Namakwa Diamonds secured a $10 million loan from Sputnick Limited as it faces operational challenges at its Kao diamond mine development in Lesotho.
The company explained that its current $40 million loan facility with Jarvirne Limited is insufficient to meet the group’s short-term funding requirements due to operational challenges at Kao and the delayed execution of a potential sale of non-core assets. Namakwa has drawn $33.2 million from the Jarvirne facility so far and an additional $2 million was made available to the company earlier in April.
Issues pertaining to the secondary crushing circuit for a processing plant at Kao restricted short-term treating of high-grade ore during the ramp up to phase one of commercial production at the mine. As a result, the processing plant is expected to reach its design capacity of 500 tonnes per hour in June 2012.
The delays have caused Namakwa to reduce its production target at Kao to 170,000 carats for the fiscal year that ends on August 31, 2012, from its previously stated target of 200,000 carats. The company is expecting to be net cash generative positive in July 2012.