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Trans Hex Warns of $7M Loss in Fiscal 2011

May 31, 2011 2:59 AM   By Avi Krawitz
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RAPAPORT... Trans Hex warned investors to expect a loss for its fiscal year as revenues fell due to the underperformance of its diamond grades and the impact of a stronger South African rand against the dollar. The diamond mining company said it expects to post a loss of $6.6 million (ZAR 45.1 million) for the year that ended on March 31, 2011, compared to a profit of $3.1 million (ZAR 21.6 million) in fiscal 2010. The full results are scheduled to be released on June 2.

Trans Hex noted that its sales revenue fell 8 percent to $95.6 million (ZAR 658 million). The decline came “primarily as a result of grade underperformance and the decision to temporarily suspend stripping at the Baken operations” and added that the bottom line was “also affected by stronger diamond prices in the second half and a strong rand.”

Production at Trans Hex’s South Africa operations declined 25 percent year on year to 69,508 carats. The company also has operations in Angola, with its Somiluana mine achieving sales of $19.3 million during the year.

Trans Hex recently agreed to acquire Namaqualand Mines from De Beers Consolidated Mines (DBCM) for $33 million (ZAR 225 million) as part of a consortium, 50 percent of which it owns. The deal was signed in May of the new fiscal year and is pending final closure.  

The company said it ended fiscal 2011 with net cash of $3.2 million (ZAR 21.9 million), down from the balance of $5.8 million (ZAR 40.2 million) it posted for the previous year.

 

Tags: Avi Krawitz, diamonds, mining, Trans Hex
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