Namibian investment company Trustco suspends operations at NNDC
Namibian investment company Trustco’s tilt into the diamond mining sector is finding operational traction elusive.
On Thursday, the company announced it had temporarily suspended diamond mining at the Northern Namibia Development Company (NNDC), as well diamond polishing operations at Morse Investments, pending the granting of a long-awaited mining licence.
In 2015, Trustco — with operations in insurance, banking, education and property — proposed paying R3.6bn for the diamond mining and polishing assets held under Huso Investments in a related party deal. The deal is due to be settled by a staggered issue of Trustco scrip based on profit performance. The vendor is Trustco CEO and majority shareholder Quinton van Rooyen.
In a commentary accompanying interim results to end-September, Trustco indicated that mining and polishing activities would be suspended until the mining licence had been secured from Namibia’s ministry of mines and energy.
Trustco said the NNDC had received a "preparedness to grant" letter for the licence from the ministry in late October.
But the mining licence is conditional on the approval of an environmental clearance certificate, which requires a scoping study and an environmental management programme.
Trustco said a project to initiate the environmental work started in November, adding that other conditions were under negotiation with the ministry.
Shares in Trustco closed unchanged at R7.45.
Trustco is now focusing on establishing operational readiness at its Meya Mine in Sierra Leone, which involves executing the first phase of the exploration programme within an 18-month project schedule.
Trustco said Meya had signed an off-take agreement with Morse Investments and the first diamond parcel of 2,646 carats recovered from the weathered material sold for $394,363 at an average of $149/carat. Three more parcels were exported in November, including the
476-carat Meya Prosperity Diamond, a 27.98 carat stone and a 3,058-carat parcel. The parcel will be sold in December.