Mwana to ramp up Zim mines

HARARE - Aim-listed Mwana Africa Plc (Mwana) plans to ramp up production at its Zimbabwe-based gold and nickel mines following a strong performance in 2013.

The resources group, led by group chief executive Kalaa Mpinga, said it planned to increase Freda Rebecca’s gold production to 100 00 ounces per annum and boost nickel in concentrate output to steady-state of 8 000 tonnes annually at Bindura Nickel Corporation (BNC).

Freda Rebecca is currently producing 65 350 ounces of gold annually while BNC sold 4 842 tonnes of nickel in concentrate in the six months to December 2013.

Mpinga noted that Mwana is looking at increasing its revenue growth by seven percent to $65 million and is targeting a 40 percent reduction in exploration spend.

“We are also focusing on an 88 percent rise in group after-tax profit to $7,5 million and a nine percent increase in capital investment due to Trojan (BNC) restart,” he said.

This comes after the Pan African group’s half-year results in December showed savvy cost-cutting measures along with fundraising had stabilised the group after the drop in gold and nickel prices.

In the first six months of the 2014, Mwana is also forecasting a 50 percent cut in non-executive director fees, 25 percent cut in the chief executive’s salary and a 15-20 percent cut in executive management salaries.

Mwana’s ambitious projections follow a record 76 percent surge on nickel in concentrate sales to 2,651 tonnes in the quarter ended December 2013.

During the period under review, Trojan owned by the group’s subsidiary BNC — recorded a 74 percent growth in revenue to $24,5 million, driven by the enhanced sales volumes.

Cash costs increased from $10,390 to $11,819 per tonne.

Trojan, which had been mothballed for nearly four years due to depressed international nickel prices among other challenges, restarted production in 2012.

However, the Aim-listed resources concern’s gold miner, Freda Rebecca, produced 13 072 ounces of the yellow metal, a 25 percent decrease from prior comparable quarter.

It attributed the slump to alterations at the mill — resulting in some downtime — but said should lead to increased throughput and a decreased head grade.

“The company has noted improved throughput following the modifications to the mill and does not anticipate that the issues with head grade will continue into the fourth quarter,” said Mwana.

At the Klipspringer diamond mine in South Africa, mining and treatment operations started on October 7 last year and so far the slimes retreatment programme has produced 6 114 carats at an average price $22,75 per carat.

Steady State production at the plant of 22 560 tonnes per month is planned from February 2014 onwards.

Comments (1)

vatete - 24 January 2014

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