Asa Resource in record loss

HARARE - Aasa Resource Group, formerly Mwana Africa, has registered a record loss of $9,6 million in the full year to March 2016 compared to a $7 million profit last year as revenue was dragged lower by weaker selling prices for gold and nickel.

The group’s executive chairman, Yat Hoi Ning, said revenue in the year slumped to $121,3 million from $152,3 million , driven by a 38 percent fall in nickel prices and eight percent decline in gold prices.

“The company is emerging from one of its most challenging periods and is in better shape than one might expect. From this perspective, the financial performance the company is reporting on today doesn’t truly reflect the initiatives and progress being undertaken across the group,” he said.

At the Freda Rebecca gold mine in Zimbabwe, gold sales grew to 67 672 ounces for the year from 57 799 the year prior. But the average realised price for that gold was $1 149 per ounce, down from $1 247 per ounce the year earlier.

At Bindura Nickel Corporation (BNC), nickel in concentrate sales fell to 6 613 tonnes from 7 352 tonnes, while the average realised price for the nickel slumped to $6 737 per tonne from $10 855 the year before.

Ning noted that since the business changed its leadership, it has undergone a root and branch reform.

“Management has been actively scrutinising expenses across the group from corporate to exploration and mine level. This rigorous review has been essential in order to stabilise our financial position and, more importantly, to build a secure foundation for future growth,” he said.

“This strategy will allow the group to take advantage of the improving commodity market, especially for gold and nickel. The restructuring plan has been both organisational and financial,” Ning said adding that shareholders would be pleased to note that the group’s corporate overheads were now lean.

Ning and his new management took over from Mwana Africa founder and chief executive Kalaa Mpinga in one of the most unprecedented boardroom coups in Zimbabwe more than a year ago.

Mpinga founded Mwana Africa in 2001 after leaving Anglo American Corporation where he was director.

Meanwhile, Ning said the London-listed firm was also finalising negotiations with the Zimbabwean government over its indigenisation plan.

“The group is very aware of its obligations towards compliance and adhering to local rules and regulations. In order that it complies with these important requirements, including indigenisation laws in Zimbabwe, Freda Rebecca has already submitted its report to the respective ministry and is waiting on final approval,” he said.

“In the meantime, the group has mandated a consultant to prepare the indigenisation plan for BNC. As a responsible multinational listed company, we respect the local culture and strictly comply with the local laws and regulations for the benefit of local communities,” Ning added.

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