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Since 2007, Namakwa Diamonds has been implementing a well-defined strategy to develop its integrated business model, expanding its Mining Division and leveraging off the market knowledge of its Trading & Beneficiation Division to capture increasing margins along the diamond value pipeline.
This positioning of businesses across the diamond value pipeline is Namakwa Diamonds' principal point of differentiation from its public market peers, who are predominately obliged to sell their monthly run-of-mine production in tenders on the open diamond market. |
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| Mining Division |
The expansion of the Mining Division, through the consolidation of smaller production areas in the North West Province of South Africa and the acquisition of a kimberlite mine in Lesotho has seen Namakwa Diamonds emerge as a diamond miner with the opportunity for scale. From a small-scale miner of 6,662 carats in FY 2007, the Company produced 82,925 carats for FY 2010, an increase of 1,145% over a three-year period.
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| Lesotho |
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In Lesotho, the Company now has the opportunity to develop its first kimberlite mine into commercial production through its subsidiary Storm Mountain Diamonds.
Storm Mountain Diamonds is targeting production of 17,000 carats for FY 2011, and 297,000 carats for FY 2012 with a four-month ramp-up period and then 376,000 carats in the first 12 months of full commercial production. Subject to the timely application of capital expenditure, Phase 1 commercial production is expected to start by September 2011.
Namakwa Diamonds currently holds 75% of the equity share capital of Storm Mountain Diamonds, including (as part of its agreement with the Government of Lesotho) 12.5% of the equity, which is held on trust for local Basotho nationals, pending a public offer in Lesotho.
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| South Africa |
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In the North West Province of South Africa, with the implementation of large scale mining, tighter geographical controls and advanced dense media separation (DMS) recovery techniques, the Company has consolidated a project area which can provide a consistent production flow of approximately 55,000 to 65,000 carats per year without significant additional capital expenditure.
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Exploration & Development Assets
As well as its core production assets, the Mining Division also has a number of exploration and development assets in South Africa and Namibia and access to further resources in Angola. |
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Trading & Beneficiation Division
Against the Mining Division's background of expansion and development, the Trading & Beneficiation Division continues to increase sales volumes and broaden its footprint across the active downstream markets of India and South East Asia, where demand is currently outstripping the ability of the major diamond producers to increase supplies.
From a trader of 13,098 carats of rough diamonds in FY 2007, the Company sold 442,067 carats of rough diamonds in FY 2010, an increase of 3,275% over a three year period, demonstrating the capability of the Trading & Beneficiation Division's platform to sustain a significant increase in sales volumes from the anticipated future production of the Mining Division. |
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