Gold sales from Pan-African multi-commodity mining and development company Mwana Africa’s Freda Rebecca mine, in Zimbabwe, dropped slightly to 57 799 oz during the financial year ended March 31, from the 58 704 oz sold during the prior financial year.

During the year under review, the gold mine’s cash costs increased from $959/oz in 2014 to $1 259/oz. Further, the mine’s all-in sustaining costs (AISC) also increased slightly from $1 186/oz in 2014 to $1 259/oz in 2015, “as lower grades led to greater mill tonnages”, Mwana explains.

Further, gold recoveries at Freda Rebecca declined slightly to 79% in 2015 from the 2014 recovery rate of 82%.

Mwana executive chairperson Yat Hoi Ning mentions that gold production at Freda Rebecca “was in line with the prior year but slightly below management’s expectation”, partly because of equipment failures, which “gave rise to recovery problems in the processing plant and also because accessing the mine’s higher-grade orebodies took longer than expected”.

“These problems have now been rectified and I confidently expect that our underground and surface operations will attain their full potential during the 2016 financial year,” he says.

Meanwhile, Mwana subsidiary, Bindura Nickel Corporation’s (BNC’s), nickel concentrate sales increased to 7 352 t during the 2015 financial year from the 7 129 t sold in the prior year.

BNC owns and operates the Shangani and Trojan nickel mines, in Zimbabwe.

However, BNC’s cash costs and AISC for 2015 also increased to $12 644/t and $14 428/t respectively.

The company attrib-uted these increased costs to equip- ment refurbishment at BNC’s operation, which also resulted in “restricted mine tonnages”.

Nickel recoveries also experienced a marginal decline from 86% in 2014 to the 84% achieved during the period under review.

Hoi Ning says: “The past year has proved to be particularly challenging for the Mwana group as a whole, as the prices of our two principal products, gold and nickel, weakened and have continued to fall since the financial year-end. “This was exacerbated by lower than planned production figures for the two metals. “A new board was elected after the end of the reporting period and I am confident that under this new management, improvements will be seen.”

He further notes that Mwana initiated the work and financing needed to restart the BNC smelter, which is planned for April next year, having completed a fully subscribed $20-million bond in the final quarter of the com- pany’s financial year, the proceeds of which will be used for the restart of the smelter.

A $16.4-million portion of the bond funding was banked before year-end, Hoi Ning states, adding that the $3.6-million balance was received by BNC in early July. Further, the investor signed a letter of commitment indicating that the balance will be transferred by the end of September this year.

Hoi Ning points out that once smelting operations resume, BNC will have “ample capacity to process [its] own concentrated into nickel leach alloy”. He adds that excess capacity at the smelter will afford BNC the opportunity for toll smelting concentrations of other producers’ in the region.

Meanwhile, Hoi Ning says the equipment refurbishment and replacement programme, which became necessary following a period of neglect while the mine was on care and maintenance, at the Trojan mine has “virtually been completed”.

“Mining will now be positioned to extract ore from the massives’ orebodies where grades are higher than in those bodies that provided the bulk of the mine’s ore until recently,” he adds.

Meanwhile, Hoi Ning points out that shareholders voted in favour of board changes at a general meeting held subsequent to the March financial year-end. Four new nonexecutive directors have been appointed including Zimbabwean economist Anne-Marie Chidzero.

Hoi Ning was also appointed as executive chairperson following the shareholder vote “to manage the affairs of the company until the new CEO is appointed”.

He notes that the company has initiated an executive search for a new CEO.

Further, Mwana announced in July the appointment of assurance, tax and advisory firm Grant Thornton as the company’s nominated adviser and global financial services provider Cantor Fitzgerald Europe as its financial adviser.

“I would like to thank former nomad and broker [independent corporate broking, advisory and trading firm] Peel Hunt for their services to the company over the past couple of years and for their support in ensuring a smooth transition during the handover. “Grant Thornton and Cantor Fitzgerald are well known and highly respected firms, with global reach. I believe that they are well-placed to support the company’s strategy for future growth and we are excited to have them on board with us in this next phase and onward,” says Hoi Ning.

He concludes that during the course of the 2016 financial year he expects “Mwana’s operations and its financial situation to progress, though this is subject to metal prices. “Nevertheless, by the current year-end in March 2016, the group’s balance sheet should be stronger than at the start of the year”.

Mwana’s Zimbabwe-Based Operations
In Zimbabwe, Mwana Africa’s interests are the Trojan and Shangani nickel mines, and the Freda Rebecca gold mine. Mwana’s nickel and gold projects, also in Zimbabwe, include Hunter’s Road and Maligreen.

The Freda Rebecca gold mine restarted operations in 2009.

After a four-year period of care and maintenance at the Trojan mine, BNC carried out a $23-million restructuring and recapitalisation programme in 2012, which allowed it to restart the mine. The first sale of concentrate to global diversified mining com- pany Glencore took place in April 2013. In the 12 months ending March, Trojan produced 7 306 t of nickel.