positive in Q2:CY'12, rather than Q1:CY'12, as previously announced. However, the new crushers are expected to increase secondary and tertiary crushing capacity from the current levels to 250tph during the second-half of the Company's financial year, allowing guidance to remain unchanged at 200Kcts for FY2012.

As at 25 February 2012, 11,245 carats had been sold on tender in Johannesburg at an average price of US$237.60/ct. A further 7,200 carats are currently on tender and another 8,400 carats have been exported for tender in early March 2012.

North West Province, South Africa

As at 25 February 2012, the alluvial operations in the North West Province had processed 1,508,223 tonnes, producing 10,994 carats, with an average grade of 0.73cpht, in line with the production plans.

[onceabroker] 27/2/2012 08:55

Turning the Corner?

27.02.2012

There was good news from the Far East last week with record attendance of 38,000 buyers (up three per cent over last year) at the HKTDC Hong Kong International Jewellery Show which ended on Monday, Diamond World reports in its Weekly E-Post. But more important than the absolute numbers was the indication they provided that the slump the industry has experienced over the last six months may have begun to bottom out.

Most exhibitors have reported that business was above expectations, and there was reasonable demand for sizes upto 3 cts in various cuts, including rounds and fancies. Most of the demand was from China, India and the Middle East; buyers from the older markets are, understandably, still hesitant. With sections of retailers back to buying and trading picking up, the mood on the exhibition floor was significantly more buoyant than what had been seen at earlier shows this year. The immediate trigger has been restocking, as some amount of inventory has been cleared during the recent Chinese New Year.

Perhaps too much was read into the positive signals of last year's HK Show, leading to a degree of over estimation and speculation. For that to be repeated this year would be truly disastrous. So caution will have to continue to be the industry watchword in the months ahead. While there does seem to be a turn for the better, the industry has only passed one milestone, albeit an important one, on the road to recovery.

Rough&Polished



best regards

John

[baffins] 24/2/2012 20:50

Looking forward to next week or maybe week after ;-)

Hopeful of an update and news of a couple of tenders.

[baffins] 11/2/2012 15:42

Hi federiconitidi,

To now "acquire more than 25% stake" in NAD it would involve excess of 76.15million shares since the increase of shares due to the Jarvine involvement.

As you correctly point out Jarvine's current stake is >32% (98,665,158 shares) and you may want to note the date of the transaction did not occur until 19th Jan 2012 which was made public the following day, the 20th:



My point is I do not believe 76.15million have been trading during the time since the transaction was announced and also, if somehow they had some fairly regular "holdings" RNS's appear to be missing.



I can only guess that if the story holds any water it will be a case that Jarvirne Inc, being part of UVERCON Group, have transferred a part of their >32% stake to the UVERCON Group.

[federiconitidi] 11/2/2012 13:49

(Also posted on LSE)

Other news published this morning, 11/02/12 on following russian website which may be of interest.



Please find Google Translation below.

"

Cyprus Uvercon Investments Limited, through which in 2007 acquired Khoroshkovskiy channel NTN from Edward Prutnik may acquire more than 25% stake in dealing with diamond mining in Africa Namakwa Diamonds Limited (Bermuda), a major shareholder of which is E.Prutnik.

According to the Antimonopoly Committee of Ukraine (ACU) on Friday, he issued a permit Uvercon Investments.

Agency "Interfax-Ukraine" has not yet managed to get comments of a possible transaction.

As reported in mid-January this year, Jarvirne Limited (British Virgin Islands) E.Prutnika increased its stake in a company listed on the London Stock Exchange Namakwa Diamonds to 10.46% and 32.39% for the capitalization of trade credit Jarvirne $ 16 , 03 million

In addition, January 12, 2012 Namakwa said that already received from the Jarvirne $ 25 million of the agreed upon in September, $ 40 million loan and expects to receive before the end of the month another $ 6 million, which allows assessment of the most promising field Kao in Lesotho.

Jarvirne is a shareholder, financial and trading partner Namakwa since 2010. In early September 2011 Namakwa has signed an agreement with the Jarvirne bringing a two-year $ 40 million loan to finance the project Kao in Lesotho and general corporate purposes. The collateral for the loan performs, among other things, the 62.5% share in the Namakwa Storm Mountain Diamonds (Pty) Ltd, carrying out a project Kao.

According to the report Namakwa for the fiscal year ended August 31, 2011, its revenue grew by 13.9% - to $ 93.3 million, but a negative EBITDA increased by 51.2% - to $ 32.5 million and a net loss - 2 5-fold, to $ 76.7 million The company notes that in the past fiscal year, it wrote off $ 24.9 million, while the previous year write-off were not available."

