Trans Hex final results 31 March 2015

Sales revenue for the year increased to R939.7 million (2014: R695.7 million). Gross profit was higher at R150.8 million (2014: R42 million), while profit attributable to owners of the parent from continuing operations came in at R170 million (2014: loss of R6 million). Furthermore, headline earnings per share from continuing operations was 58.3cps (2014: loss of 16.6cps).

Notice is hereby given of a cash dividend of 10 cents per share.

Lower Orange River Operations

Stripping operations in the Baken central channel will continue until the economically viable gravel in the main channel has been exhausted which is expected to be towards the end of the 2016 financial year. Thereafter mining activities will focus on shallow deposits and lower grade stockpiles.

Steady performance at Bloeddrif Mine is expected to continue.

South African production for the 2016 financial year is expected to be in the order of 53 000 carats, compared to 2015 actual production of 61 688 carats.

West Coast Resources (Pty) Ltd., South Africa

The final recovery plant at Kleinzee is currently in operation and is sampling and mining final recovery tailings. At Mitchell's Bay, exploration drilling is underway and a bulk sampling plant at Koingnaas will be sampling ahead of production. The construction of a production treatment plant is due to be completed towards the end of the calendar year. Net revenue from the treatment of the small remaining tonnages of final recovery tailings is not expected to cover project operational expenditure during the 2016 financial year. As this project is still in a start-up phase, a loss is expected for the 2016 financial year.

Somiluana - Sociedade Mineira, S.A., Angola

In Angola, Somiluana Mine continues to increase its production capacity through the reinvestment of surplus internal cash flows. Due to the encouraging results and in order to speed up the expansion of the production footprint, external funding is being considered. Production results and geological work through drilling and bulk testing indicate that carat production for the 2016 financial year will surpass the 94 000 carats achieved in 2015.

During the 2015 financial year, cumulative profits since the exploration phase exceeded the exploration costs previously expensed and a R12,7 million profit was recognised. This does not represent a full year's profit and an increase in the profit from this project for 2016 is therefore expected.

Trans Hex production realised firm prices in certain categories, but did encounter a drop in prices, particularly for the mid-range and lower-end stones. This weakening was in line with a softening of global prices towards the end of the financial year due to tight liquidity and thin trading margins. With diamond fundamentals remaining strong, the market is set to recover in the year ahead. Demand for Trans Hex production is anticipated to increase towards the end of the calendar year in line with expected market trends.

2015-06-01 07:37:13