JOHANNESBURG (miningweekly.com) - Aim-listed Mwana Africa generated revenues of £18,8-million in the 2010 financial year, despite only restarting its Freda Rebecca gold mine in Zimbabwe in the second half of the financial year, and its Bindura Nickel Corporation (BNC) remaining on care-and-maintenance throughout the year.
Mwana's Freda Rebecca mine returned to commercial production in October 2009, in time to benefit from a record high gold price. It generated revenue of £6-million.
During the six months ended March 31, the mine produced 8 550 oz of gold, and had produced 11 997 oz of gold to date, achieving average revenue of $1 118/oz.
Mwana CEO Kalaa Mpinga said that the year had been an important one for the company, with the restart of production at Freda Rebecca. He added that the company would now focus on achieving the planned ramp up in production at the mine.
"In March 2009, Mwana announced that it would undertake a two-phase refurbishment programme at the mine. We now look forward to a return to production in line with the planned 30 000 oz/y of gold from phase one."
In addition, Mwana would use the $10-million facility approved by South Africa's Industrial Development Corporation to implement the second phase of the mine's refurbishment programme, which was planned to increase output to about 50 000 oz/y of gold.
Meanwhile, Mpinga said that Mwana would also concentrate on implementing BNC's plans to resume operations at the Trojan nickel mine and concentrator.
"We have advanced plans for the resumption of operation at the Trojan nickel mine and concentrator, including proposed offtake terms."
Mwana chairperson Oliver Baring said that as the only integrated nickel mine, smelter and refinery complex in Southern Africa, BNC had the potential to become a processing centre for materials produced throughout the region.
"Our plans to restart mining at Trojan and the production and sale of 7 000 t/y of nickel in concentrate are at an advanced stage. SRK Consulting is preparing a competent persons report on the restart plans and this report is nearing completion and we are now evaluating the strategic and financing options available to the group."
Mpinga commented that the company remained confident that BNC would be brought back into successful production, and would return to being an important contributor to Mwana and to the economy of Zimbabwe.
Meanwhile, the London-listed company commented on new economic empowerment regulations that were released by the Zimbabwean government in February, saying that in the past it had taken steps towards indigenous economic empowerment at its BNC and Freda Rebecca mine, including BNC's listing on the Zimbabwe stock exchange and Mwana's commitment to sell a 15% stake in Freda Rebecca to a local partner.
The regulations included a statement that the government would endeavour to procure that at least 51% of the shares of all companies with a market capitalisation over $500 000 was held by indigenous Zimbabweans.
However, Mpinga commented that mining was unique in the scale of its need for capital investment, and its potential to contribute significantly to the country's economic recovery. "The Zimbabwean Chamber of Mines, of which BNC and Freda Rebecca are members, is in discussions with government regarding the application of the regulations to the mining sector.
"We are confident that, across the country, solutions will be found that balance both the need to attract investment to Zimbabwe and the responsibility of the mining industry to support the economic development of the whole country," he said.
Mwana also operates in South Africa, Botswana, Ghana, Angola and the Democratic Republic of Congo (DRC).
The company said that its Klipspringer mine in South Africa had begun to benefit from a strong recovery in the international price for diamonds, but that exceptionally high rainfall in the region hindered production during the last quarter of the year. "Conditions have subsequently improved, with a consequent increase in the rate of production."
Further, Mwana reported that it had resumed exploration at the Zani Kodo gold project in the DRC, and had also appointed advisers to evaluate potential joint-venture partners for its Semhkat project where exploration activities were scaled back in 2008 following the collapse in commodity prices.
The group reported a loss for the year before tax of £14,4-million.