Mwana Africa bounces back with $50m profit

Freda Rebecca gold mine milled a record 1.06 million tonnes in the full-year to March as Mwana Africa returned to the black with a net profit of $50.6 million after a suffering a loss of $43,5 million in the prior year despite a drop in gold production.

The company’s return to profitability was driven by a $28 million reversal of impairment on its subsidiary, Bindura Nickel Corporation (BNC), which owns Trojan. Last year, BNC had an impairment charge of $43,7 million as the group suffered an annual loss of $43.5 million.

Attributable net profit for the year grew to $36.6 million, compared to a net loss of $28.6 million in the previous year.

Basic earnings per share improved to 2.89 cents after recording a loss per share of 2.62 cents last year.

While Freda Rebecca achieved record milling rate, production was affected by lower head grades and mechanical problems with the mills during the latter part of the financial year and gold production fell by 10.5 percent to 58,704 ounces from 65,350oz in the prior year.

Group revenue stood at $142,5 million, 30.5 percent up from $109,2 million last year while earnings before interest, tax, depreciation and amortisation (EBITDA) was up 40 percent to $25 million..

Operating costs were $45.7million, up from $15.9 million due to the restart of the Trojan mine.

BNC recorded nickel sales of 7,129 tonnes during the period under review while its  $26 million smelter will start producing nickel alloy by 2015, subject to funding.

Mwana chief executive, Kalaa Mpinga said despite some setbacks at the beginning of the year, the company had made substantial progress in the past financial year.

“Our principal success came with the resumption of sales of nickel in concentrates by BNC’s Trojan Nickel Mine in terms of an off-take agreement with Glencore,” he said.

Going forward, the company anticipates its financials to further improve in the new financial year and to advance the development of new projects. – The Source