JOHANNESBURG (miningweekly.com) – Much progress has been made during the third quarter of the 2015 financial year to restart Bindura Nickel Corporation’s nickel smelter and refinery, in Zimbabwe, Pan-African resources group Mwana Africa said on Monday.

Mwana revealed last year that the smelter at its 74.73%-owned subsidiary would likely resume operations in the first half of 2015 at an estimated capital cost of $26.5-million.

Following the issue of a $20-million bond in December to help fund the restart, work continued on the smelter with the delivery of the furnace bricks expected in the fourth quarter of the 2015 financial year.

Most of the key members of the project team were now in place, with the manufacturing of key components for the electrostatic precipitator (ESP) at various stages.

The ductings from converters to the ESP mixing chamber and the ESP inlet and outlet transition pieces would be delivered this month, the company said in a quarterly update to shareholders on exploration and production activities.

The removal of the old feed system had been completed and the furnace to ESP ducting had also been removed in preparation for the installation of new units.

Mwana noted that the rewinding of two of the four furnace transformers was under way, with completion scheduled for April.

The main component of the cooling system had been manufactured and was ready for shipping to site, while the hardware for the control and instrumentation system was on order.

Software programming for the Hatch furnace controller would start during the fourth quarter.

Meanwhile, Mwana reported a 14% decrease in gold output to 14 298 oz from its Freda Rebecca gold mine, in Zimbabwe, during the third quarter of the year.

This was despite the tonnes milled having increased by 0.8% quarter-on-quarter to 322 216 t – owing to a 1.8% increase in mill throughput – during the three months to December.

The average feed grade was 16% below that of the second quarter of the financial year, as the main production stopes posted lower-than-expected grades, Mwana explained.

The operation’s gold recovery rate fell from 80% in the second quarter of the year to 78% in the quarter under review, as the plant coped with a low-quality replacement carbon batch, which had resulted in gold being lost through fine carbon and being passed to tailings.

The mine’s cash costs for the quarter under review increased by 27% to $1 118/oz from the September quarter's $880/oz as a result of the 14% decrease in gold production and a 10% increase in operating costs, while all-in sustaining costs (AISC) rose 23% to $1 304/oz quarter-on-quarter from the $1 061/oz reported in September.

At Mwana’s Trojan nickel mine, in Zimbabwe, nickel-in-concentrate production decreased by 30% to 1 383 t in the December quarter as a result of fewer tonnes of ore milled, a lower head grade and reduced recoveries, as well as the refurbishment and maintenance of mobile equipment during the period.

Nickel sales fell to 1 395 t – a 31% decline on the 2 008 t achieved in the preceding quarter – owing to lower production volumes.

Mwana said the cash costs and AISC each hiked up 17% on a per-tonne basis quarter-on-quarter as a result of the reduced nickel production.

Meanwhile, diamond sales from Mwana’s South Africa-based Klipspringer diamond operation increased from 23 150 ct in the three months to September 30, to 44 200 ct in the December quarter, with three sales having taken place during the period.

The company attributed this to the disposals from stocks accumulated at the end of September.

Mwana reported a cash balance of $5.5-million as at December 31.