Mwana raises additional $2,8m

HARARE - Mwana Africa plc (Mwana) has raised an additional $2,8 million working capital to refurbish its mining assets.

The pan-African resources company — which early this month raised brought in around $3,2 million  through a share subscription — appears to be slowly putting together the financial building blocks for growth.

For the second time in as many months the group once again received backing from China International Mining Group Corporation and its chairperson Ning Yat Hoi, which hold 22 percent and 7,8 percent respectively of Mwana after subscribing for stock.

Mark Wellesley-Wood, the newly-appointed Mwana chairperson said he was delighted with the support shown for Mwana’s strategy.

“With the working capital shortfall addressed, the focus can now shift to improving the efficiency and cost competitiveness of the company’s operations,” he said.

The group’s main subsidiary is the Bindura Nickel Corporation (BNC) in Zimbabwe, although it also has significant gold and copper projects in the Democratic Republic of Congo as well as assets in Angola, Botswana and South Africa.

Mwana recently outlined ways to save it $2,6 million a year in the wake of its financing struggles.

The pan-African, multi-commodity mining and development company revealed its non-executive directors will all take a 50 percent pay cut, while its chief executive will take a 25 percent salary cut, as well as waiving a $495,000 bonus for last year.

Senior management also agreed to pay cuts of between 15 percent and 20 percent as of September 1, 2013.

The AIM-listed mining company also decided to “significantly scale down its London presence”.

“The remainder of the cost savings will primarily be achieved through a review of suppliers’ contracts, reducing advisory costs and benefiting from ancillary savings associated with the scaling down of the London office,”  said the company.

Mwana suffered from lower commodity prices in 2013 and told the market in June it was hoping to save $5 million a year and considering its options in relation to its assets and projects including BNC and Zani Kodo.

In the full year to March this year, the group widened its loss to $43,5 million, compared with a loss of $6,7 million in 2012, after incurring a $43,7 million impairment charge for its BNC operations.

The fall in the nickel price from about $18 000/tonne when the BNC operations were restarted in 2012 to about $13 500/tonne recently, has hampered the company’s plans to raise about $15 million in debt or equity for the ongoing ramp-up of the Trojan mine under the current mine plan, prompting Mwana to impair BNC in its 2013 financial accounts.

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