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FINANCIAL RESULTS (YEAR ENDED MARCH 31, 1998)
TORONTO, CANADA - TRANS HEX INTERNATIONAL LTD. (TSE :THI) ANNOUNCED TODAY THE
RESULTS OF ITS OPERATIONS FOR THE FISCAL YEAR ENDED MARCH 31, 1998, ITS SECOND
FULL YEAR SINCE INCORPORATION.
TRANS HEX INTERNATIONAL IS WELL POSITIONED TO ADVANCE ITS FOUR MOST PROSPECTIVE
DIAMOND PROPERTIES, TWO IN NAMIBIA AND ONE IN EACH OF ANGOLA AND BRAZIL,
THROUGH THE NEXT IMPORTANT AND EXCITING STAGES OF THEIR EXPLORATION PROGRAMS.
THE COMPANY IS WELL FINANCED, AT MARCH 31, 1998 HAVING CASH AND CASH
EQUIVALENTS OF $4.98-MILLION AND WORKING CAPITAL OF $5.62-MILLION.
AT NORTHBANK, ON THE NORTH BANK OF THE ORANGE RIVER NAMIBIA, WIDE SPACED
DRILLING COMPLETED DURING THE YEAR HAS DEMONSTRATED A DRILL INDICATED RESOURCE
OF 30 MILLION CUBIC METRES OF GRAVEL DEPOSITED IN A FOUR KILOMETRE BY 900 METRE
PALEOCHANNEL. CONSTRUCTION OF A 100 TONNE PER HOUR DENSE MEDIA SEPARATION
PROCESSING PLANT IS APPROXIMATELY 35 PER CENT COMPLETE AND THE COMMENCEMENT OF
PROCESSING OF TWO BULK SAMPLES IS SCHEDULED FOR SEPTEMBER. IN TOTAL SOME
75,000 BANK CUBIC METRES OF BASAL GRAVEL WILL BE TREATED THROUGH THE DMS PLANT.
A DEFINITIVE AGREEMENT HAS NOW BEEN SIGNED FOR THE COMPANY'S PARTICIPATION IN A
JOINT VENTURE IN THE LUNDA NORTE PROVINCE OF ANGOLA. A GENERAL MANAGER FOR
ANGOLA HAS BEEN APPOINTED, AN OFFICE ESTABLISHED AND A PROGRAM OF WORK WITH
CAPITAL AND OPERATING COST ESTIMATES IS BEING PREPARED FOR THE ESTABLISHMENT OF
A MINING UNIT ON THE DIAGEMA PROPERTY LATER THIS YEAR. AN INDEPENDENT
CONSULTANT'S REPORT, PREPARED PRIOR TO THE COMPANY'S INVOLVEMENT IN THE
PROJECT, INDICATES THAT ALLUVIAL DIAMOND RESOURCES ON A 35 HECTARE PORTION OF
THIS 25,000 HECTARE CONCESSION AREA CONTAIN AN ESTIMATED 148,760 CARATS.
SUBSTANTIAL OPPORTUNITY EXISTS FOR INCREASING THESE RESOURCES.
IN BRAZIL, TRANS HEX INTERNATIONAL CAN EARN A 50 PER CENT INTEREST IN THE RIO
GRANDE ALLUVIAL DIAMOND PROJECT THROUGH THE FINANCING OF US$2-MILLION OF
EXPLORATION EXPENDITURE. THE COMPANY'S GENERAL MANAGER FOR BRAZIL HAS COMMENCED
WITH THE NECESSARY DUE DILIGENCE. ARTISANAL ACTIVITIES IN THE AREA INDICATE A
GRAVEL THICKNESS OF TWO TO FOUR METRES, BELOW MINIMAL OVERBURDEN, CONTAINING
DIAMONDS OF HIGH QUALITY, AVERAGING IN EXCESS OF $200 (U.S.) PER CARAT.
THE COMPANY RECENTLY CONCLUDED A MEMORANDUM OF UNDERSTANDING WITH TERRADEX
(PROPRIETARY) LIMITED OF NAMIBIA, WHICH HAS BEEN GRANTED EXPLORATION RIGHTS TO
THREE AREAS ALONG THE SKELETON COAST BETWEEN THE UGAB RIVER MOUTH IN THE SOUTH
AND LATITUDE 20 DEGREES S IN THE NORTH. THE COMPANY IS ENTITLED TO A 90 PER
CENT INTEREST IN A JOINT VENTURE COMPANY TO BE FORMED. THE THREE SKELETON
COAST PROPERTIES HAVE A COMBINED AREA OF 41,538 HECTARES AND EXTEND ALONG 85
KILOMETRES OF COASTLINE AND UP TO FIVE KILOMETRES OFFSHORE. THE SUB-MARINE
DEPOSITS WHICH ARE TO BE THE FOCUS OF THE COMPANY'S PLANNED EXPLORATION HAVE,
ACCORDING TO AVAILABLE RECORDS, NOT BEEN EXAMINED BEFORE.
