Namakwa Posts $19 Mln Loss, Signs Deal with Harry Winston

South African diamond mining company Namakwa Diamonds’ pre-tax loss totaled $19.409 million for the six months ended February 29. Its revenues came to $12.426 million. The company produced 9,517 carats in the six month period.

During the period, Namakwa acquired a total of 9,533 carats of rough diamonds from third-party producers for polishing at an average cost of $785 per carat. In addition, the company sold most of its lower-quality inventory – a total of 13,098 carats for an average of $481 per carat.

The company held its Initial Public Offering (IPO), raising £87 ($172.5 million), before costs, and was admitted to the London Stock Exchange in December 2007.

Namakwa also announced that it concluded a marketing agreement with Harry Winston Inc. in March, establishing a supply arrangement for the company to supply Harry Winston with high-value polished diamonds for sale through its stores. Under the terms of the agreement, the two parties share in the retail margin achieved for specific stones distributed through the structure.

Nico Kruger, CEO of Namakwa Diamonds commented, “Despite the difficulties faced by Namakwa’s mining operations following the Eskom electricity interruption, the unusually heavy rainfall during the period and the lower than expected recovered grade, the business as a whole made good progress due to the blend of the mining and beneficiation operations. We have implemented measures to mitigate the adverse factors which resulted in this period's disappointing mining performance.”