Photo by: Reuters
JOHANNESBURG (miningweekly.com) – JSE-listed Trans Hex has swung to a profit of R13.9-million for the six months to September 30, compared with a loss of R24.7-million in the six months to September 30, 2015.
The company, in which a consortium led by businessperson Christo Wiese has acquired a stake, noted that demand for diamonds had slowed at the start of the second half of the calendar year, but that the market had recovered somewhat in September, boosting polished diamond sales.
Demand for rough diamonds is expected to remain firm during the remainder of the financial year to March 31, 2017.
The average dollar diamond price increased by 10.4%, mainly as a result of firmer global prices and higher demand, with sales positively impacted on by a 15.4% weakening of the rand against the dollar.
This was partly offset by a 19.6% decline in carats sold, with local production decreasing by 20.6% to 18 997 ct.
Sales revenue from the South African operations, nevertheless, increased by 2.5% year-on-year to R275.3-million for the six months under review.
The lower production was in line with a new operating model that was introduced at the Lower Orange River operations in February to extend the life-of-mine of these operations for as long as possible.
These changes have resulted in reduced overburden stripping and less gravel mined.
However, Trans Hex’s South African production for the financial year to March 31, 2017, is expected to be around 41 000 ct, compared with 2016 production of 48 435 ct.
OTHER OPERATIONS
West Coast Resources, which is located in the Northern Cape, and in which Trans Hex holds a 40% stake, produced 37 153 ct in the six months under review, up from the 4 821 ct produced in the prior comparable period.
Sales amounted to R78.4-million at an average price of $176/ct.
Production for the 2017 financial year is expected to be 80 000 ct, compared with the 24 930 ct produced in the 2016 financial year.
In Angola, production at the Somiluana mine, in which Trans Hex holds a 33% stake, increased significantly to 91 033 ct, owing to a 50.3% increase in average grade, partly offset by a 10.9% decrease in gravel treated.
Sales amounted to $32.5-million at an average price of $477/ct.
Trans Hex expects Somiluana’s carat production for the 2017 financial year to surpass the 99 500 ct produced in 2016.