F-1: Namib Minerals Reports H1 2025 Loss Amid Production Decline

Namib Minerals experienced a significant decline in gold production and profitability in the first half of 2025, reporting a net loss of $11.9 million, despite higher gold prices.

Summary

• Namib Minerals, an established gold producer in Zimbabwe, reported a net loss of $11.9 million for the six months ended June 30, 2025, a significant decline from a $9.2 million profit in the same period of 2024.
• Gold sales decreased by 35% to 12.2 thousand ounces in H1 2025, down from 19.7 thousand ounces in H1 2024.
• Revenue fell by 13% to $36.4 million in H1 2025, compared to $41.9 million in H1 2024, primarily due to a reduction in gold grade from 2.8 g/t Au to 1.9 g/t Au at the How Mine.
• The average net realized gold price increased by 40% to $2,827 per ounce in H1 2025, partially offsetting the revenue decline.
• C1 cost per ounce rose to $1,659 in H1 2025 from $1,073 in H1 2024, while All-in Sustaining Costs (AISC) per ounce increased to $2,462 from $1,666.
• The company incurred $65.4 million in non-cash listing expenses and $10.2 million in non-recurring transaction costs related to the Business Combination, contributing to the H1 2025 loss.
• Namib Minerals holds 88 thousand ounces of gold reserves, 1.6 million ounces of measured and indicated gold resources, and 2.4 million ounces of inferred gold resources as of December 31, 2023.
• The Mazowe Mine and Redwing Mine, currently under care and maintenance, require an estimated $300 million in capital expenditures over three years to restart operations, targeting first gold pour in H1 2026.
• A $3.5 million Promissory Note was issued to Cohen & Company Securities, LLC on September 30, 2025, for investment banking services, with payments potentially made in Ordinary Shares.
• Up to 30 million Earnout Shares may be issued to former Greenstone shareholders over eight years, contingent on achieving specific operational and valuation milestones for the Mazowe, Redwing, and DRC projects.
• The company has identified material weaknesses in its internal control over financial reporting, including a lack of formal processes for complex accounting matters and financial close procedures.

Sentiment

Score: 3

Explanation: The company reported a significant decline in H1 2025 operational performance and profitability, with increased costs per ounce and a substantial net loss. While there's long-term potential from non-operational mines and DRC exploration, these require significant capital and face considerable risks and uncertainties, including ongoing legal challenges and material weaknesses in internal controls. The current financial health and operational setbacks outweigh the future growth prospects in the short term.

Positives

• The average net realized gold price increased significantly by 40% to $2,827 per ounce in H1 2025, compared to $2,023 per ounce in H1 2024.
• The How Mine, the company's only currently operational mine, has a strong track record, producing approximately 1.83 million ounces of gold from 1941 through June 30, 2025, and operates with one of the lowest production cost profiles among peers.
• The company has a substantial resource base, including 88 thousand ounces of gold reserves and 1.6 million ounces of measured and indicated gold resources as of December 31, 2023.
• Preparatory work is underway to restart operations at the historically producing Mazowe Mine and Redwing Mine, which have significant mineral resources.
• Significant development potential exists in the Democratic Republic of Congo (DRC) with 13 exploration permits showing copper and cobalt potential, including six initial drilling holes with identified mineralization.
• Zimbabwe's legislative environment is supportive of mining, with the removal of the indigenization rule and the Responsible Mining Initiative to combat illegal mining.
• The company maintains a strong commitment to ESG, with the How Mine operating under ISO standards (14001, 9001, and 45001) for environmental responsibility, quality, and occupational health and safety.
• Management has assessed the Group's ability to continue as a going concern, with How Mine's positive cash flows expected to meet liquidity requirements and support care and maintenance costs for other mines.
• The company's exposure to foreign currency exchange movement is minimized as greater than 90% of transactions are denominated in USD.

