JOHANNESBURG (miningweekly.com) – Multicommodity miner Mwana Africa has lifted quarter-on-quarter output from its flagship Freda Rebecca mine by 18%, producing 14 716 oz of gold for the first quarter of 2014, confirming the Zimbabwean operation’s recovery from a leach tank incident earlier this year.

The improvement in gold production came on the back of a recovery in mill throughput, and a reconfiguration of the production circuit, following temporary reductions after the leach tank loss in February.

Mwana said in a statement on Tuesday that work to restore the leach processing circuit had progressed well, with the leach tank 2 recommissioned in April and commissioning of the replacement for tank 3 expected in the next quarter.

An insurance claim had been submitted with respect to the costs associated with the leach tank failure; however, the outcome of this claim was not yet known.

While head grade at the operation was in line with planned estimates for the quarter, it represented a 5% decrease from the previous three months which, in combination with lower recovery volumes, contributed to the higher cash costs an ounce relative to the prior year.

Cash costs increased from $897/oz for the financial year ended March 2013, to $949/oz for the quarter ended June 30, while the average gold price received contracted in line with market movements, from $1 654 in 2013 to $1 378 for the quarter ended June.

"It has been a quarter of mixed fortunes for Mwana. Freda Rebecca continues to perform well, remains cash generative, and I am delighted by the progress made since the leach tank incident earlier in the year,” commented CEO Kalaa Mpinga.

He also reported that significant progress had been made during the quarter on the construction of the pilot plant facility for the evaluation of tailings retreatment at Freda Rebecca, with construction nearing completion and commissioning expected in the next quarter.

The pilot plant would be used to verify the viability of retreating the mine's historical tailings.

DEVELOPMENT PROJECTS

During the June quarter, Mwana continued to advance its exploration projects, and received initial metallurgical testwork results from the Kodo Main portion of its Zani Kodo project, in the Democratic Republic of Congo (DRC).

In February, Mwana announced an increased gold mineral resource at Zani Kodo of 2.6-million ounces.

Testwork results indicated that the ore was non-refractory and responded well to all recovery processes investigated, with higher than 90% gold recovery obtained across all recovery methods tested.

“Good progress was also made on the Kodo Main prefeasibility study. However, in light of lower gold prices as part of a group wide review of expenses, work on the prefeasibility study is under review,” said the company.

Mwana also advanced the initial phase of geological exploration at its DRC-based joint-venture Katanga project, with a second-phase exploration programme planned once the results from the initial study had been received and interpreted.

In addition, operations at the company’s 52.9%-owned subsidiary Bindura Nickel Corporation’s (BNC) Trojan nickel mine, in Zimbabwe, progressed well over the quarter, with the first sale of concentrate to Glencore taking place in April.

The restart of operations at Trojan followed a capital investment of $23-million by Mwana, and four years during which all BNC assets were on care and maintenance.

Underground production at the operation continued to ramp up, with the company reporting that the milling and concentrator sections had performed well following the restart. Plant recoveries were in line with planned grade recovery curves for the newly commissioned concentrator.

While Mpinga noted that an “exceptional” amount of effort been invested in the Trojan restart over the course of the year, Mwana had embarked on a significant cost cutting exercise at corporate and project levels, as a result of a sustained decline in commodity prices.

“In response to lower nickel prices, we are reviewing a revised mine plan at Trojan, which considers focusing mining efforts on the higher-grade massives," he said.