Trans Hex aims for Angola turnaround

[] — TRANS Hex has negotiated a mining contract for the Luana concession in Angola, but shareholders will have to wait until publication of the interim results for details on how the mine will be developed.

CEO Llewellyn Delport told Miningmx he could not provide further details on the size, cost, funding arrangements and development schedule for Luana until these had been agreed with the group’s partners.

Trans Hex has a 33% equity stake in Luana, which it has earned through on-site prospecting activities and completion of the approved feasibility study.

A trading statement released by Trans Hex in July 2009 said that at Luana “pre-feasibility drilling and bulk sampling programmes allowed the delineation of three million carats in indicated resources, and over 10 million carats in inferred resources’.

The feasibility study was accepted by the Angolan government in July, and negotiations then began with Trans Hex on the mining contract.

Delport indicated at that time those negotiations were going to be difficult and could take a long time to conclude.

This was because he intended reaching an agreement different to those struck by Trans Hex over the Luarica and Fucuama projects, concluded before he became CEO.

Those agreements – based on initiatives by former Trans Hex chairman Tokyo Sexwale – are confidential but clearly favoured Angolan government interests above those of Trans Hex, and Trans Hex paid a heavy price because of them.

The group’s initial hopes from the gung ho charge into the country in 2001, spearheaded by former CEO Calvyn Gardner, rapidly turned sour.

Gardner made an abrupt departure after a year, to be replaced by Delport who has been trying to rectify the situation ever since.

“We have been through the university in Angola,’ is how Delport put it in June last year.

Trans Hex took a R218m impairment charge against the Angolan operations in 2006, and a further R460m impairment charge in 2009. Both Luarica and Fucuama have been mothballed.

The Stock Exchange News Service (Sens) announcement released on Thursday made it clear that Trans Hex has management control of Luana, as the mining contract “allows for Trans Hex to appoint the general manager, financial manager and operations manager’.

At this stage in the closed period ahead of the release of Trans Hex interims early in June, Delport is only prepared to say: “We will continue with pilot production at Luana.

“We are very aware that our performance in Angola over the last few years has been average, if not bad.

“We now have an opportunity to change that and we would like to get into a situation where we can put the results on the table first.’