HomeCentral AfricaPangea hopes to turn company around

Pangea hopes to turn company around

Diamond sorting at
Pangea’s Cassanguidi
sorting unit
London, England — MININGREVIEW.COM — 23 October 2009 – AIM-listed Pangea DiamondFields Plc “’ which nearly hit rock bottom in the financial crisis of the past 18 months “’ is banking on recovering diamond prices and an upturn in the wider US economy to help turn the company around.

In a statement issued here, the diamond company added that it saw its new Cassanguidi mine in Angola as underpinning its prospects.

“We have a fair inventory of diamonds in the ground which we’d obviously like to bring to full value,” Boris Kamstra “’ who takes over as chief executive on November 1 “’ told Reuters.

Pangea “’which has seven projects in Angola, South Africa, the Democratic Republic of  Congo (DRC) and Central African Republic “’ revealed last month that it had US$1.54 million (R12 million) in cash reserves.

The company was among a host of junior miners which struggled as rough diamond prices fell significantly in the global financial crisis. It was for this reason that, nearly a year ago, the company was forced to heavily dilute its share capital to raise about £8.7 million (R105 million).

Although diamond prices remain substantially below pre-September 2008 levels, signs of a recovery in the U.S “’ where half the world’s diamonds end up in jewellery “’ are giving the company reasons to be optimistic.

“Rough diamond prices have been recovering since the spring and are worth about 70% of target prices,” Kamstra said, noting that the company should be able to survive on anything over 50%.

He added that his first priority would be getting Cassanguidi up to full capacity by the year-end, and then to develop Bakerville in South Africa, which is in the process of getting licence approval and is expected to cost US$8 million (R64 million) to build.

Kamstra said Cassanguidi at full capacity should move the company to a cash neutral or even a cash positive position.