Mwana Africa says gold, nickel output down

Spread This News

GOLD output at Mwana Africa’s Freda Rebecca dropped by 14 percent in the third quarter to 31 December despite greater mill throughput low while nickel production also fell 30 percent over the same period.
Output for the quarter was 14,298 ounces from 16,555oz in the second quarter while gold recovery rate also slipped to 78 percent from 80 percent in the prior quarter, as the group focussed on accumulated ore stockpiles from the two previous quarters.
All-in sustaining costs rose by 23 percent to $1,304 per ounce on a quarterly basis. Royalties for the quarter fell 37 percent after government lowered the rates, coupled with lower gold production.
“However, the benefit was countered by an increase in operating costs mainly due to mill shell realignments and clutch replacement costs being realised,” Mwana Africa said.
Nickel in concentrate production dropped by 30 percent to 1,383 tonnes from 1,989t due to fewer tonnes of ore milled, a lower head grade and reduced recoveries. The company also attributed the lower production to ongoing refurbishment.
Sales also dropped by 31 percent quarter-on-quarter, from 2,008 tonnes to 1,395 tonnes as a result of lower production volumes.
The low nickel production also increased the cash costs and all-in sustaining costs by 17 percent.
However, the company said the costs are expected to fall in the fourth quarter at the conclusion of the refurbishment.
Chief executive, Kalaa Mpinga said the quarter was ‘challenging’ but remained confident of Mwana’s growth prospects.
“The nickel price decreased by 15% during the December quarter to US$15,867/t (Q2 2015; US$18,592/t). Although gold’s price fell to an average of US$1,195/oz in the December quarter, the gold price has somewhat recovered in the first month of calendar 2015 and I remain confident in both metals’ longer-term future,” he said.
“At Trojan, the refurbishment programme continued. This, in turn, led to slower development rates than earlier envisaged, affecting access to the massives and their higher grades.
“With most of the equipment now onsite, the availability issue will be addressed in the next quarter whilst also having a positive impact on costs.”
Mwana Africa also said work on the smelter re-start was ongoing with the delivery of the furnace bricks the expected during fourth quarter of the year.Advertisement

Most key members of the project team were now in place while work on various components of the smelter were ongoing.
Bindura commenced marketing of a $20 million bond in December with a 5-year term and 10 percent semi-annual coupon rate.
The group, which has operations in South Africa and the Democratic Republic of Congo, had a cash balance of $5.5 million as December 31.