Johannesburg, South Africa — MININGREVIEW.COM — 01 June 2010 – Diamond producer Trans Hex says it will provide full details on the size and capital cost of its new Luana mine in Angola by the end of September at the latest.
CEO Llewellyn Delport originally told Miningmx he had hoped to provide those details when Trans Hex published its 2010 annual results, which were released yesterday.
He was however, able to provide one key update on Luana, which is that Trans Hex will have to kick in only its 33% share of the capital expenditure required to build the mine. That’s a huge improvement on the typical previous Angolan financial structure for diamond miners, where the foreign mining company had to foot the entire capex bill itself.
Delport said: “Trans Hex is not required to front-load the capital requirements at Luana. In terms of the shareholders’ agreement, the company will raise capital through debt and a rights issue.”
Trans Hex shares recovered from a 12-month low of 160c to a high of 530c over the past 12 months, but have pulled back to current levels of around 400c.
Asked about this share price performance by an analyst at yesterday’s presentation, Delport replied that diamond companies generally were not performing as well as might be expected, and that he believed that Trans Hex had been affected in particular by its problems in Angola,
He said he believed market perceptions would change once Trans Hex started to put positive results on the table from the Luana development.
Trans Hex reported a taxed profit of R22 million for the year to end March 2010, compared with a R798 million loss in the 2009 financial year.
Asked about possible future expansion elsewhere in Africa, Delport replied: “We decided to solve our challenges in Angola and consolidate our business there before reconsidering our position vis-à-vis the rest of Africa.”