HomeBusiness DigestFreda Rebecca spends US$500 000 on roads

Freda Rebecca spends US$500 000 on roads

FREDA Rebecca Gold mine is resurfacing its 12km underground road network at a cost of US$500 000 to improve efficiency and reduce operating costs, general manager Toindepi Muganyi said.

Report by Gamma Mudarikiri
Freda Rebecca is owned by Mwana Africa plc, a multi-commodity resources company with operations and exploration prospects covering gold, diamonds and base metals such as nickel in Zimbabwe, Angola, Botswana, Democratic Republic of the Congo and South Africa.
Muganyi said the ongoing project would include surfacing of the underground road network surface with concrete to improve efficiency and reduce operating costs.
He said resurfacing would reduce purchase of large volumes of tyres for underground operating equipment.
Freda Rebecca said the move was part of its plans to increase with production volumes.
Gold production was ramped up 75% to 47 770 ounces in the first quarter of this year after the company installed and commissioned its second milling circuit in 2011. This compares to 27 240 ounces produced in the corresponding period last year.
“External consultants were hired to assist the operations team with the plant optimisation work at the mine, leading to an increase in the output at the processing plant to 2 700 tonnes per day,” said Muganyi.
He said the company was this year focused on increasing production levels further to more than 50 000 ounces per month, while simultaneously reducing operating costs.
Operating costs however, continue  to increase,  hampering  the company’s  operations. Muganyi said the  the huge hike in electricity tariffs in particular is likely  to  compromise the  mine’s  expansion plans.

Freda Rebecca’s electricity bill as of June this year had surged to US$6,3 million, compared to US$1 million in the same period in 2009, representing a 530% increase.
Muganyi said the electricity bills, coupled with the increase in royalty fees and taxes to government, as well as a rising wage bill, were unsustainable and would compromise profitability of the mining company.
This, however, is in spite of the upward movement in the international price of gold currently averaging US$1 770 per ounce compared to US$1 620 per ounce in the same period last year.
The company said it was considering generating its own power to address the challenge of high power costs and erratic supply. Freda Rebecca continues to consolidate its position as a flagship of the Mwana Africa group.
In the full year ended March 2012, Mwana Africa reported an 86% increase in revenue to US$81,3 million, helped by a solid performance by Freda Rebecca mine which contributed US$17,7 million to group profit.

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