JOHANNESBURG (miningweekly.com) – Despite numerous challenges, Aim-listed Mwana Africa increased gold production at its Freda Rebecca mine and nickel concentrate output at its Trojan mine, in Zimbabwe, during the three months ended March 31.

The diversified miner noted in a statement to shareholders on Thursday that it had experienced a period of significant progress across its existing operations and new projects and was steadily working towards major near-term developments in Zimbabwe and South Africa.

“At Freda Rebecca, we have achieved steady production, although the need to work through low-grade zones as development moved towards new high-grade and main stopes persisted.

“While gold prices declined progressively throughout the [2015] financial year, the company was able to achieve a 4% reduction in [the mine’s] cash costs,” CEO Kalaa Mpinga commented. 

He added that the focus remained on further curtailing costs and grade control as mining moved into the higher-grade stopes.

Freda Rebecca produced 14 358 oz of gold in the quarter ended March 31, marginally higher than the 14 298 oz produced in the quarter ended December 31, 2014.

Gold recovery, however, increased to 83% from 78%, as losses to tailings because of fine carbon, were reduced.

Further, Mwana planned to start a 11 300 m drilling programme, including surface and underground holes, to improve grade estimation and confidence, as well as extend the operation’s life, this month.

This would lead to an updated independent Joint Ore Reserve Committee-compliant resource by the end of the June quarter.

Mwana Africa highlighted that it had started the commissioning of a secondary crushing circuit during the quarter, with this work still in progress.

The full benefits were expected to be received during the first quarter of the 2016 financial year, with gold production to improve, owing to sustained recoveries and improved mill throughput from secondary crushing, while grades would remain at current levels.

Meanwhile, work at the Trojan nickel mine progressed steadily as the refurbishment of equipment programme started to have a positive impact. While the global nickel price had declined in the quarter ended March 31, all-in sustaining costs decreased by 36.5% to $7 293/t, as greater nickel production contributed to lower unit costs.

In February, Mwana Africa had completed the fundraising of $20-million, through the issue of a five-year bond, to be used to restart the Bindura nickel smelter during the 2016 financial year.

The mine had lifted its nickel concentrate production to 2 072 t in the March quarter, compared with the 1 395 t produced in the December 2014 quarter.

Production for the three months to end June 30 would, however, be lower than that produced in the quarter under review, owing to a planned month-long shutdown to tie in with the Trojan redeepening project, which would extend the shaft system by a further 240 m.

The C shaft would allow access to some 5.37-million tonnes of resources below the current loading station at 37/0 level.

The shutdown would start on June 7 and was projected to be completed on July 6.

Work at the company’s Birunda nickel smelter also continued, with a restart and delivery of the furnace bricks for relining expected in May.

DIAMONDS
In the period under review, Mwana saw tonnage throughput at the Klipspringer slimes retreatment (KSR) project, in South Africa, decrease from the previous quarter, as a result of reduced operating hours associated with the December/January holiday period.

Monthly throughput subsequently recovered and was consistent with previous quarters.

Mined grades were lower during the quarter and were related to restricted mining flexibility caused by wet conditions and restricted access to working faces on the slimes dam.

One sale of 11 748 ct took place during the quarter and realised a selling price of $19.5/ct, in line with previous quarters' valuations.

The mine would also remain on care and maintenance, with restart options for the Klipspringer underground section under review.