JOHANNESBURG (miningweekly.com) – TSX-listed Mawson West has concluded a review of its Dikulushi and Kapulo operations in the Democratic Republic of Congo (DRC) and, as a result, has decided to place the Dikulushi mine on care and maintenance.
This follows the successful completion of the initial components of its $33.4-million financing package with Galena Private Equity Resources Fund.
The Perth, Australia-based company noted in a statement on Tuesday that the decision was driven by commodity price deterioration and lower-than-expected copper and silver production at Dikulushi, and was reached in consultation with lenders to the company Galena and Trafigura.
A detailed mining study had started to determine the appropriate mining strategy, economics and structure to assess future operation opportunities.
During 2014, the Dikulushi mine produced about 3 000 t of copper in concentrate – well below original expectations. Performance at Dikulushi had continued to be affected by mining dilution, resulting in lower-than-expected mined ore grades.
The placement of the Dikulushi mine on care and maintenance was not expected to affect the previously announced financing and debt-restructuring package.
Meanwhile, Mawson’s board of directors had also decided to reduce the number of people currently working at the Kapulo copper project.
As part of a wider corporate review, the company was also considering its corporate structure and associated costs.
Mawson West would hold an extraordinary general meeting of shareholders to approve components of the Galena financing package on February 25 in Perth. Additional information on this meeting would be provided to shareholders shortly.
Dikulushi and Kapulo are in the Katanga province in south-eastern DRC. Mawson West is also focused on exploring multiple prospective targets within its significant land-holding of about 7 300 km2 in DRC's rich copper belt.