MWANA Africa, the AIM-listed resources firm whose subsidiary Bindura Nickel Corporation (BNC) last week signed a deal mortgaging its future output for a US$50 million government fuel deal, has signed a US$10 million loan with majority-owned subsidiary, Fre
da Rebecca Gold Mine.
The deal is envisaged to significantly boost Freda Rebecca’s gold output over the next two years, businessdigest established this week.
Mwana Africa has agreed to release US$3 million to Freda Rebecca for the first phase of the expansion programme.
However, the loan will be subject to the necessary investment project status being granted by the Zimbabwean Finance ministry to allow the project to begin.
Indications are that Mwana Africa’s chairman, Kalaa Mpinga, who was in the country to defend BNC’s deal with the government mortgaging future nickel production for the retirement of a US$50 million fuel loan given to the government by French bank BNP Paribas, had been running around to have the status granted before the end of this month.
Phase one of the expansion plan is proposed to boost Freda Rebecca’s gold production by doubling tonnage processed to 55 000 tonnes per month and increasing the rate of gold production to 48 000 oz per year, up from 22 000 oz in 2005.
The gold producer intends to increase the number of leaching tanks and carbon absorption capacity and to purchase further haulage trucks under the initial expansion phase, expected to be completed by November.
This would cost between US$3-US$4 million, but local costs would be funded by Zimbabwe banks.
Phase two of the expansion plan would increase the processing of ore to 85 000 tonnes per month from underground sources plus an additional 20 000 tonnes per month from surface mining.
The rate of gold production is planned to increase to 100 000 oz per year. This would be made possible by the commissioning of a second SAG mill, further increased leaching capacity, reserve development and additional expansion of the haulage fleet.
The second phase is expected to be completed by the first quarter of 2007 at a cost of an additional US$4-US$5 million, which will be funded by a combination of debt and retained earnings, Mwana Africa said in a statement obtained by businessdigest.
“There is an overlap of the two phases due to the long lead time for the manufacture of the girth gear and pinion for the second mill,” the resources company said.