VENTURES: W4U's Flaws More Apparent
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THE hype around West Coast diamond mining wannabe, Wealth 4 U Mining & Exploration – a self-proclaimed dazzling investment opportunity – is fast evaporating.
Production reports covering the period from the beginning of February last year to the end of July show W4U not producing gems on a viable scale from its shallow water boat based operations.
In the six month period W4U produced around 130 carats – mainly from shallow water operations. No production was achieved in boat based operations. The production report included the first two weeks of August, which showed another 40 carats mined mainly by shore based operations. The dismal production figures could prompt serious questions about the viability of W4U – unless production spikes markedly in the ensuing months.
Remember this is a company that estimated that almost R100 million was needed to be spent on capital equipment between 2006 and 2008. Certainly the production figures make the initial claims that W4U could increase its diamond production to 100 000 carats a year in the medium term look woefully unrealistic now.
The same goes for the suggestion that shareholders would be in line for a return of 20% per year. It would seem, like so many other small marine diamond ventures, that W4U has over-estimated its corporate prowess and operational production.
No wonder reports suggest Louis Liebenberg, the prime mover of W4U, is contemplating that rather drastic proposal to shift all operations from Port Nolloth to Namibia.
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