FOR all its strenuous efforts to diversify its operating base away from its traditional alluvial operations, it would seem Parow-based diamond miner Trans Hex is still reliant on the familiar waters of the Orange River to stay afloat.

Trans Hex’s interim results hardly provide the statistics and facts that would inspire confidence in the group’s efforts to diversify its operating base.

The Luana projects in Angola (in which the group holds a 33% share) had 26 450 carats available for sale at the end of the period.

That’s less than a third of the total carats sold by Trans Hex in the half-year to end September. The group’s other two projects in Angola - Fucauma and Luarica – were put on care and maintenance during the interim period.

Trans Hex’s ambitions in Liberia have also been snuffed out. Unfavourable exploration results meant the exploration project in Liberia was terminated and activities were wound down.

The Namibian operations – which revolve around marine diamond mining – have all but been shut down with just one vessel remaining. The Ivan Prinsep mining vessel – which once belonged to Ocean Diamond Mining (ODM) - was recently sold for R35 million, which is probably more than Trans Hex ever generated in profits from its marine mining activities.

CBN speculated in an earlier article that Trans Hex walked away from its marine diamond mining investments to concentrate more effort (and resources) on Angola.

To date the iffy returns from Angola certainly don’t justify the hundreds of millions of rands poured into the country. Trans Hex CEO Llewellyn Delport told mining website Miningmx that the Fucauma and Luarica operations needed a significant recovery in the price of rough diamonds to re-open them. A price of $200/carat was cited.

While it would be foolish to write off Trans Hex’s Angolan ambitions, there is at least some comfort to be taken from the core Orange River operations.

Trans Hex expects the South African land operations (which also includes a smaller operation in the Richtersveld) will produce around 100 000 carats for the full financial year.

What’s more, the grade at the flagship Baken mine is expected to improve as planned mining operations move into areas which are expected to produce higher grades.

This is good news for the SA operations, which in the interim period generated a strong R64 million in operational cash flow.

With the older alluvial operations capable of pumping steady cash flows one can only wonder how long Trans Hex will be willing to muck around in Angola – especially if the recovery in gem prices is slow.