Mwana Africa makes progress on cutting costs as gold production increases

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By Zimbabwe Investor on April 17, 2015. No Comments

Mwana Africa (LON:MWA) made steady progress at its gold, nickel and diamond producing assets in the first quarter of 2015.

At the Freda Rebecca gold mine in Zimbabwe, gold production increased quarter-on-quarter by 0.42% to 14,358 ounces, as the recovery rate increased to 83% from 78%.

The need to work through low-grade zones as development moved towards new high-grade and main stopes persisted, however, revealed Kalaa Mpinga, chief executive officer of Mwana.

Tonnes milled decreased by 8% to 297,953 tonnes (t) as mill throughput and running time both reduced by 4%.

The average gold price received rose to US$1,222 an ounce from $1,195 an ounce in the previous quarter, while the all-in sustaining cost at the mine improved by 4% to US$1,254 an ounce from US$1,304 an ounce.

“The focus remains on further curtailing of costs and grade control as mining moves increasingly into the higher-grade stopes,” said Mpinga.

At the Trojan nickel mine, also in Zimbabwe, sales of nickel in concentrate rose by 49% quarter-on-quarter to 2,072 tonnes, but mill throughput fell to 140,045 tonnes as production was constrained by a temporary host breakdown, subsequently resolved.

The average price received for metal in concentrates was US$9,489 a tonne, down from US$10,313 in the previous quarter.

All-in sustaining costs reduced significantly by 36.5% to US$7,293 per tonne of contained nickel as greater nickel production contributed to lower unit costs.

Meanwhile, work on the re-start of the Bindura smelter in Zimbabwe continued during the quarter, with major components either delivered in the quarter or expected to be delivered this quarter.

On the diamonds front, the Klipspringer asset in South Africa saw recovery from Marsfontein fine residue (50% of which is attributable to Mwana) tumble to 17,781 carats from 31,850 carats, with the processing of residues hampered by the need to beef up security after an armed robbery in January.

The average sale price achieved in the quarter rose to US$19.50 a carat from US$19.31 in the preceding quarter.
“The past quarter has been a period of significant progress across our existing operations and new projects and we are working steadily towards major near-term developments in Zimbabwe and South Africa,” said Kalaa Mpinga.

The CEO added that there remain challenges ahead, “but with our newly refreshed board now in place, and the results of our comprehensive cost control programme beginning to bear fruit, Mwana is well positioned to deliver positive results.”

Shares in Mwana Africa were off 1.7% at 1.75p in the first half hour of trading.

– Proactive Investors