Navachab throws town a lifeline

A mostly employee driven turnaround strategy improved the chance of survival for a gold mine.

09 June 2019 | Business

George Botshiwe; Navachab MD; “capital investments by the shareholder amounting to N$700 million did not totally offset the increasing costs of production.”

Karibib



Navachab Gold Mine has through various interventionist financial strategies managed to improve its financial position from a negative cash flow of N$20 million towards the end of 2018 to a positive financial result of nearly N$130 million (pretax and unaudited) as at the end of May 2019.

This was revealed at the Karibib Travel and Tourism Fair recently by the managing director (MD), George Botshiwe, in an update on the status of the mine.

The mine is regarded as an important player in the socio-economic environment of Karibib and the region with more 400 mine employees staying in the town with their families.

Discussions with the town council have been initiated to identify and agree on areas of co-operation to support socio-economic growth of Karibib and the greater Erongo region. The Karibib community garden project was launched to this effect recently.

Botshiwe said the mine faced a crisis of such magnitude that it threatened its very survival last year.

He explained that the mine was N$20 million in debt with no prospect of additional funding to sustain its operations between October and November 2018.

“We could have dropped everything, embarked on and instituted retrenchment processes and given up, but refused to do so. I can proudly say that we have enough financial resources which can be invested into the mine to continue operating sustainably into the foreseeable future, with the equipment and resources currently at our disposal.”

According to Botshiwe the previous owners of the mine practised selective mining of high grade ore with very negligible investment into equipment and operations needed to ensure sustainability.

“Navachab Gold Mine is essentially a low grade mine and highly sensitive to operating costs, inflation and fluctuations in macroeconomic conditions such as the gold price and exchange rates. In addition, the costs of production crept up over the years while ore grades decreased at the same time.”

Interventions instituted by the mine’s management in the immediate period after the purchase of the mine by QKR Namibia unfortunately did not produce sufficient cash flow and cost reduction.

“Continued capital investments by the shareholder amounting to N$700 million did not totally offset the increasing costs of production. This could not be allowed to continue as it threatened the sustainability and profitability of the operation as well as the very livelihoods of the more than 400 employees. The mine management therefore embarked on an interventionist turnaround strategy to reduce operating costs, improve productivity and enhance revenue.”

Once completed the envisioned strategy would enable the mine to access funding required to expand operations, ensure a sustainable and profitable operation, minimising the effects on its staff, the communities in which it operates and the economy of the country.

Aptly named Project Khaima (meaning rise up in Damara), the turnaround strategy was launched in August 2018 with full employee participation.

The process was mostly employee driven and yielded significant results in a reasonably short period of time from its establishment in August last year till now.

Staff-generated ideas were fed through a project pipeline, tested and implemented to yield real measurable results.

Project Khaima also targeted an increase in productivity through efficient use of both human resource and equipment.

“We made some tough decisions including amongst other renegotiating and in some cases termination of various third-party service provision contracts, including that of mining contractors. We can now for example make use of our own more cost effective resources (both financial and human resources) to carry out waste stripping operations.”

During the course of eight months the mine achieved significant milestones in its operations including the review of its mining strategy as well as achieving a more streamlined staff structure through the offering of Voluntary Separation packages to employees.

“In order to achieve full operational excellence and sustainability management embarked on a process of financial modelling. We also initiated a process of engaging potential funders for the expansion Investment Plan of the mine which is a bankable proposition.”

The mine also plans to re-introduce waste stripping activities on the Western Pushback in order to reach identified higher grade ore deposits by using the financial resources it has accumulated and saved over the last few months and the equipment at its disposal.

Similar News

 

New mine owner officially takes control

3 weeks ago - 28 July 2019 | Business

Arandis - Otis Finck China National Uranium Corporation (CNUC) became the new majority shareholder in Rössing Uranium, following the acquisition of Rio Tinto’s...

Tasty cuisine at The Jewel

3 weeks ago - 28 July 2019 | Business

The gourmet restaurant The Jewel is located at Erongo Mountain Winery, offering guests the unique opportunity to indulge in excellent cuisine paired with exceptional wines...

