Mwana Africa mulls restarting diamond mineComment on this story
Harare - Mwana Africa was studying the viability of restarting underground operations at the Klipspringer diamond mine in South Africa as it broadened its resource portfolio and expanded its gold and nickel operations in Zimbabwe, the company said yesterday.
The pan-African junior resources firm, which is listed on London’s AIM market, reported a 30.5 percent surge in revenue to $142.5 million (R1.5 billion) for the year to March from its Zimbabwean gold and nickel operations.
The company has now put its focus on restarting operations at the previously high-value Klipspringer diamond mine. Mwana Africa bought the mine in 2007 after SouthernEra Resources stopped operations in 2004.
Kalaa Mpinga, the chief executive of Mwana Africa, said that the company was now evaluating the restart of underground mining operations at Klipspringer, which was currently under care and maintenance.
“In South Africa, we are currently evaluating the viability of resuming underground mining at the Klipspringer diamond mine, as well as of the possibility of recovering small diamonds from the mine’s coarse-tailings residues,” Mpinga said.
He said “recovery of micro diamonds from residue slimes” during the past financial year had contributed financial resources to cover costs for the upkeep of the mine property and equipment.
An evaluation of the property currently under way was expected to help determine profitability prospects for resuming underground diamond mining.
Earnings before interest, tax, depreciation and amortisation in the group shot up 40.4 percent to $25m. Net profit for the period amounted to $50.6m “after a $28m reversal of impairment” on its Bindura Nickel unit in Zimbabwe.
This translated to basic earnings a share of 2.89 US cents for the period.
Gold recoveries from the flagship Freda Rebecca gold mine in Zimbabwe improved by 82 percent although gold sales for the quarter declined from 65 000 ounces to 58 000 ounces owing to a leach tank failure.
The mine is now exploring options to recover gold from dump tailings as part of a strategy to raise production at a lower cost.
“While the average all-in sustaining cash cost per ounce of gold of $1 186 remained comfortably below the average gold price for the entire year, by the fourth quarter all-in sustaining costs were close to the gold price, due to the operation not achieving its volume targets,” the firm said.
Its nickel smelter and mining operations in Zimbabwe are also slowly coming on board although further funding is still required for the full restart of the smelter.
About 7 129 tons of the base metal were sold during the year to March. Full nickel alloy production from the smelter operation was now expected next year, Mpinga said.
He added that nickel prices on global markets had improved in response to Indonesia’s decision to restrict exports of nickel in ore. However, there are fears over possible volatility in the near term although Mpinga said his company was anticipating stronger and stable nickel prices by 2017.
Bindura Nickel managing director Batirai Manhando said in May that the future of the company lay in the Hunters Road nickel project in Zimbabwe’s mineral-plush Midlands region.
Further exploration is, however, also being undertaken at the currently operating Trojan nickel mine to extend its life of mine and to determine the true extent of its resource base.
Mwana is one of the mining firms that have negotiated higher electricity tariffs with state power utility Zesa to ensure guaranteed power supplies.
Mwana’s Freda Rebecca gold mining unit is among the bullion producers in the country that are required to sell their production through the Reserve Bank of Zimbabwe.