Negatives

• Namib Minerals reported a net loss of $11.9 million for the six months ended June 30, 2025, a substantial decrease from a $9.2 million profit in the prior year period.
• Gold sales volume decreased by 35% in H1 2025 compared to H1 2024, from 19.7 thousand ounces to 12.2 thousand ounces.
• Revenue declined by 13% in H1 2025 to $36.4 million, primarily due to a 32% reduction in gold grade at the How Mine.
• Production costs per ounce (C1 cost) increased by 54% to $1,659 in H1 2025, and All-in Sustaining Costs (AISC) per ounce increased by 48% to $2,462.
• The company's current liabilities exceeded current assets by $83.4 million as of June 30, 2025, and total liabilities exceeded total assets by $153.1 million, indicating a significant working capital deficit.
• A $65.4 million non-cash listing expense and $10.2 million in non-recurring transaction costs related to the Business Combination significantly impacted H1 2025 profitability.
• Two of the company's three mines (Mazowe and Redwing) are under care and maintenance and require substantial capital ($300 million estimated) to restart, with no guarantee of successful recommencement or profitability.
• The company has identified material weaknesses in its internal control over financial reporting, which could affect financial reporting reliability and fraud prevention.
• The SelliBen Trust owns 63.7% of outstanding Ordinary Shares, creating a controlled company structure where their interests may conflict with other shareholders.
• The company does not intend to pay cash dividends for the foreseeable future, limiting shareholder returns to share price appreciation.
• The company is exposed to political, economic, and social uncertainties in Zimbabwe and the DRC, including hyperinflation, fluctuating exchange rates, and potential government policy changes.
• Litigation regarding disputed debts and corporate rescue proceedings for the Mazowe Mine are ongoing, posing risks to restart plans and asset interests.

Risks

• Development of existing and new mining projects may face unexpected problems, costs, and delays, including supply constraints, increased operating costs, and reduced utility availability.
• Significant additional capital is required to fund business development, particularly for restarting the Mazowe Mine and Redwing Mine, and there is no assurance such capital will be available on acceptable terms or at all.
• Mineral Resource and Mineral Reserve estimates are inherently uncertain and may differ materially from actual recovered quantities, potentially rendering resources uneconomic.
• Mining operations are inherently hazardous, with risks of accidents, environmental damage, social disputes, illegal mining activities, and infrastructure failures (e.g., flooding, power outages).
• Political, economic, and social uncertainties in Zimbabwe and the DRC, including war, civil unrest, expropriation, and arbitrary changes to laws and regulations, could adversely affect operations.
• Fluctuating foreign currency and exchange rates, particularly the hyperinflation of Zimbabwe's local currency (ZiG), may negatively impact business, results of operations, and financial position.
• The price of gold is subject to significant volatility due to speculative positions, central bank policies, demand changes, and global economic/political events, which can materially affect profitability.
• Operations are vulnerable to infrastructure constraints, including unreliable power and water supply, and supply chain disruptions for strategic spares and critical consumables.
• All gold revenues are derived from sales to Fidelity, a company controlled by Zimbabwean authorities, concentrating credit risk and potentially leading to financial loss if Fidelity defaults.
• Loss of mining leases in Zimbabwe (How, Mazowe, Redwing) due to non-compliance, government acquisition, or failure to operate could have a material adverse effect.
• Ongoing litigation regarding disputed debts and corporate rescue proceedings for Mazowe and Redwing Mines could materially adversely affect restart plans and asset interests.
• Potential claims related to Greenstone's purchase of the mines from Metallon Corporation Limited, including the possibility of rescinding the sale or Greenstone being liable for the purchase price, could materially affect assets and operations.
• Cybersecurity breaches and disruptions to information technology systems could compromise sensitive information, damage reputation, and expose the company to liability.
• Failure to obtain or maintain government approvals, permits, and licenses, or non-compliance with environmental and anti-corruption laws (e.g., FCPA), could lead to penalties, operational suspensions, or increased costs.
• The company may be subject to Zimbabwean capital gains tax on direct and indirect transfers of mining title, including past transactions, with unclear implications.
• Future sales or issuances of Ordinary Shares, including those from the Promissory Note, Earnout Shares, and Warrant exercises, could result in substantial dilution and a decline in share price.
• Increased costs and management time will be devoted to operating as a public company, and management has limited experience with Nasdaq-listed company compliance.
• Material weaknesses in internal control over financial reporting, if not remediated, could affect financial reporting accuracy and investor confidence.
• As a foreign private issuer incorporated in the Cayman Islands, shareholders may have limited ability to protect their rights through U.S. courts or access the same level of information as U.S. domestic companies.
• The company may be characterized as a Passive Foreign Investment Company (PFIC) for U.S. federal income tax purposes, leading to adverse tax consequences for U.S. shareholders.

Future Outlook

The company anticipates improving financial performance in fiscal year 2026, assuming successful completion of development and exploration projects, restart of Redwing and Mazowe Mines, and consistent or increasing gold prices. It expects substantial increases in its total resource base over the next 18 to 24 months through conversion, optimization, and targeted exploration. The company plans to focus on mine development, production rate increases, productivity improvements, fixed cost management, and new energy sources at the How Mine. Exploration work is underway in the DRC for copper and cobalt, with a target of developing assets to full-scale operations over the next four to five years, contingent on financing and successful permit conversions.

