South Africa-based diamond miner Trans Hex has been forced to liquidate its failing West Coast Resources (WCR) subsidiary after a potential sale of the business fell through.
Takeover negotiations with Kernel Resources have terminated, leaving Trans Hex unable to run the unit, the miner reported last week. As a result, “WCR is not in a position to meet its working capital requirements without the necessary funding being made available,” Trans Hex said.
WCR, which operates the Namaqualand mine, has struggled in the weak market, with rough prices declining 27% in recent months, and mining grades falling to unexpectedly low levels, Trans Hex explained.
Kernel began negotiations with Trans Hex in May with a view to buying 70% of Namaqualand, which is located close to the west coast of South Africa. Kernel also bought Trans Hex’s Lower Orange River operations in April 2018.
The liquidation is the latest in a string of difficulties for Trans Hex. Llewellyn Delport, the company’s CEO since 2004, stepped down in August following continued operating losses that also forced the miner to issue a warning about its ability to stay in business.
Image: The Namaqualand mine. (West Coast Resources)