Bindura Nickel Set to Resume Operations

HARARE, July 6 -- PAN-AFRICAN resources company Mwana Africa says it will this year resume operations at Trojan Nickel Mine and the concentrator at Bindura Nickel Corporation.

Group chief executive Mr Ka-laa Mpinga said SRK Consulting is preparing a report on the restart plans and the group is evaluating strategic and financing options for the project.

"We have advanced plans for the resumption of operations at the Trojan Nickel Mine and concentrator, including proposed off-take terms," said Mr Mpinga.

The only integrated nickel mine, smelter and refinery complex in Southern Africa, BNC has the potential to become a processing centre for materials produced throughout the region.

"Our plans to restart mining at Trojan and the production and sale of 7 000 tonnes of nickel per year in concentrate are at an advanced stage," added Mwana chairperson, Mr Oliver Baring.

Mr Mpinga commented that the company remained confident that BNC would be brought back into successful production, and would return to being an important contributor to the group and to the country's economy.

Turning to Freda Rebecca gold mine, the group said the mine returned to commercial production in October 2009, in time to benefit from a record high gold price and 8 550 ounces of gold were produced in the six months to March 31, 2010 and a further 3 447 ounces have been produced.

In March 2009, Mwana announced that it would undertake a two-phase refurbishment programme at the mine.

"We now look forward to a return to production in line with the planned 30 000 ounces a year of gold from phase one.

"In addition, Mwana would use the US$10 million facility approved by South Africa's Industrial Development Corporation to implement the second phase of the mine's refurbishment programme, which was planned to increase output to about 50 000 ounces of gold a year."

Despite BNC remaining on care and maintenance throughout the year, and production from Freda Rebecca commencing only in the second half of the year, the group's principal operations generated revenues of 18,8 million pounds.

At BNC, sales of in-process materials were concluded as part of the company's strategy to realise cash from existing working capital positions while the care and maintenance programme continues.

The Freda Rebecca gold mine generated revenue of 6 million pounds.

Group loss for the year before tax was 14,4 million and net cash outflow during the year from the group was 3,7 million pounds.

Commenting on the new indigenisation regulations, Mwana Africa said in the past it had taken steps towards indigenous economic empowerment at its BNC and Freda Rebecca mine.

These include BNC's listing on the Zimbabwe Stock Exchange and Mwana's commitment to sell 15 percent stake in Freda Rebecca to a local partner.

The Government is seeking to make foreign companies with a market capitalisation of over US$500 000 to dispose of at least 51 percent of their shares to indigenous Zimbabweans.

Mr Mpinga said mining was unique in the scale of its need for capital investment, and its potential to contribute significantly to the country's economic recovery.

"We are confident that, across the country, solutions will be found that balance both the need to attract investment to Zimbabwe and the responsibility of the mining industry to support the economic development of the whole country," he said.

Mwana also operates in South Africa, Botswana, Ghana, Angola and the Democratic Republic of Congo.

The company's placing of 88.3 million shares in March 2010 raised approximately 8,4 million pounds after expenses.