News Column

Mwana Africa PLC - Audited Results for the Year to 31 March 2014

July 11, 2014

ENP Newswire - 11 July 2014

Release date- 10072014 - Mwana Africa PLC is pleased to announce its audited financial results for the year to 31 March 2014.

Financial highlights

Group revenue up 30.5% to $142.5m (2013: $109.2m)

Group EBITDA up 40.4% to $25.0m (2013: $17.8m)

Group net profit for the year of $50.6m after a $28.0m reversal of impairment on BNC (2013: loss of $43.5m after a $43.7m impairment charge on BNC)

Attributable Group net profit for the year of $36.6m (2013: net loss of $28.6m) which equated to a basic earnings per share for the year of 2.89 US cents (1.82 GB pence). Prior year 2013: loss per share of 2.62 US cents (1.66 GB pence).

Corporate costs cut from 7.8% to 4.5% of revenue.

Group net cash from operating activities up 60.5% to $6.1m (2013: $3.8m)

Exploration spend decreased by 65.4% to $5.3m (2013: $15.3m)

Operational highlights

Freda Rebecca gold sales of 58,704 ounces for the year (2013: 65,350 ounces)

Freda Rebecca cash costs (C1) $959/oz (2013: $897/oz), all-in sustaining costs (C3) $1,186/oz (2013: $1,115/oz)

Freda Rebecca gold recoveries up to 82% (2013: 81%)

BNC first concentrate shipped April 2013 and new mining plan adopted July 2013

BNC production resumed profitably with nickel sales of 7,129 tonnes for the year

BNC cash costs (C1) $11,567/t, all-in sustaining cost (C3) $12,462/t

Chinese partner initiated Katanga copper buy-in by funding $7m exploration

Post period highlights

Freda Rebecca investigates viability of gold recovery from tailings and reviews resources.

BNC Smelter restart plan in place, subject to funding, to produce nickel alloy by calendar 2015.

Transfer of Zani Kodo mining licenses into Mizako SARL (Mwana Africa PLC is 80% shareholder) from SOKIMO SARL.

Klipspringer investigates viability of underground mining

Kalaa Mpinga, Chief Executive Officer of Mwana commented today: 'Despite some temporary setbacks at the beginning of the year, Mwana has made substantial progress in the past financial year progress that has continued since the year's end - and that has resulted in a significant strengthening of the Company's financial structure.

Our principal success came with the resumption of sales of nickel in concentrates by BNC's Trojan nickel mine in terms of an off-take agreement with Glencore. The significant cash-flow improvement that stemmed from higher nickel prices was complemented by solid production outcomes following the shift to mining the ore body's higher-grade massives.

Nickel prices have improved in response to Indonesia's decision to restrict exports of nickel in ore, and while I am certain that the price will be volatile in the near term, we are expecting it to have strengthened by 2017.

At the start of the past financial year we were contemplating having to ask shareholders for additional funding, but we took an early decision to change direction. The improved cash flow from BNC enabled us to reverse $28m of the previous year's $43.7m BNC assets impairment. Operationally, we undertook a fundamental restructuring to cut corporate costs.

Since the financial year's end we have embarked on the project to restart BNC's smelter (subject to securing funding) with the aim of starting production of nickel alloy in the first quarter of calendar 2015. Not only will this take the company up the value chain as better prices will more than offset the smelter's operating costs, but we will have the benefit of the significantly lower cost of transporting nickel metal rather than concentrate to our export harbour.

Our strategy now is to reward shareholders for their unstinting financial support as we continue to build Mwana into a diversified, multi-national mining company. Our financial strategy is to be self financing or, where appropriate, to take in other partners or funding for specific projects. The success of this strategy has been shown in our Katangese copper partnership with the Chinese copper products manufacturer, Zheijiang Hailiang Company Limited.

The Freda Rebecca gold mine suffered some production set-backs in the past financial year temporarily lower mining grades and production interruptions with the failure of a leach tank. The problems had been resolved by the end of the financial year. We are now in a position to evaluate the viability of adding gold production from the reprocessing of old residues.

In South Africa we are currently evaluating the viability of resuming underground mining at the Klipspringer diamond mine as well as of the possibility of recovering small diamonds from the mine's coarse-tailings residues. During the past financial year recovery of micro diamonds from residue slimes contributed to covering the property's care-and-maintenance costs.

The current financial year is confidently expected to result in Mwana's further financial strengthening and in that of our ability to advance the development of new projects. And, as the share price has advanced since the start of 2014, I am confident that further improvements will flow from our proving our ability to develop and operate our assets profitably.'

About Mwana Africa PLC

Mwana Africa PLC is a pan-African, multi-commodity mining and development company. Mwana's principal operations and exploration activities involve gold, nickel, copper and diamonds in Zimbabwe, the Democratic Republic of the Congo (DRC), South Africa, Angola and Botswana.

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 include Hunter's Road and Maligreen, with the Makaha deposit being a gold exploration prospect.

The Freda Rebecca gold mine in Zimbabwe restarted operations in 2009 and in the 12 months ending March 2014, produced 58,704 oz of gold. The Trojan nickel mine is owned by Mwana's Zimbabwe subsidiary, Bindura Nickel Corporation (BNC). After a four year period of being under care and maintenance, in 2012 BNC carried out a US$23m restructuring and recapitalisation programme which allowed it to restart the Trojan mine. The first sale of concentrate to Glencore took place in April 2013.

In the DRC, Mwana Africa has exploration programmes in Zani-Kodo (gold), Katanga (copper) and a 20% stake in Societe Miniere de Bakwanga (MIBA) - (diamonds).

Copper in the Katanga Province - Mwana has a Joint Venture Agreement with Zhejiang Hailiang Company Limited to jointly explore some of these licensed areas. The Katanga concessions are otherwise known as SEMHKAT (Societe d'exploration Miniere du Haut Katanga).

The joint venture Zani-Kodo project has a gold mineral resource of 2.97moz. Klipspringer diamond mine is Mwana's South African interest. Mwana holds a 69.77% interest in Klipspringer, which is currently on care and maintenance but involved in a tailings retreatment project and investigating the viability of underground mining.

For a copy of the full results please visit the company's website:


Caroline Mathonsi

Tel: +263 (0) 772 164 486

Mob: +44 (0) 787 675 4360


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Source: ENP Newswire

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