PAN-AFRICAN mining development company Mwana Africa Limited’s after-tax profit went up by 88% to $7,5 million in the six months ending September despite the drop in nickel prices during the period under review.
Report by Victoria Mtomba
Revenue for the group was up 7% to $65 million from $60,7 million during the period under review while cash balance stood at $9,2 million.
In a statement accompanying the group’s six-month unaudited results, the group said it was a difficult period as the company had to react to the falling nickel and gold prices.
“To illustrate this, the average gold price achieved by Freda Rebecca Mine for the six months period to September 2012 was $1 642 per ounce compared to $1 352 per ounce for this six months period. Nickel prices also fell with Bindura Nickel Corporation (BNC) achieving an average nickel price of $14 268 per tonne for the six months to September 2013, compared to the highs of $18 000 per tonne in January 2013,” the group said.
In response to the lower commodity prices on the international market, the group adopted cost-cutting exercises and suspended exploration drilling at Zani Kodo in the Democratic Republic of Congo.
“Mwana also concluded a share subscription and placing in September 2013, raising approximately $6 million of funding which stabilised the company financially.
“Despite the fall in the gold price and resultant fall in revenue at Freda Rebecca, group revenues increased by 7% for this period compared to September 2012 because the Trojan nickel mine commenced sales in April 2013, contributing significantly to group revenue,” the company said.
In April this year, BNC sold its first nickel concentrate since the restart of the Trojan nickel mine.
This first shipment of concentrate marked a major milestone in the restoration of the company’s nickel assets, following a four-year period of care and maintenance.