NOVENTA LIMITED
(“Noventa” or the “Company”)
[AIM: NVTA]
MOVE TO CARE AND MAINTENANCE
Shareholders are advised that the Company has commenced negotiations with all
stakeholders with a view to placing the Marropino mine on Care & Maintenance
to preserve cash resources. Discussions with potential strategic partners will
continue, with a view to production recommencing on the introduction of the
necessary funding to allow construction of the hard rock circuit at Marropino.
Operations at Marropino have been impacted by a number of factors directly
linked to the global financial and economic crisis including:
•
The Company’s morganite joint venture partners have experienced a
marked decrease in demand and have not been able to honour their
commitments;
•
The banks providing the pre shipment finance facility gave notice in April
that the facility is no longer available. This is despite Noventa complying
with all covenants;
•
The broad based decrease in the provision of credit by the banking sector
has resulted in an inability to replace the pre shipment facility or to secure
short term loans on acceptable terms, despite the Company’s balance sheet
being ungeared;
•
The decrease in global trade has reduced the frequency with which ships
allowed to carry tantalum concentrate call at the port of Walvis Bay. This
together with the withdrawal of the pre shipment facility has placed
excessive strain on the working capital funding requirements;
•
A significant decrease in demand for capacitor grade powder has meant
that our customer is not in a position to improve the payment terms on
which they purchase concentrate, to compensate for the above.
Further pressure has been placed on the finances due to delays in the delivery of
grid power and in the reimbursement of value added tax. In the intervening
period it has been necessary to produce power using aging diesel generators.
It is very disappointing that the above factors have resulted in the Company
needing to take this course of action, especially at a time when the plant has been
performing ahead of expectations with average availability exceeding 80% for the
past three months.
Whilst the Board believes there is a realistic prospect of obtaining the necessary
financial support within an acceptable timeframe, and the company will be
pursuing the present search for investment capital without deviation from that
purpose, the Board considers it prudent under prevailing economic circumstances
for the Company to take this significant step while sufficient funding remains in
place for Care & Maintenance to be undertaken. Plant, equipment and all other
company assets at Marropino will be secured and subject to appropriate Care &
Maintenance procedures in order to facilitate as efficient a re
β
start of operations as
possible, once confidence has returned to the market in general
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and specifically
for Tantalum and Morganite. Implications for the Company
ΚΉ
s employees are
considerable, and this whole matter will be handled with the utmost diligence.
The annual financial statements for 2008 are due to be published at the end of
June. All stakeholders will be kept informed with respect to any progress on these
issues.
24 April 2009
For further information please contact:
Clinton Wood
Noventa Limited
+27 (0) 82 880 3392 / +27 (0) 11 823 1400
www.noventa.net
Gerard Kisbey
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Green
