Cape Town, South Africa — 05 June 2012 – JSE-listed diamond producer Trans Hex’s latest standoff with an Angolan partner centres on the expansion of its sole operating asset in that country, as none of the parties are willing to contribute their own funds to advance production at the mine.
Miningmx reports that Trans Hex CEO Llewellyn Delport said in a statement here that the company’s Somiluana mine in Angola – in which Trans Hex held a 33% stake and acted as operator – would now be looking at third party finance to take the asset forward.
He added that Somiluana’s entire production of 42,000 carats during Trans Hex’s 2012 financial year had been mined with pilot production equipment.
Delport made it clear that Trans Hex would follow the lead should its partners decide to contribute from their own pockets after all. Trans Hex had cash reserves of R347 million at the end of March.
“The latest contract between the partners said we’ll do funding equal to each one’s shareholding,” said Delport. “They don’t see their way clear, so we don’t see our way clear. It’s not that the partners don’t have money,” he added. “They have deep pockets but very short arms.”
Delport also didn’t came across convinced that the project would find third-party funding easy to come by, predicting that Somiluana’s production in 2013 would not exceed that of last year.
“Third-party finance is difficult to get in South Africa and even more difficult in Angola,” he said.
The impasse over Somiluana comes as Trans Hex continues to try to exit from Luarica and Fucauma, two discontinued assets in Angola. The Angolan state revoked the mining rights for these operations in October 2011, as no mining activities had been performed there since 2009.
The parties have been negotiating over the termination of the mining agreements since 2009,
Source: Miningmx. For more information, click here.