Regards,

fede

[federiconitidi] 11/2/2012 13:35

Hi everyone,

I've been following this thread for few months now but actually this is my first post here. I bought into NAD in sept 2011 after the big slump and been following closely all developments that happened since then – arrival of Richard Collocott and new BoD, recapitalisation in Nov, batla case in Dec an appeal, IMS of Jan.

I also bought again to average down a bit as the share price decreased.

I have to say I really enjoyed reading the opinions that you guys posted on the various boards, so many thanks to you all - John, didge, baffin etc for sharing your views.

I Just want to bring to your attention a news I found this morning on a ucranian website:



From Google translator:

"Provided by permission of the company «UVERCON INVESTMENTS LIMITED» (Nicosia, Cyprus) to purchase shares of the company «Namakwa Diamonds Limited» (Hamilton, Bermuda), which provides excess of 25% of votes in the supreme governing body of the issuer."

Apparently Jarvirne is part of Uvercon Investment which is ultimately owned by Mr Prutnik. My understanding of the last RNS Jarvirne currently helds 32% of NAD issued shares/voting rights so I was wondering whether the news above refers to a different stake?

I have also posted this message on LSE.

Regards,

fede

[onceabroker] 10/2/2012 10:03

diamond prices continue to edge up, 0.3% up again, wonder if it will break the 160 mark next week

best regards

John

[onceabroker] 10/2/2012 07:30

i have no time for your accusations and tantrums!!

best regards

John

[baffins] 09/2/2012 21:32

onceatrader,

FYI, and as a matter of fact. Never once have you ever asked if you could copy my contributions be it NAD or FDI. You have just gone ahead and done it on more than one occasion (and please to not try and edit your previous advfn posts to contradict this as the proof is there on the NAD BB).

As I said previously, no big deal but certainly goes against the grain of BB etiquette despite making amends following the incident(s).

What is a big deal to me is your follow up comment that I "forgot" you asked my permission. You never asked permission and your comment of "i hope you don't mind, i posted it on iii" is certainly not a request for my permission so please do not even suggest otherwise. I am no forgetful fool so please do not make out that I am.

You said you knew your limitations...are you really sure? Selective misinterpretation of your own communication to validate yourself whilst accusing me of being forgetful is rather low in my book.

Regardless of the above, care to draw a line and start again with some wisdom I hope you have gleaned from this?

[onceabroker] 09/2/2012 19:00

FYI

onceabroker - 13 Dec 2011 - 08:44:56 - 571 of 633
baffins

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

best regards

John

[baffins] 09/2/2012 18:24

onceatrader,

I see you have been lifting some of my dated contributions and posting it over on iii without a single mention that it is not yours. In fact you have signed it off with your regards and name!

No big deal but certainly goes against the grade of BB etiquette.

You recently did the same involving some of my contributions on FDI but at least you mentioned it was not your input.

I have to question if you are actually capable of offering anything worthwhile given the instances I have highlighted above and also taking into consideration the incorrect information you was previously dishing out regarding the incorrect ore bodies.

[baldeagle5] 09/2/2012 16:26

Mira - more to it than that I'm sure.... Watch this space methinks.

[mirabeau] 09/2/2012 12:19

production just round the corner ala SHG

robbie burns looking in as well, a good value investor

[baldeagle5] 09/2/2012 12:18

Anybody any views here as to the volume here in recent days? Last time we saw this news came out on the dismissal of the court case...

[baffins] 09/2/2012 08:20

I should assume the company will collate all the news due and update the market in the very near future.

A friend of mine informs me there may also be a tender this month additional to the recent one held in Johannesburg between 18 - 27 January 2011. If this is the case I would expect this also to be reported in the update.

Certainly plenty of news due.

The 37 carat stone "is expected to realise significant value" stated the management and it is known that SEN does hold very high quality stones. I made a post on this a while back which I have copied below:

........."a 37.46ct diamond was discovered on the Company's operations on the South East Node, which is expected to realise significant value during the January 2012 sales process".

Significant eh, that sounds promising and we know this area produces very high quality stones such as the following previously reported:

26.74ct D Type IIa at $44,000 per carat

7.53ct rare vivid orange at $176,713 per carat

17.32cts stone with a sale price of $6,627 per carat

I should imagine this recent 37.46ct diamond find maybe a $0.4m stone at the very least and if this is the case it would be in the region of $10,600 per carat or maybe much more.

===============================================================

Not a good time to be thinking of selling out is my guess.