Namakwa Diamonds lowers FY 2012 production target

Namakwa Diamonds has reduced its financial year (FY) 2012 production target for the Kao Mine, in Lesotho to 170 000 carats due to operational challenges.
Namakwa announced in February that challenges related to the secondary crushing circuit for the 500 t/h processing plant at Kao had restricted the short-term processing of high-grade K6 ore during the ramp-up stage to Phase 1 commercial production.
As a result, the secondary and tertiary crushing circuits had been reconfigured, with two new cone-crushing units purchased.
The first unit was installed in late March and the second would be installed in June.
Meanwhile, the London-listed miner said that it had also entered a new $10-million loan facility with investment group Sputnick.
This comes after management had concluded that the previously agreed loan from shareholder Jarvirne would be insufficient to meet its short-term funding requirements.
Operational challenges at Kao mine, as well as the delayed execution of a potential sale of noncore assets and continued discussions with Kimberlite Investments Lesotho regarding the payment for its 12.5 percent share in mining contractor Storm Mountain Diamonds had also pushed Namakwa to get the new loan.
Sputnick would make the credit facility available to Namakwa until May 31, provided that no further amounts were drawn under the $40-million Jarvirne facility and a refinancing plan was established to determine the short-term goals of the company's borrowings.
Namakwa had to date drawn $33.2-million from the Jarvirne facility and a further $2-million was made available on April 5, following the grant of a waiver by Jarvirne of all conditions precedent to drawdown and the entry into the new loan.

Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished