Interim results from London Stock Exchange listed Mwana Africa reveal the group has been successful in stabilising the business.
Revenues rose 7% to US$65mln, while pre-tax profits advanced 88% to US$7.5mln, reflecting the company’s tight control of its cost base. With US$9.2mln of cash the group is well funded.
First shipments from the Trojan nickel mine in Zimbabwe augmented output from Freda Rebecca the gold operation in the country.
The new mine plan for the former has had a significant and very positive impact on costs, Mwana revealed.
At the same time, work on its gold and copper exploration projects in the Democratic Republic of Congo continues with encouraging results.
Test work carried out on samples from Zani Kodo (gold) revealed higher than 90% gold extraction across all the recovery methods tested. Meanwhile at Katanga (copper), eight targets have been identified.
The latest update reveals a company transformed since raising US$6mln from investors, cutting its overheads and re-assessing the plans for the nickel operation.
Chief executive Kalaa Mpinga said: “The fall in gold and nickel prices earlier in the year resulted in a difficult period for Mwana.
“We reacted swiftly to the challenge, commencing a corporate cost cutting exercise and raising approximately $6mln to resolve the immediate working capital shortfall.
“Mwana is now stable and we are focused on delivering value from all of our projects.”
The shares rose 2% to 1.25p on the back of the figures, valuing Mwana at £17.5mln.
“These results are likely to be better than market expectations,” said the natural resources boutique SP Angel.
“The revised mine plan at Trojan has resulted in a significant drop in cash cost making the mine profitable even at current nickel prices.
“Production at Freda Rebecca is down from last year and should improve from here.
“The share price has scope for improvement from here with improving operations for their producing assets.”
– Proactive Investors