News Column

Mawson West Announces Q2 Financial and Operating Results

August 19, 2014

ENP Newswire - 19 August 2014

Release date- 15082014 - Perth, Australia - Mawson West Limited (TSX: MWE) advises that it has released its financial results and related Management's Discussion and Analysis incorporating the three months and six months to 30 June 2014.

Year to Date:

Year to Date production of 1,623 tonnes copper in concentrate and 131,337 ounces silver concentrate

Kapulo Project impairment charge of US$65 million

Year to Date revenue of US$11.1 million

Cash at the end of the Quarter of US$52 million

Dikulushi Underground mining ramping up - revised production target of between 6,000-7,000 tonnes copper in concentrate for 2014

Underground Resource definition drilling supports extension of Dikulushi Underground mine life

Kapulo construction activities accelerated - commissioning expected Q4 2014

Kapulo Mineral Reserve update now expected Q4 2014

Year to Date and Q2 2014 results conference call - Tuesday 19, August 2014


The Company advises of an impairment of US$65M (before tax) against the carrying value of the Kapulo project assets following a review of operating costs in conjunction with updated commodity prices, resource estimates and metallurgical domain assumptions.

The impairment is a non-cash item and reflects recent actual and updated assumptions against a feasibility study which is over three years old. The Kapulo project will not be impacted operationally by this impairment. The Company remains confident that the residual capital cost and commissioning targets for Q4 2014 for the Kapulo project will not be impacted.

A Mineral Reserve update for the Kapulo project, supported by a NI 43-101 Technical Report, is now scheduled for release in Q4 2014. Company Chairman, Anthony Lloyd said 'The Board remains of the view that investment in the Kapulo project is sound. With construction now significantly advanced, we look forward to commencing commissioning of the Kapulo project in Q4 2014.'

Financial Year to Date 30 June, 2014 (Q2 2014)

Revenue of US$11.1 million (Q2 US$4.3 million)

C1 cost per pound of US$4.35 (Q2 US$5.38)

Copper sales of 1,812 tonnes of copper in concentrate (Q2 674 tonnes of copper in concentrate)


The Dikulushi underground mine continued to ramp up during the Quarter. Advances in level drive development were partially impeded by challenging ground conditions in localised areas of the 790RL and 770RL combined with the delay to the installation of the primary ventilation circuit during the Quarter. Adjustments to mining strategies have been made to accommodate ground conditions.

As a consequence, the Company has revised its production guidance to be between 6,000 - 7,000 tonnes of copper in concentrate for 2014 and its C1 cost guidance to range between $2.50 - $2.75 ($3.10 - $3.35 excluding silver credit).

Production for the Quarter totalled 744 tonnes of copper in concentrate and 65,474 ounces of silver in concentrate. A total of 36,425 tonnes of ore, at a head grade of 2.71% copper and 68 g/t silver, was processed, sourced from both underground and low grade stockpiles. Year to Date production totalled 1,623 tonnes of copper in concentrate and 131,337 ounces of silver in concentrate. A total of 87,616 tonnes of ore, at a head grade of 2.43% copper and 57 g/t silver was processed.

Mawson West Chief Executive, Bruce McFadzean said: 'The first six months of 2014 has been a transition period for Mawson West as we ramp-up production activities at the Dikulushi underground mine. Production for the year to date is at the lower end of expectations due primarily to a late start and delays to the installation of the ventilation system. We now expect to achieve production of between 6,000-7,000 tonnes copper during 2014. Importantly, I commend our team for safely commencing an underground mining operation without a single Lost Time Injury (LTI).'


Construction activities at the Kapulo project continued during the Quarter, with cumulative construction expenditure totalling US$87 million (including owner's costs but before exploration and evaluation, pre-stripping and funding costs) and a forecast total construction expenditure of US$124 million.

The grinding, flotation and thickening circuits continue to advance in line with the target to commence commissioning in Q4 2014. Construction of the tailings dam and water supply systems have also continued and it is expected that pre-stripping and initial mining activities will commence late in Q3 2014.

The Kapulo Mineral Reserve update is scheduled for release in Q4 2014. Studies to date have resulted in an impairment charge of $65M (before tax) against the carrying value of the Kapulo project assets. This has resulted from a review operating costs in conjunction with updated commodity prices, resource estimates and metallurgical domain assumptions for the project.

'Development of our Kapulo project is advancing at a rapid pace following the execution of an offtake agreement and prepayment facility with Trafigura Pte Ltd in April 2014. We remain confident on our residual project capital expenditure and commissioning targets for Q4 2014,' said Mr McFadzean.

Exploration and Resource Definition

During the Quarter, a total of US$1.2 million was spent on exploration and resource definition. For the year to date, total expenditure was US$2.1 million.

Drilling from underground targeting upgrades to the Dikulushi Mineral Resource continued during the Quarter. Results to date indicate Inferred Mineral Resources may convert to higher confidence categories at similar widths and grades.

In June 2014, the Company announced a maiden Mineral Resource estimate at Kabusanje and updated the Mineral Resource estimate at Kazumbula, both satellite deposits being within 15km of the Dikulushi Mine.

Near-mine exploration at Dikulushi targeted a number of prospects during the Quarter.

Mr. McFadzean said, 'Ongoing drilling at both Dikulushi and Kapulo continues to progress positively and we anticipate releasing an updated Mineral Reserve for Kapulo during Q4 2014 in addition to a Resource update for the Dikulushi Underground which potentially extends the life of mine beyond 2014.'


In April 2014, Mawson West announced that it had entered into an offtake agreement, through its 90% owned subsidiary Anvil Mining Congo SARL, with Trafigura Pte Ltd ('Trafigura') to sell 100% of the copper concentrate produced at the Dikulushi and Kapulo mines for a period up to 48 months from the commencement of commercial production at Kapulo. As part of the offtake arrangements Trafigura provided a prepayment facility of US$50.0 million, which was fully drawn down in April 2014.

Mr. Louis Rozman resigned as a Non-Executive Director on April 4, 2014.

Mr. Mark Hohnen and Ms. Susie Corlett were appointed as Non-Executive Directors of the

Company on April 5, 2014.

Subsequent Events

Mr. Alistair Croll was appointed to the position of Chief Operating Officer, effective July 28, 2014.

Mr. Croll has extensive senior executive experience in the mining industry both in Australia and overseas having previously held senior roles with St Barbara Limited, Kimberley Diamond Company, Blina Minerals N/L, Consolidated Minerals Limited, Anglo American Platinum Limited and the De Beers Group.

Mr. Greg Entwistle was appointed to the position of Chief Development Officer, effective July 28, 2014. The appointment of Mr. Croll in the role of Chief Operating Officer and Mr. Entwistle's transition to Chief Development Officer ensures significant focus remains on delivery from the Company's Kapulo and Dikulushi projects in 2014, in addition to securing future corporate objectives.


Mawson West Limited

Bruce McFadzean

Chief Executive Officer and Managing Director

Tel: +61 8 9485 9800


Mark Di Silvio

Chief Financial Officer

Tel: +61 8 9485 9800


Kusal Meemeduma

Investor Relations

Tel: +61 2 8999 1010


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Source: ENP Newswire

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