SINCE ALL OF TRANS HEX INTERNATIONAL'S PROJECTS ARE AT THE EXPLORATION STAGE,
THE COMPANY HAS NO REVENUE OTHER THAN INTEREST EARNED ON ITS WORKING CAPITAL
FUNDS. LOSSES FOR FISCAL 1998 TOTALLED $20.92-MILLION, OR $1.74 PER SHARE,
COMPARED TO A LOSS OF $3.98-MILLION, OR 72 CENTS PER SHARE IN FISCAL 1997.
AMOUNTS EXPENDED ON ACQUISITION AND EXPLORATION OF MINERAL PROPERTIES
SUBSEQUENTLY DETERMINED TO BE UNECONOMIC, ARE WRITTEN OFF AND CHARGED TO
INCOME. THE LOSS FOR 1998 INCLUDES ACCUMULATED CHARGES OF $8.94-MILLION,
$3.30-MILLION AND $7.28-MILLION IN RESPECT OF THE SUNDA SHELF (INDONESIA),
ACORDO (BRAZIL) AND BAMINGUI (CENTRAL AFRICAN REPUBLIC) PROJECTS RESPECTIVELY.
GENERAL AND ADMINISTRATION COSTS IN THE YEAR ENDED MARCH 31, 1998 INCREASED TO
$1.24-MILLION (1997: $0.77-MILLION). SALARY AND CONSULTING FEES INCREASED AS A
RESULT OF INCREASES IN BOTH EMPLOYEE AND CONTRACT STAFF LEVELS; OFFICE AND
ADMINISTRATION COST INCREASES WERE ATTRIBUTABLE TO THE OPENING OF AN OFFICE IN
TORONTO IN JANUARY 1997; AND AN INCREASE IN PRINTING, MAILING, CONFERENCE AND
INFORMATION RELEASE ACTIVITIES RESULTED IN HIGHER OVERALL INVESTOR RELATIONS
COSTS.
ON NOV. 28, 1997, THE COMPANY COMPLETED A PRIVATE PLACEMENT OF 2,775,000 SHARES
AT $1.40, FOR GROSS PROCEEDS OF $3.89-MILLION. TRANS HEX GROUP SIGNIFIED ITS
COMMITMENT TO THE COMPANY BY SUBSCRIBING FOR THE ENTIRE ISSUE, THEREBY
INCREASING THEIR INTEREST TO 71.84 PER CENT (OR 9,975,001 SHARES) OF A TOTAL OF
13,884,520 ISSUED SHARES, OR 63.40 PER CENT OF 18,887,758 SHARES ON A FULLY
DILUTED BASIS. IN ADDITION, AT MARCH 31, 1998 THE COMPANY WAS INDEBTED TO TRANS
HEX GROUP IN THE AMOUNT OF $2.79-MILLION. THIS LONG-TERM DEBT IS INTEREST FREE
AND TRANS HEX GROUP HAS UNDERTAKEN NOT TO CALL THIS LOAN DURING THE 1999 FISCAL
YEAR, UNLESS AN ALTERNATIVE SOURCE OF FINANCING HAS BEEN ARRANGED. GIVEN THE
COMMITMENT BY TRANS HEX GROUP TO FINANCE THE EXPLORATION IN NAMIBIA ON TERMS
SIMILAR TO THOSE ABOVE, THE COMPANY HAS SUFFICIENT FINANCIAL RESOURCES TO
UNDERTAKE ALL OF ITS CURRENT PLANNED EXPLORATION PROGRAMS AND CAPITAL EQUIPMENT
PURCHASES DURING THE FORTHCOMING YEAR.
TRANS HEX INTERNATIONAL LTD. IS AN INTERNATIONAL DIAMOND EXPLORATION,
DEVELOPMENT AND MINING COMPANY WITH INTERESTS IN EXPLORATION PROJECTS AND JOINT
VENTURES IN NAMIBIA, ANGOLA AND BRAZIL. THE COMPANY IS A SUBSIDIARY OF TRANS
HEX GROUP LIMITED, THE SECOND LARGEST DIAMOND PRODUCER IN SOUTH AFRICA, WITH
WELL ESTABLISHED INDEPENDENT DIAMOND MARKETING FACILITIES.
FOR FURTHER INFORMATION PLEASE CONTACT :
D.M. (NIEL) HOOGENHOUT, PRESIDENT AND CHIEF EXECUTIVE OFFICER
091.416.363-5440
PETER W.A. WALKER, VICE PRESIDENT, EXPLORATION +27.21.92-1105
STEPHEN WOODHEAD, CHIEF FINANCIAL OFFICER 091.416.363-5440
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