27th Nov 2013 15:54
LONDON (Alliance News) - Namibian Resources PLC Wednesday reported a wider operating loss for the first half of its financial year as it wrote down the value of its suspended Sonnberg diamond mine in South Africa by GBP167,129, and it also had to amend the proposed expansion deal with J&J Group to meet South African ownership laws.
The company, which didn't earn any revenues in the half, reported a loss from operating activities after tax of GBP262,119 for the six months to end-August, compared with a loss of GBP177,157 a year earlier. It managed to cut administration and exploration expenses to GBP93,045, from GBP202,862.
Namibian is refurbishing the mobile processing plant at the Sonnberg mine, but may shift it to a new location once the refurbishment is completed, which would make it more valuable than the GBP364,004 carrying value the plant has on the company's books.
With Sonnberg out of action, Namibian spent the half focusing on completing a deal with J&J Group to try and expand its mining operations in South Africa.
Under a deal signed in May J&J unit Southern Goshawk Resources Ltd took over management of Naminbian's mining assets in South Africa.
However, due to South African exchange control rules, the companies have had to amend slightly a deal by which Namibian was to buy a Southern Goshawk unit that holds all its mining and exploration rights in exchange for a 29.9% stake in Namibian. They have now had to set up a subsidiary in South Africa with the same shareholding as proposed in the deal.
They signed a shareholders agreement Wednesday under which Southern Goshawk has the right to exchange its 29.9% stake in the new subsidiary for shares in Namibian when permitted to do so under South African law.
"The framework for the proposed expansion is therefore in place," Namibian said in a statement.
Namibian Resources shares were down 7.1% at 3.25 pence Wednesday afternoon.
By Steve McGrath; [email protected]; @stevemcgrath1
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