JSE-listed diamond mining company Trans Hex said on Wednesday it wanted to sell its loss-making Lower Orange River operation for a total cash consideration of R72m.
Trans Hex made the announcement after the JSE closed on Wednesday, but its share price had jumped 52.17% to R1.75 during earlier trade on the day.
Trans Hex has recommended that shareholders approve the disposal of its Trans Hex Operations subsidiary, comprising the Baken and Bloeddrif mines in the Richtersveld region of the Northern Cape.
Baken, which incurred a loss of R137.5m in the half-year to end-September, was shuttered in October 2017, while Bloeddrif was closed in May 2017 after a loss of R60.1m in the same period.
Subject to various conditions and shareholder approval, the deal would take effect from April 1, with a R50m immediate payment, followed by deferred payments of R2.75m a month over an eight-month period — a further total of R22m.
The subsidiary would be acquired by Lower Orange River (LOR) Operations, a wholly black woman owned company.
In its results to end-September Trans Hex had attributed a 16.2% decline in diamond production to Bloeddrif’s closure and Baken’s underperformance, further reporting R111.4m in retrenchments costs.
The group reported an after-tax loss of R200m in the period to end-September, and a headline loss per share of 188.4c, compared to headline earnings per share of 31.4c in the prior comparative period.
Trans Hex had issued a cautionary announcement outlining the proposed sale at the end of March.
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