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Freda Rebecca Gold Mine

Oliver Kazunga Acting Business Editor
PAN-African multi-commodity mining and development firm, Mwana Africa, says it aims to reduce costs to allow its operations to remain profitable despite the decline of metal prices on the international market.

The group has operations and exploration activities that cover gold, nickel and diamonds in Zimbabwe, South Africa and the Democratic Republic of Congo.

Locally, the group owns Bindura Nickel Mine (BNC), Freda Rebecca Gold Mine, Trojan Nickel Mine and Shangani Nickel Mine, which at the moment is under care and maintenance.

In unaudited interim financial results for the six months ending September 30, 2014, Mwana Africa chief executive officer Kalaa Mpinga said during the period under review, the group saw considerable operating progress across all its key projects.

“This progress is continuing and augurs well for future growth.

“At Freda Rebecca consistent throughput is now being achieved and this is helping to contain costs and ensure that the mine remains profitable should gold prices retreat further while at Trojan, the primary focus continues to be the ramping up of operations,” he said.

During the period under review, the group’s revenue was 30,6 percent up to $84.9 million while profit after tax grew to $7,7 million from $7,5 million during the comparable period in 2014.

Mpinga said the decision to restart Bindura’s smelter at a total capital cost of $26.5 million has been central to their planning for sustainable and profitable nickel production.

“Completion of the resizing of head-office has reduced overheads, enabling our focus to move towards containing costs at the operational level.

“Our aim remains fixed on restraining costs to levels that should allow our operations to remain profitable no matter what becomes of metal prices.”

Mwana Africa reported that the gold price continued to decline and unit production costs of nickel rose in line with the metal price.

“While production at our nickel and gold operations was higher during H1 FY2015 than in the corresponding period of the preceding year, the six months were not without challenges.

“The gold price continued its decline and unit production costs of nickel rose in line with the metal price. The diamond market remained a buyer’s market with suppliers pressured by tight liquidity.

To illustrate this, the average gold price achieved by Freda Rebecca in H1 FY2015 was $1,283 per ounce compared to $1,352 per oz in H1 FY2014. “On the other hand, average nickel prices rose with BNC achieving an average nickel price of $18,168 per tonne for the period under review, compared to $14,268 a tonne in the same period last year.

It said with Freda Rebecca and Trojan mines were operating steadily and the introduction of a more appropriate corporate cost structure, attention has turned to containing on-mine costs.

“Despite the persistent weakness of commodity prices, both our producing mines continue to generate operating profits.”

At Freda Rebecca, tailings test work showed low recoveries and price due to gold price constraints.

Modifications to the tailings retreatment plant to treat the run of mine ore were now being considered while at BNC the group has initiated a reopening of the smelter.