Mwana Africa close to refinancing deal

AIM-listed pan-African miner Mwana Africa says it is close to a loan deal with potential financiers for the reopening of Bindura Nickel Corporation (BNC)’s discontinued operations, buoyed by SRK’s Competent Person’s Report on the restart of operations at Trojan.

The multi-commodity company also said gold production at Freda Rebecca was on a systematic ramp-up.

Mwana Africa said this at the end of its annual general meeting in London on Tuesday.

“The recent completion of the SRK Competent Person’s Report on the restart of operations at Trojan has enabled Mwana to advance discussions with financiers and off-takers,” the company said in a statement.

“Indicative terms have now been offered for the purchase of nickel concentrate and for the provision of loan funding for a significant proportion of restart and restructuring costs and for the purchase of nickel concentrate.

Negotiation of these offers is in progress.”
Mwana says it requires $100 million to reopen BNC’s Trojan Mine, Shangani Mine and Bindura Smelter and Refinery, which were put under care-and-maintenance in November 2008 as a result of the economic situation in Zimbabwe and a sharp decline in the price of nickel.

BNC is Zimbabwe’s sole primary producer of nickel.

In August, the miner disclosed to shareholders it would require close to $26 million to complete the Trojan project, the first to come back on stream according to the company’s schedule of projects.

The Trojan Nickel Mine is located at the BNC operations at Bindura in Mashonaland central province together with the smelter and refinery complex.

The Trojan project is said to have the potential to produce concentrate valued at around $64 million a year.

Extensive preparatory work at the mine, including the removal of waste rock and the repair and overhaul of the crushing plant and conveyors, has commenced.

BNC also plans to purchase nickel concentrate to fire its smelter and refinery.

In his address to shareholders at the AGM, Mwana Africa chairperson Oliver Baring said gold production at Freda Rebecca Mine had increased after the installation of new mining equipment in July.

The company is seeking $10 million from South Africa’s Industrial Development Corporation (IDC)
“Progress has been made on the completion of the conditions for drawdown of the IDC loan and we expect that we will shortly be able to announce that funds have been made available,” Baring said.

“Mill throughput for the three months to the end of August was 141 142t of ore, an average of approximately 47 000 ton per month, and close to the Phase 1 target of 50 000 tons per month. Mill availability has increased as a result of the implementation of planned maintenance procedures and with the appointment of key engineering personnel.”

He said gold recovery at Freda Rebecca reached about 80%, as the processing plant achieved steady state operating conditions and head grade increased.

The mining company sold 2 084 oz/m of gold between June and August, which was equivalent to an annualised production rate of about 25 000 oz.

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