Management Comments

• Our mission is to become a leading Pan-African multi-asset mining platform for precious and critical metals, particularly gold, and to create safe, sustainable, and profitable mining operations for our employees, our communities, and our shareholders.
• Our How Mine is an established, high-grade, underground gold mine with a strong track record of operations having produced an aggregate of approximately 1.83Moz of gold from 1941 through June 30, 2025.
• The How Mine also has a history of consistently operating within budget with one of the lowest production cost profiles amongst its publicly reporting peers.
• Our other principal assets, the Mazowe Mine and the Redwing Mine, are historically producing gold mines with significant mineral resources. These assets provide us with an identified pathway to operate as a multi-asset gold producer in Africa, as preparatory work is currently underway to restart operations at both mines.
• We also have significant development potential in the Democratic Republic of Congo (DRC) to unlock critical battery metals in the region.
• Management anticipates that the Group will continue to be able to meet its liquidity requirements based on the Group's cash flows projections indicating the same for the next two years, with working capital improvements expected from increased gold production at the How Mine and rising gold prices.
• Management has conducted sensitivity analyses on potential gold price fluctuations and confirmed that the Group can adjust payments to accommodate any drop in the gold price, while maintaining positive cash flows.

Industry Context

The gold industry is characterized by strong upward price trends, with gold acting as a strategic financial investment and safe haven during economic turmoil. Demand is bolstered by central bank purchases, jewelry, electronics, and technology (including AI). Mined gold output has not kept pace with demand. Zimbabwe is a prolific gold producer, with mining accounting for 80% of its exports. Government policies in Zimbabwe are increasingly supportive of mining, including the removal of indigenization rules and the Responsible Mining Initiative. The copper and cobalt industries are experiencing significant growth driven by the clean energy transition, electric vehicles, and renewable energy infrastructure, with demand projected to increase substantially. Cobalt reserves are concentrated in regions like the DRC, often as a byproduct, adding complexity to resource access.

Comparison to Industry Standards

• The How Mine operates with one of the lowest production cost profiles among its publicly reporting peers, indicating strong operational efficiency.
• The Mazowe Mine boasts one of the highest ore grades among publicly reporting peers at 7.77g/t Au for total measured and indicated gold resources, and 8.65g/t Au for inferred gold resources.
• The company's Lost Time Injury Frequency Rate was 1.51 for 2024 and 0.69 for H1 2025, which is below its target of 1.00, suggesting strong safety performance relative to internal benchmarks.
• The company's SHEQ systems and ISO standards (14001, 9001, and 45001) compliance at the How Mine align with international best practices for environmental responsibility, quality, and occupational health and safety.
• The mining industry is highly competitive, and the company competes with other interests, many of which have greater financial resources, better access to potential resources, more developed infrastructure, and more available capital, such as Caledonia Mining Corporation Plc in Zimbabwe and Ivahoe Mines and Zijin Mining Group in the DRC.

Management Changes

Corporate Governance

Legal Proceedings

• On February 15, 2024, an application was filed in the High Court of Zimbabwe to place the Mazowe Mining Company under corporate rescue proceedings. The company is challenging this application, viewing it as without merit, but a new hearing date has not been set.
• Certain employees of the Mazowe Mining Company and Redwing Mining Company claimed approximately $2.7 million in unpaid wages when the mines entered care and maintenance. Mazowe Mining Company is making installment payments and Redwing Mining Company has entered into compromise agreements with some employees, with ongoing discussions for others.

