Mwana Africa FY profit plummets 86pct to $7mln

Mwana Africa FY profit plummets 86pct to $7mln

HARARE, July 29 (The Source) – AIM-listed Resources group Mwana Africa says its full-year profit plunged 86 percent to $7 million compared to the previous year on higher operating costs and falling gold and nickel prices, despite revenue growing by seven percent.

The group, which parted ways with founding chief executive Kalaa Mpinga and four non-executive directors in June, said net profit for the full-year to March 31 fell to $7 million from $50,6 million in the prior year — aided by a $28 million impairment reversal in the prior year — after a number of operational set-backs that contributed to higher unit costs.

Revenue increased by seven percent to $152,3 million from $142,5 million the year before while earnings before interest, taxes, depreciation, and amortization (EBITDA) fell to $18,8m compared to $25 million previously.

Gold sales at Freda Rebecca of 57,799 ounces were lower than the 58,704oz from last year and below the management’s expectations. Cash costs were higher at $1,067 per ounce from $959 per ounce last year  as lower grades led to greater mill tonnages.

Gold recoveries declined to 79 percent from 82 percent last year.

At Bindura Nickel Corporation, nickel in concentrate sales were higher at 7,352 tonnes from 7,129 tonnes last year.

All‐in sustaining costs were higher at $14,428 per tonne from $12,462 per tonne last year as equipment refurbishment added to costs and restricted mine tonnages.

“At the Freda Rebecca gold mine production stagnated as a result of equipment failures that needed to be addressed and improvements that were effected on an ad hoc basis,” the company said in a statement to announce the results. “These technical problems were paralleled at Bindura Nickel’s Trojan mine where a large part of the mine’s equipment had been allowed to deteriorate during the period of care and maintenance, and needed to be progressively refurbished and replaced throughout the year.”

Mwana Africa executive chairman Yat Hoi Ning said the group expects to receive the remaining $2,1 million from the $20 million bond raised last year to restart the BNC smelter by end of September this year.

He said $16,4 million was received by end of last year while BNC received a further $1,5 million early this month.

The smelter, which is expected to come online in the first quarter of next year, will have enough capacity to process BNC’s output with excess capacity being made available for regional producers.

Going forward, Ning said in view of current trading volumes and lower commodity price, profits for the first half next year will be lower than the second half of 2015.

At Trojan Mine, the company has completed refurbishing and replacing the equipment that had deteriorated while the mine was on care‐and‐maintenance.

“Mining will now be positioned to extract ore from the “massives” ore bodies where grades are higher than in those bodies that provided the bulk of the mine’s ore until recently,” said Ning.