Namakwa Diamonds Acquires $10M Loan for Lesotho Mine
4/12/2012 4:09:17 AM Shira
Namakwa Diamonds, the South African diamond company whose mining division is focused on the Kao Mine in Lesotho, has acquired a $10 million loan from investment group Sputnick Limited to assist in operational challenges, cover expenditures, and overcome unexpected delays in the planned sales of some of its holdings at its Kao diamond mine development. The Kao Mine is the 4th largest individual kimberlite pipe in South Africa and Lesotho.
Although it had received a $40 million loan from Jarvirne Limited, the company says that that loan is not sufficient to cover short-term costs and meet the operational needs of Kao mine—mainly issues related to a secondary crushing circuit; a manufacturing and design fault was identified with the processing plant's scrubber and the scrubber is scheduled to be reinstalled in May. Operational delays related to those issues have forced Kao mine to reduced its production target from 200,000 carats to 170,000 carats for the 2012 fiscal year (that ends on August 31, 2012).
The loan to Namakwa Diamonds by Sputnick Limited has a provision that Namakwa take no more loans against its Jarvirne facilities and that the company reassess its financial needs. If Namakwa cannot repay the loans, a default will be triggered and be required to pay higher interest rates.
In other recent news, Namakwa recently announced the appointment of an Independent Non-Executive Director for Namakwa Diamonds.