Executive Summary
Noventa is a Jersey registered holding company primarily involved in the mining of tantalum feedstock which is used in the manufacture of electronic capacitors, turbine blades and cutting tools. Noventa's strategy is to be the world's largest, low cost industrial scale supplier of tantalum. Its subsidiary - Highland African Mining Company Limitada - holds title to several mining and exploration licences in Mozambique. The Marrapino mine is the most advanced mine under its licenses, which was previously productive but unprofitable. It has been under care and maintenance in 2009 due to operating difficulties. A new board was recently put in place (July 2009) with a mandate to turnaround the company. [1]
Background
Noventa commenced as a business in 2001 and was admitted to trading on the AIM market on 27th March 2007. [2] It floated with a market capitalisation of £60m at a price of 175p. The early management were unable to run the operation profitably. Revenues were approximately 60% below plan, and costs 50% above, resulting in a cash consumption rate of about $1m per month.
Operating difficulties at Marrapino included:
- Unforeseen outages in the wet processing plant
- Variability in the quality of the ore
- Poor efficiencies within the wet processing plant
- Delays in delivery of grid power to marrapino.
- Cost of diesel and power outages due to the use of back up diesel generators
- High levels of Staff Turnover
On 31st May 2009, the company’s main mining operation was placed on care and maintenance. [3] Cash consumption continues at approximately $350,000 per month. On 9th July 2009, the shareholders moved to replace the board and appointed new directors with a mandate to turnaround the company.
Products
Noventa produces Tantalum Pentoxide (Ta2O5). [4] It is primarily consumed in the electronics industry and has been the focus of media reports regarding guerrilla and militia warfare in Africa. Generally these reports have focused around tantalum sourced from Coltan ( a Ta/Nb concentrate ) which is now viewed as an unethical source of supply. Coltan sourced Tantalum is priced at a steep discount to Ta2O5 and displaces ethically sourced feedstock from suppliers such as Noventa.
Assets & Operations
Noventa's mining assets are all located in the Zambezia Province of North Eastern Mozambique. They include the Marropino mine (currently in the final stage ramp-up to full production),…