Expanding beyond the Horizons

1 month - 21 July 2019 | Business

Walvis Bay - Leandrea Louw Horizon Signs and Designs based in Walvis Bay will be opening a brand new shop with a variety of...

Top coastal real estate agents acknowledged

1 month - 14 July 2019 | Business

Tienie Mouton; FNB; “The deep recession experienced over the past two years, has put severe strain on the sector.”Swakopmund FNB Namibia recently awarded outstanding performing...

EBH Namibia completes rig repair process

1 month - 30 June 2019 | Business

Walvis Bay Elgin Brown & Hamer (EBH) Namibia announced the successful conclusion of a major repair project agreement with Sapura Energy....

Coffee at its best

2 months ago - 10 June 2019 | Business

A.M Brew Coffee World owner Stephanie Brayshaw loves to talk about coffee, and looks forward to receiving visitors at her establishment. The answer...

Swakop Sport celebrates 10 years

3 months ago - 13 May 2019 | Business

Specializing in sports gear, Swakop Sport is a family owned business, which is located at Shoprite Centre in Swakopmund. The store carries an extensive range...

For all your real estate needs

4 months ago - 15 April 2019 | Business

AdvertorialImperial Properties, located in Nangolo Mbumba Street, Walvis Bay (next to Suidwes Total), serves the coastal towns of Walvis Bay and Swakopmund and facilitates...

Coffee shop with a difference

4 months ago - 08 April 2019 | Business

If you’re looking for a place to relax and recover from your every day burdens, pop in at Cornerstone Christian Bookshop and Cake Décor shop...

Spot-On, the go-to caterer in town

4 months ago - 01 April 2019 | Business

Spot-On Catering celebrates its 20th anniversary in July. The business was established in 1999 as an addition to the existing Spot-On Shopping Centre that has...

Latest News

Raak liries oor 'Suidwes'

5 days ago - 19 August 2019 | Supplements

Die vyftiental Suid-Afrikaanse ­musikante wat die verhoog gaan deel by hierdie jaar se Hentiesfees, sluit onder andere die sangeres Jezelle, bekend vir haar liedjie “Suidwes”,...

Henties Bay is where /Honeb's...

5 days ago - 19 August 2019 | Supplements

There is much more to Henties Bay than it simply being known as fishing haven, holiday resort and a retirement village, says the mayor of...

Feesprogram

5 days ago - 19 August 2019 | Supplements

Vrydag 23 Augustus 2019 09:00 Hekke open ...

TOURIST ATTRACTION

5 days ago - 19 August 2019 | Supplements

Many fishing trawlers have sunk off the Henties Bay coast, but very few wrecks are still ­visible today because of the onslaught of the elements....

'Jive' saam met Jo

5 days ago - 19 August 2019 | Supplements

Jo Nichol (38) is 'n man van vele talente. Hy tree nie net as musikant en seremoniemeester by vanjaar se Hentiesfees op nie, maar sorg...

Lus vir iets Anders?

5 days ago - 19 August 2019 | Supplements

Wynand en Lindi Delport het aan die einde van 2007 in die huwelik getree en die jaar daarna saam begin musiek maak as die duo...

Vaughn vier saam Hentiesfees

5 days ago - 19 August 2019 | Supplements

Die Namibiese sanger, kitaarspeler en liedjieskrywer Vaughn Ahrens is geen vreemdeling by die Hentiesfees nie. Vanjaar sluit twee nuwe gesigte by hom op die verhoog...

DIE GALG WAG

5 days ago - 19 August 2019 | Supplements

Besoekers aan vanjaar se Hentiesfees wat nog nie 'n draai by Die Galg gemaak het nie, kan gerus gaan kyk. Die Galg is berug oor...

Mini-reünie op Hentiesbaai

5 days ago - 19 August 2019 | Supplements

Caroline Grace sal by vanjaar se Hentiesfees weer eens die verhoog met Fatman deel - nes hulle gemaak het in die finale ronde van The...

Load More