Freda boosts Mwana revenue

HARARE - Aim-listed resources group Mwana Africa plc (Mwana) registered a 61 percent surge in revenue to $60,7 million in the half year to September 2012‚ largely driven by a solid performance by its Zimbabwean gold producer Freda Rebecca (Freda).

During the period under review, Freda realised $59,7 million from the sale of 36 335 ounces of gold, contributing $32 3 million to the group’s profit.

With its current annualised rate of gold production standing at 72 000 ounces, Freda ranks as the largest gold mine in the country, in terms of output.

Mwana registered a $10,1 million profit in the half year — its first since 2007.

The group incurred a $0,7 million loss in prior comparable period.

Profit attributable to shareholders increased to $8,2 million up from a loss of $1,5 million.

Oliver Baring, Mwana chairperson, said the company achieved some major milestones during the period under review, particularly the return to profitability.

“Production at Freda continues to progress and positive drilling results from Zani Kodo, and Trojan Nickel Mine give us confidence that we can increase significantly our resource base,” Baring said.

He said that the restart of Bindura Nickel Corporation (BNC)’s Trojan Nickel Mine (Trojan) — its Zimbabwean nickel producer — bodes well with the future.

Trojan, placed under care and maintenance in 2008, recently announced intentions to restart operations following a successful recapitalisation and restructuring exercise.

The group generated a $33,1 million gross profit during the period up from $17,2 million in the previous year, with $0,8 million coming from BNC which continued to dispose of inventory items.

Operating costs went up to $49,6 million from the previous year due to increased activity at Freda which involved the introduction of a second milling circuit.

Freda’s costs stood at $34,9 million.
In April, Mwana raised $32,8 million in a share issue, enabling it to invest $21 million into BNC through a rights issue.

“The restructuring and recapitalisation of BNC was successfully concluded in September and work is now focussed on restarting the

Trojan mine with the sale of first nickel concentrate expected in the second quarter of 2013,” he said.

“Further funding will be required by BNC to take the company through to being cashflow positive.”

Mwana reported that the resource drilling programme at Trojan had yielded a number of significant intersections of high grade nickel mineralisation.

“While the immediate focus is on the Trojan restart, the longer term intention remains bringing Hunters Road into production and restarting the Bindura Smelter and Refinery,” added Barring. - Business Writer

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