23rd Dec 2008 07:00
Namibian Resources Plc - 3rd Quarter 2008/9 Progress Report
Progress report for period from 1st September to 30th November 2008.
General.
During the quarter production by Sonnberg Diamonds (Namibian Resources' 100%-owned subsidiary) continued to be derived from the Salzpfanne and the East Salztal North deposits. Sampling was also undertaken in the East Salztal South and Hannahtal North deposits. Total production from all sources was 502 ct at an average diamond size of 0.36 ct/st. Plant throughput was 18,200 tonnes, up from 15,300 tonnes in the previous quarter. The decline in production from the previous quarter (663 ct) was due to lower grades encountered.
Mining.
Mining continued in the Salzpfanne deposit during the quarter. During September the grade in Block B (0.02 ct/t) declined well below its expected level and mining was then moved to Block D, farther north in the deposit. Much higher grades were encountered there (0.05 to 0.08 ct/t) but at an expected somewhat lower average diamond size (0.36 ct/st).
Mining at the East Salztal North deposit has moved from north to south of the screening plant which has necessitated the mining of marginal sections of the deposit in order to open up the centre. The grade therefore fell to slightly over 0.01 ct/t with a consequent decline in production from this source. This screening plant was used for the prospecting described below.
Prospecting.
During the quarter prospecting was carried out at both East Salztal South and Hannahtal North deposits. At East Salztal South the follow-up sampling to the results previously reported was disappointing and diamonds appear confined to two distinct sections of this deposit. At Hannahtal North positive samples were returned throughout the deposit.
Subsequent events.
During the latter part of 2008 the world diamond market has become increasingly dysfunctional. Many diamond companies have announced plans to cut-back production in the coming months. Sonnberg Diamonds operates under contract to Namdeb (the 50:50 JV between the Namibian Government and De Beers) and, in December, as part of their response to the crisis in the diamond market, Namdeb imposed quotas for 2009 on all its contractors. Sonnberg's quota is above the level of its recent production but below planned output levels. The quota would therefore not in itself have restricted Sonnberg's operations in the last quarter. The impact of the production quota on Sonnberg's operations, however, will be entirely dependent on the values received for the diamonds produced. Prior to November, the values received by Sonnberg for its diamonds were strong and, in October, a record value, relative to average diamond size, in Namibian dollar terms, was achieved. Sonnberg produces very high quality diamonds of good average size and the impact of the diamond market crisis on the values received by Sonnberg is unclear.
Sonnberg is fortunate to have the support of Namdeb in these difficult times and is continuing to reduce its operating costs to a level that ensures its viability and ability to respond to a future upturn in the diamond market.
Tony Carlton
Chief Executive Officer
Contacts
Namibian Resources Plc
Tony Carlton - Telephone 020 8726 0900
Collins Stewart - Nominated Adviser to the Company
Adrian Hadden - Telephone 020 7523 8350
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