What Namib Minerals (NAMM) Said on Its Q2 Earnings Call

Key Points

• First-half financial results improved substantially: Revenue rose 40% to $50.8 million, gross profit doubled to $27 million, and adjusted EBITDA increased 76% to $19 million, despite lower gold production and sales.
• 2026 production guidance was reduced to 26,500–27,000 ounces because the How Mine mill expansion will be fully operational only by year-end. The expansion is expected to lift processing capacity by about 36% and support annualized production above 30,000 ounces.
• Namib accelerated the Red Wing restart to January 2027 after completing dewatering ahead of schedule, while securing additional financing through expanded Ecobank and BancABC facilities. Management said no new equity issuance is planned and that it remains compliant with debt covenants.

Namib Minerals NASDAQ: NAMM reported higher first-half revenue, gross profit and adjusted EBITDA as stronger gold prices offset lower gold production at its How Mine operation. The company also reduced its 2026 production outlook because of the timing of a mill expansion, while accelerating plans to restart production at the Red Wing mine in January 2027.

Revenue for the six months ended June 30 rose 40% to $50.8 million from $36.4 million a year earlier, Chief Financial Officer Sphe Mchunu said. The company’s average net realized gold price, after royalties, increased 48% to $4,195 per ounce, compared with $2,827 per ounce in the prior-year period.

Gold sales declined 7% to 11,357 ounces, while production fell 11% to 11,373 ounces. Namib attributed the production decline primarily to lower grades at How Mine, where average grade was 1.7 grams per tonne, compared with 1.9 grams per tonne a year earlier. Tonnes milled were largely unchanged at 233,000, while recovery declined to 88% from 89%.

Profitability improves despite lower production

Gross profit doubled to $27 million, producing a 53% gross margin, compared with gross profit of $13.5 million and a 37% margin in the prior-year period. Adjusted EBITDA increased 76% to $19 million, with the adjusted EBITDA margin rising to 37% from 30%.

Production costs declined 3% to $17.9 million despite a 15% increase in power tariffs, Mchunu said. However, C1 cash costs increased 4% to $1,576 per ounce from $1,510 per ounce because a significant portion of the mine’s cost base is fixed and was spread across fewer ounces.

Group all-in sustaining costs were $3,078 per ounce, above the company’s previous guidance range. At How Mine alone, all-in sustaining costs were $2,534 per ounce, compared with $2,265 per ounce a year earlier. Mchunu said the group figure includes corporate overhead as well as care-and-maintenance expenses for Red Wing and Mazowe, allocated across How Mine’s production.

The company reported operating profit of $2.2 million, compared with an operating loss of $7.4 million in the prior-year period. Its loss for the period was $4.8 million, or $0.09 per share, after $11.3 million in non-cash fair-value losses related to its earn-out liability and warrant derivative liability.

Mchunu said those liabilities are affected primarily by movements in Namib’s share price and do not affect cash. The earn-out liability increased in value by $8.5 million during the period, while warrant revaluation resulted in a further $2.7 million loss.

How Mine expansion delays prompt lower guidance

Chairman and Chief Executive Officer Tulani Sikwila said How Mine remains Namib’s principal producing operation but has been constrained by existing milling capacity. The expansion is expected to increase processing capacity to approximately 55,000 tonnes per month from 40,500 tonnes, a gain of about 36%.

The mill installation is substantially complete and pre-commissioning checks are underway, Sikwila said. Namib expects to commission the expanded facility in mid-October, followed by a six-to-eight-week ramp-up period. The plant is expected to reach its full rate by the end of December.

Because the expanded facility will contribute for only part of the fourth quarter, Namib lowered full-year 2026 production guidance to between 26,500 and 27,000 ounces from its prior range of 28,000 to 31,500 ounces. The revised outlook assumes head grades of 1.7 to 1.9 grams per tonne.

Sikwila said the revised outlook reflects timing rather than a change in the mine’s underlying capacity. Once the expanded plant reaches full rates, How Mine can produce at an annualized rate of more than 30,000 ounces at current grades, he said. The company plans to issue formal 2027 guidance during the first quarter.

Namib maintained its 2026 C1 cash-cost guidance of $1,400 to $1,650 per ounce. It raised expected full-year group all-in sustaining costs to $2,650 to $2,850 per ounce from its earlier range of $2,400 to $2,700 per ounce. Management expects second-half costs to decline materially as volumes increase and restructuring savings take effect.

Red Wing restart moved forward

Namib completed dewatering at Red Wing on Sept. 21, ahead of its previously stated fourth-quarter target. The company now plans to begin production at the mine in January 2027 at an initial reduced capacity, a timetable brought forward in response to Zimbabwe’s newly announced mining policy framework for foreign-owned operators.

Sikwila said the policy requires operators to exceed prescribed production and capital-investment thresholds by Jan. 1, 2027. How Mine already meets those thresholds, while Red Wing and Mazowe, which are in care and maintenance, do not.

The three-month Red Wing restart program is scheduled to begin in October and includes a geotechnical audit of historical mining areas, refurbishment of the existing processing plant, re-equipping mining areas and workforce mobilization. Sikwila said mining will not resume until the geotechnical audit is completed.

The initial restart will use previously developed mining areas and existing infrastructure and will be funded from internally generated cash flow, according to the company. Namib said no new equity issuance is planned for the restart and that Red Wing is not expected to contribute materially to 2026 production.

The company said its technical feasibility study remains on track to conclude in early 2027, with resource-definition and definitive feasibility study work expected to conclude in the fourth quarter of 2027. Mchunu said an earlier aggregate development-capital estimate of roughly $300 million to $400 million for Red Wing and Mazowe remains subject to validation through the feasibility work and would not be deployed as a single upfront investment.

Liquidity and financing

Net cash from operating activities rose 61% to $9.3 million, while investing activities used $10.7 million, reflecting the How Mine expansion and work related to Red Wing. Namib ended the first half with GBP 1.8 million in cash and reported a GBP 42.9 million working-capital deficit.

Mchunu said the working-capital figure includes liabilities that do not represent near-term cash demands on How Mine, including a GBP 7.5 million current portion of the earn-out liability that settles in shares. He also said approximately GBP 15.9 million of obligations were held in the Red Wing and Mazowe entities and were ring-fenced from How Mine.

Since June 30, Namib fully drew a GBP 5 million Ecobank facility with a 36-month term to May 2029. The company also announced an agreement on Sept. 29 to increase its BancABC facility by $6.5 million to $13.2 million. Mchunu said Namib was in compliance with all debt covenants and that management’s projections through June 2027 indicate the group can continue generating positive cash flow and meet obligations as they fall due.

About Namib Minerals (NASDAQ:NAMM)

Namib Minerals Limited is a gold mining company focused on the acquisition, development and operation of gold assets in Zimbabwe. Its activities include mine development, mineral exploration, ore processing and gold production.

The company's portfolio includes the How Mine, Mazowe Mine and Shamva Mine, which are located in Zimbabwe's established gold-producing regions. Namib Minerals is focused on advancing and operating these assets while evaluating opportunities to expand its mineral resources and production base.

Namib Minerals is headquartered in Africa and serves the international gold market through its Zimbabwean mining operations.

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