The Transhex Group released its unaudited financial results for the six-month fiscal period ending September 30, 2018 recently, reporting a net profit of ZAR 52.0 million due to completion of the sale of its Lower Orange River property for a cash consideration of ZAR 72 million earlier in the year.

While the net profit of ZAR 52 million compared well with the net loss of ZAR 199.2 million during the same period a year earlier, and sales revenue from its continuing operations in South Africa increased to ZAR 136.2 million (September 2017: ZAR 40.1 million), the Group’s net loss from continuing operations widened to ZAR 26.8 million (September 2017: loss of ZAR 2.3 million).

South African production reduced to 55,950 carats (September 2017: 76,261 carats, including West Coast Resources’ production), mainly due to West Coast Resources (Pty) Ltd producing less carats and the closure of the LOR operations.

The cost of goods sold increased to ZAR 173.3 million (September 2017: ZAR 31.1 million), mainly as a result of West Coast Resources (Pty) Ltd becoming a subsidiary of the Group on 1 February 2018.  Gross loss amounted to ZAR 37.1 million (September 2017: gross profit of ZAR 9.0 million).

The company also reported the acquisition of an additional 27.2% interest in West Coast Resources (Pty) Ltd. It stated that the acquisition and sale in these properties impacted the comparability of the results over these two periods.

Further, Transhex reported that equity accounting profit from the Somiluana operations in South Africa amounted to ZAR 25.9 million (September 2017:  profit of ZAR 18.7 million), and that there was a net gain of ZAR 29.7 million, primarily due to the re-measurement of the West Coast Resources (Pty) Ltd rehabilitation provision.

It said that the Group’s net cash position at the end of the period was ZAR 42.9 million (September 2017: ZAR 41.3 million).

Going forward, Transhex said that it will continue to target high-priority areas that may identify additional resources for mining at the West Coast Resources property and that production for the 2019 financial year was expected to be about 140,000 carats, compared to 2018 financial year actual production of 173,920 carats.

It added that production from the Shallow water operations for the 2019 financial year is expected to be in the order of 10,000 carats, compared to 2018 financial year actual production of 9,012 carats.

While mining operations will continue at a few sites in Angola, production results and geological work through drilling and bulk sampling indicate that carat production for the 2019 financial year is expected to be in the order of 133,000 carats, compared to 2018 financial year actual production of 136,402 carats.