Mwana Africa’s Q1 gold output up 26pct, nickel plunges

Mwana Africa’s Q1 gold output up 26pct, nickel plunges

HARARE, August 25 (The Source) – Pan-African resources group Mwana Africa’s gold mine recorded a 26 percent rise in output to 16,985 ounces in the first quarter to June but nickel production fell 34 percent due to equipment upgrades and lower grade, the company said on Tuesday.

Output at Freda Rebecca mine in Bindura  increased from 13,443oz in the previous quarter to March after an 11 percent increase in the mill’s average feed grade. This helped counter the depressed bullion prices, which averaged $1,186/oz in the quarter. Spot gold prices sank to a five-year low last month, but has recovered around eight percent to average $1,085.50 for August.

The mine reduced cash costs by 25 percent in the quarter to $1,093/oz and also lowered operating costs by five percent to maintain a veneer of profitability.

Production of nickel at Trojan Mine — owned by Mwana’s locally listed subsidiary Bindura Nickel Corporation (BNC)– dropped by 34 percent to 1,349 tonnes compared to 2,032 tonnes in the previous quarter due to a reduction in average head grade and recoveries.

Prices fell 11 percent to $8,461 per tonne compared to $9,489 per tonne in the previous quarter.

Sales dropped 39 percent to 1,267 tonnes after selling 2,072 tonnes previously.

Cash costs rose 35 percent to $9,736 per tonnes from $7,209 per tonne as a result of lower production and refurbishment of equipment .

“At Bindura Nickel’s Trojan mine, operations continued to be hampered by the continued upgrading of equipment; upgrading that will ensure there are fewer interruptions in future,” said Yat Hoi Ning, Mwana’s executive chairman in a statement.

“Underground development work has proceeded more slowly than had been planned, but with the re-deep project now scheduled for completion in October 2015, the current financial year’s second half should see considerable operating improvements that will be followed by the benefits of the smelter restart.”

BNC is Africa’s only integrated nickel company with a mine, smelter and refinery. The smelter is undergoing refurbishment and is expected to be in operation in the first quarter of next year.