Mwana close to finance deal on Zimbabwe mine

LONDON – Miner Mwana Africa Plc is close to a landmark deal to finance the second phase of its Freda Rebecca gold mine in Zimbabwe, which could set the stage for the revival of a nearby nickel operation, the firm’s chief executive said.

London-listed Mwana is holding discussions with development banks about a loan to allow output to double at Freda, which reopened this month, Kalaa Mpinga told Reuters.’I’m hoping that by the end of the month we have secured the loan. It would probably be the first time a development institution has actually lent money into Zimbabwe in a very long time for a project,’ he said in an interview late on Monday.’In terms of restoring confidence in the ability of Zimbabwe to operate as a normal place, this is going to be the test case.’AIM-listed Mwana reopened its Freda gold mine last month following improved economic conditions in Zimbabwe and the first commercial gold production was due this week, he said.Mwana had enough cash to pay for the initial phase of the restart of Freda, which will produce 30-35 000 ounces of gold per year, but a second stage costing around US$8 million would boost output to 70-80 000 ounces.Cash costs were expected to be about US$700 per ounce for the first phase and US$500-US$550 in the second. This compares to a current gold price of around US$1 050 per ounce.At its peak in 2002, the mine produced 100 000 ounces a year and that is the eventual target, which should be possible by finding higher grades and unlocking efficiencies, Mpinga added.BINDURA NICKELHe hopes a successful restart of Freda will give confidence to institutions to help fund the revival of a much bigger operation, the nearby Bindura nickel business.Bindura Nickel Corp – the only integrated nickel miner, smelter and refinery in Africa – shut down last November due to low nickel prices and operational problems.However, it is viable again with the rebound in prices and Zimbabwe’s coalition government that has dramatically improved conditions in the country, Mpinga said.A major revival of Bindura’s two mines, new mine project, smelter and refinery would cost around US$150 million, but it is more likely that it would be done in phases.The gradual approach would take three to four years and would likely kick off by restarting the Trojan mine and selling concentrate to be processed elsewhere. Mwana is already in talks with commercial banks about funding, but there are many options since Bindura is listed in Zimbabwe. Mwana owns 53 per cent of Bindura, the government has about 20 per cent and shareholders own the rest.Some equity funding was possible for Bindura while Mwana has received approaches from Chinese and Indian parties regarding possible offtake agreements, he said.Mpinga was also bullish about Mwana’s Zani-Kodo gold property in north-east Democratic Republic of Congo.It is sandwiched between two other rich deposits, one owned by Moto Goldmines, which was recently agreed to be acquired for C$546 million (US$528 million) by Randgold Resources and South Africa’s AngloGold. AngloGold owns a separate deposit nearby.Mwana’s objective is to establish a deposit of 1-1,5 million ounces of gold and start out with a mine producing 50-100 000 ounces per year. Due to his confidence in the deposit, Mpinga said he was already making preliminary plans for a mine. – Nampa-Reuters

In an age of information overload, Sunrise is The Namibian’s morning briefing, delivered at 6h00 from Monday to Friday. It offers a curated rundown of the most important stories from the past 24 hours – occasionally with a light, witty touch. It’s an essential way to stay informed. Subscribe and join our newsletter community.

The Namibian uses AI tools to assist with improved quality, accuracy and efficiency, while maintaining editorial oversight and journalistic integrity.