Zim mines key to Mwana Africa’s growth

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BINDURA Nickel Corporation and Freda Rebecca mine will be central to UK-listed Congolese mining house Mwana Africa Ltd’s operations, according to incoming chairman Mark Wellesley-Wood.

Wellesley-Wood took over the reins at the London’s Alternative Investments Market mining house this week.

He said, thanks to the Freda Rebecca gold mine and the Bindura nickel mine (both in Zimbabwe), Mwana would be self-sufficient going forward. This follows a two-part capital raise by Mwana, which saw US$6 million injected into its operations.

“We see an opportunity to concentrate on the assets and maximising those for shareholders,” Wellesley-Wood said in an interview with Proactive Investors.

He said the first prong of Mwana’s strategy had been to find significant cost savings and the group was almost halfway to unearthing an annual total of US$1 million.

This was now being ploughed into “improving” the existing asset base, which also includes the three million-ounce Zani Kodo deposit in the Democratic Republic of Congo (DRC).

Mwana management’s main focus would be on a smaller number of core assets from a portfolio that spanned gold, nickel, copper, diamonds and magnesium in four African countries.

“We have one cash flow generator in Freda Rebecca (Zimbabwe),” said Wellesley-Wood.

“We have Bindura’s bigger operations, which are on the cusp of turning around and being a contributor and we have a significant resource in the DRC.

“The size and the definition of what’s core and what’s not is partly in the future, and is part of a piece of work we are conducting, and we will report back on that later in the interims, but it is fair to say this cost reduction exercise will spread throughout the group.”

There were a number of events that should point investors to the true value of Mwana’s assets, chief executive officer (CEO) Kalaa Mpinga told Proactive.

The first was an updated competent person’s report prepared by SRK Consultants for the Bindura Nickel Corp.

To make it financially viable in this low price environment for the metal, the group accelerated its programme to access the higher grade material.

It’s this which should ensure Bindura is a far stronger contributor to the business than has been previously predicted. The SRK update, expected by the end of the month, would put the meat on the bones, Mwana CEO revealed.

Last month some 700 tonnes of nickel was produced by the Trojan smelter, which was a new record, Mpinga revealed.

The Freda Rebecca mine, meanwhile, was expected to produce around 72 000 ounces of gold next year, while emphasis will be on getting the C3, or total cash cost of the operation, below US$1 000 an ounce.

A boost to the operation would come if Mwana successfully got the tailings retreatment plant up and running. This could add a valuable 15 000 ounces to output of the precious metal –– a kicker that hadn’t been factored into the current share price.

 

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