A glimmer of hope for the group Trans Hex?


Source: https://www.cbn.co.za/featured/trans-hex-gem-in-liquidation/

PAROW-based diamond mining group Trans Hex appeared dead and buried in 2019 after its subsidiary West Coast Resources (the former Namqualand mines purchased from De Beers) went into liquidation. But indications are that a new Trans Hex look is regaining some sparkle.

The diamond miner was struck off the JSE two years ago, meaning there is no official overview of operations. But Astoria, which owns 35% of the capital of Trans Hex, recently published interesting comments in its semi-annual report at the end of June.

Astoria noted that Trans Hex benefited from the restructuring implemented after its delisting, which led to a dramatic reduction in costs. Additionally, as the diamond trade normalized after the foreclosure restrictions were lifted, diamond prices have also “risen dramatically”.

Astoria said the Somiluana mine in Angola achieved good selling prices during this period. “Rising oil prices further eased the dollar shortage in Angola, which made it easier for Trans Hex to repatriate funds to South Africa.”

Astoria said Trans Hex is now generating healthy cash flow – albeit lumpy due to the friction of sending foreign currency out of Angola. In the past six months, Astoria has received its first dividend of Rand 3.5 million from this investment.

Interestingly, Astoria values ​​its 35.7% stake in Trans Hex at a 30% discount to the group’s net asset value, which equates to Rand 53 million. This 53 million rand figure infers a value of around 150 million rand for Trans Hex, which is actually less than the 225 million rand the group and other partners paid for West Coast Resources.

With Trans Hex seemingly on a more solid financial footing, it will be interesting to see if there is enthusiasm to acquire more diamond mining operations to ensure operational diversity and expand scale.


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