Trans Hex Group posts full-year results, sees losses

Mining company Trans Hex has released its full year results for the period ended, 31 March 2014. The group holds a current market cap of R402.9 million, and is trading 13.43% up on the year.

Financial Headlines

• Sales revenue amounted to R695,7 million (2013: R751,3 million)
• Group loss after tax from continuing operations was R5,1 million (2013: profit of R65,0 million)
• Profit after tax from discontinued operations amounted to R27,8 million (2013: R20,4 million)
• Group net profit for the year was R22,7 million (2013: R85,4 million)
• The Group's net cash position at the end of the year was R397,6 million (2013: R383,4 million)
• Earnings per share amounted to 20,7 cents (2013: 79,7 cents) and headline earnings per share amounted to 9,8 cents (2013: 69,9 cents)
• Net asset value per share was 521,0 cents (2013: 505,0 cents)
• In Angola, Somiluana sales amounted to US$32,4 million (2013: US$14,9 million).

Regarding Trans Hex's outlook, the group has made the following statement, "Trans Hex has reached agreement with De Beers Consolidated Mines Proprietary Limited (DBCM) which addresses the State's 20% interest in Namaqualand Mines in order to close the transaction originally signed on 6 May 2011. As a result, the sale agreement between DBCM, Emerald Panther Investments 78 (Pty) Limited and Trans Hex is being amended to provide for the creation of a Special Purpose Vehicle to hold the State's 20% share in EPI. The effective date of the acquisition is expected to be 31 October 2014.

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 2015 financial year. Thereafter mining will focus on shallow deposits and lower grade stockpiles.

The Richtersveld Operations are expected to improve on the carat performance of the previous year due to increased volumes and grade. South African production for the 2015 financial year is expected to be 55 000 carats.

In Angola, Somiluana is increasing production capacity through internal cash flows and external funding will not be pursued. Production results and geological work through drilling and bulk sampling indicate that carat production for the 2015 financial year will surpass the 72 000 carats achieved in 2014.

Trans Hex is continuing to wind up the discontinued Luarica and Fucaúma projects in Angola.

Tight controls over cash and costs will continue to be exercised in all areas of the Group's business. Rough diamond prices are expected to remain stable in the coming financial year as the US market continues to show signs of recovery and increased demand from China and India is set to persist.

Based on the market outlook, interest and strong demand for Trans Hex production are expected to continue for the foreseeable future."

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