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Oliver Kazunga Business Reporter
PAN African resource firm Mwana Africa is considering several options to raise additional funding to finance the second phase of the restart of Trojan Mine, the company announced yesterday. Last month, the group, which owns 52 percent in listed Bindura Nickel Corporation (BNC), announced that the nickel mine had failed by the beginning of the second half to raise additional funding to support the restart of Trojan Nickel Mine under phase II.
The failure was attributed to the difficulties driven by negative market sentiment on the back of falling nickel price, coupled with capital markets, and this created a funding shortfall at BNC.
Mwana Africa in September 2012 anticipated that the financing of the restart of Trojan Mine would come through debt.
“The board of Mwana today announces that…, several funding options are being actively considered by the board and include, amongst others, an equity placing and funding at project level,” said the company in a statement.
In September last year, BNC carried out a restructuring and recapitalisation involving $23 million being invested into BNC which has allowed it to restart Trojan Mine.
Resumption of operations at Trojan followed four years during which all of the BNC assets were on care and maintenance.
Meanwhile, the group has reported that although Freda Rebecca Gold Mine which is owned by BNC remains cash generative, its cash contribution to the group in recent months has fallen in light of lower gold prices.
Mwana has thus embarked on a significant cost cutting exercise targeting annualised savings from budgeted corporate costs of about $5 million.
The multi-commodity and mining development company is considering strategic options in relation to its assets and projects including BNC and Zani Kodo in the Democratic Republic of Congo.
Freda Rebecca continues to perform well and the pilot plant project to test the viability of treating the mine’s tailings dumps was continuing.
In the 12 months to March 2013, Freda Rebecca has produced 65 350 ounces of gold.
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