Mwana Africa fills working capital gap as it raises a further £1.8mln

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By Zimbabwe Investor on September 18, 2013. No Comments

US$20sMwana Africa appears to be slowly putting together the financial building blocks for growth after announcing on Tuesday it successfully completed its second fundraise of the month.

This time it has brought in £1.8mln via a placing of shares at 1.57p each, which added to the £2.1mln banked on September 5 gives it the working capital require to develop its assets.

Once again the group received backing from China International Mining Group Corporation and its chairman Ning Yat Hoi, which hold 22% and 7.8% respectively of Mwana after subscribing for stock.

The group’s main subsidiary is the Bindura Nickel Corporation in Zimbabwe, although it also has significant gold and copper projects in the Democratic Republic of Congo as well as assets in Angola, Botswana and South Africa.

Chairman Mark Wellesley-Wood said: “I am delighted with the support shown for Mwana’s strategy.

“With the working capital shortfall addressed, the focus can now shift to improving the efficiency and cost competitiveness of the Company’s operations.”

The shares, up 52% in the last month, were ahead a further 1.2% at 1.67p in morning trade. Broker Peel Hunt’s risked net asset value is 6 pence a share (down from 7p previously to account for the dilutive effect of the cash call).

Analyst Michael Stoner remains reasonably bullish on the stock. “Today’s placing goes a long way to restore  the investment case to which we pointed earlier this year,” he said.

“We expect the additional cash raised today to be put to good work, adding value to the portfolio of assets as well as strengthening the balance sheet.” – Proactive Investors