Diamond miners’ results fail to sparkle

Irish mining company, Botswana Diamonds has reported a 25% widening in its first-half losses.

The John Teeling-chaired company — which has interests in Botswana, Cameroon, and Mozambique — yesterday reported pre-tax losses of £259,000 (€306,000) for the six months to the end of December. This was up by 25.1% on the £207,000 pre-tax loss recorded by the AIM-listed firm for the corresponding period a year earlier.

Total comprehensive losses for the period amounted to £282,000, up from £230,000, while losses per share fell from 21p to 19p. Operating losses increased from £177,000 to £256,000. At the halfway stage of its current financial year, Botswana’s total assets stood at £6.56m, up from just over £6m a year earlier.

On an operational footing, Botswana said talks with Korean company CNK Mining concerning a potential joint venture in Cameroon are ongoing, although discussions are “slow and cover a wide range of possibilities”.

However, the “outline of an operating joint venture” has been agreed with an unnamed diamond producing partner concerning a series of targets in the Orapa region of Botswana. However, the move awaits final approval by the potential partner’s board.

John Teeling said that while diamond firms’ share prices were not firing as yet, the prospects for the sector remained good.

“While the fundamentals for diamonds look extrem-ely robust, with the Bain report predicting until 2020 and beyond, a 6% annual growth rate in diamond demand against an expected 2.5% growth rate in supply, this is not transferring into diamond companies’ share prices.

“Explorers, in general, are out of favour. This is normal at this stage of the economic and stock market cycles. As confidence returns to economies, investors will be prepared, once again, to take greater risks.

“Botswana Diamonds has good ground in the best diamond address in the world. It has an outstanding partner, with technology never before used in Botswana. These factors decrease the risk and improve the chances of our success.”

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