Related Party Transactions

• The Southern SelliBen Trust, a former Greenstone shareholder and now a Namib shareholder, holds approximately 63.7% of Namib's issued and outstanding Ordinary Shares as of July 29, 2025.
• Tulani Sikwila, CFO and Director, is one of four directors of Three Rivers PTC Limited, the trustee of the SelliBen Trust.
• Ibrahima Tall, Tulani Sikwila, and Siphesihle Mchunu are directors of Standard Telecom Congo, an indirect majority-owned subsidiary of the SelliBen Trust.
• The Business Combination Agreement obligates the company to issue up to 30 million Earnout Shares to Former Greenstone Shareholders (including the SelliBen Trust, entities controlled by executive officers, and Mzilikazi Godfrey Khumalo) upon achieving specific milestones.
• The Registration Rights and Lock-up Agreement imposes 12-month transfer restrictions on 44,999,296 Ordinary Shares held by certain shareholders, including the SelliBen Trust and entities controlled by executive officers, with exceptions for Mzilikazi Godfrey Khumalo and others.
• Greenstone acquired 100% of BMC (which owns the mines) from Metallon Corporation Limited (under insolvency) for approximately £53.2 million, with the purchase price payable by Mzilikazi Godfrey Khumalo and the SelliBen Trust (the Guarantors).
• The Guarantors have agreed to indemnify Greenstone, Metallon, and its administrators for six years against claims related to the BMC Sale, with certain Ordinary Shares held by the SelliBen Trust as security for these obligations.
• The company recorded a receivable of approximately $0.3 million from Metallon Corporation Limited (US) as of June 30, 2025, for general administrative expenses incurred on behalf of Metallon entities.
• The company recorded a liability of approximately $3.4 million as of December 31, 2024, related to general administrative expenses paid by Metallon entities on behalf of Greenstone, which was offset by an agreement with Metallon.
• BMC issued short-term notes to various lenders secured by assets pledged by Metallon Gold Zimbabwe, an affiliate of Metallon, with $4,000 outstanding as of June 30, 2025.
• BMC agreed for $4.8 million (2023) and $2.2 million (2022) of proceeds from an asset sale (Motapa) to be paid directly to Metallon to assist with its working capital needs, leading to credit loss recognition by BMC.

Stakeholder Impact

• Shareholders face significant dilution risk from the issuance of up to 1,750,000 Ordinary Shares under the Promissory Note, up to 30 million Earnout Shares, and the exercise of 18,576,712 Warrants.
• Shareholders are unlikely to receive cash dividends in the foreseeable future, with returns dependent on share price appreciation.
• Employees are impacted by ongoing wage claims at the Mazowe and Redwing Mines, and the majority of employees are members of labor unions, posing risks of work stoppages.
• Customers (primarily Fidelity) are critical as the sole buyer of gold, concentrating credit risk for the company.
• Creditors and suppliers face liquidity risk due to the company's current liabilities exceeding current assets by $83.4 million as of June 30, 2025, and potential delays in payments.
• Local communities are impacted by the company's ESG initiatives, including healthcare, education, and emergency response, but also by potential environmental disturbances and illegal mining activities.
• Regulatory bodies (SEC, Nasdaq, Zimbabwean government) are key stakeholders due to compliance requirements, listing standards, and mining regulations.

Next Steps

• Complete formal feasibility studies for the Mazowe Mine and Redwing Mine during fiscal year 2025.
• Complete scoping and prefeasibility studies for Mazowe Mine and Redwing Mine within 9 to 15 months, at a cost of approximately $2.5 million for each.
• Commence surface exploration at Mazowe Mine in 2025.
• Dewater the flooded working areas of Mazowe Mine (approximately 12 months, $1.5 million cost) and Redwing Mine (approximately 15 months, $1.0 million cost), expected to be completed by early 2026.
• Target a first gold pour at the Mazowe Mine and Redwing Mine in the first half of 2026, assuming successful dewatering, mine design, facility upgrades, and financing.
• Implement a shaft sinking development project and milling plant expansion at the How Mine, with operation anticipated to commence in Q3 2026.
• Undertake deep drilling from the 30 Level drilling platforms to a depth at the 40 Level at the How Mine by the end of 2024, at a cost of approximately $2.4 million.
• Land two underground drilling rigs and one surface drilling rig at the How Mine by the end of 2025.
• Undertake further exploration drilling at the How Mine from 2025 through 2029, at a cost of approximately $12.9 million per year.
• Pursue Special Mining Leases (SMLs) for Mazowe Mine and Redwing Mine to reduce risk exposure to local currency dynamics.
• Complete the valuation process, including exploration and feasibility studies, for DRC exploration permits, with a target of developing assets to full-scale operations over the next four to five years.
• The counterparties holding DRC exploration permits are beginning the process of converting certain permits into exploitation permits (extending term from 5 to 25 years).
• Implement detailed and documented policies and procedures across all business units and hire additional qualified accounting and reporting personnel to remediate material weaknesses in internal control over financial reporting.
• Establish an internal audit function and additional control testing and monitoring procedures.
• Formalize and standardize financial reporting control procedures and policy manuals to improve the quality and accuracy of period-end financial closing processes.
• Appoint one additional independent director within one year of the Closing Date to ensure a majority of the Company Board is independent.

Key Dates

Keywords

Gold Mining, Zimbabwe, DRC, Copper, Cobalt, SEC Filing, F-1 Registration, Mineral Resources, Mining Operations, Exploration, Capital Expenditures, Promissory Note, Earnout Shares, Warrants, Nasdaq Listing, Financial Performance, Risk Management, Corporate Governance, Emerging Markets, Foreign Private Issuer, Internal Controls, Dilution, Commodity Prices