adminat the height of Zimbabwe’s economic instability.
The mine resumed operations late last year after BNC successfully raised US$23 million for recapitalisation through a rights issue, share placement, staff rationalisation and a payment plan with creditors.
Mwana, however, requires additional funding for phase two of the restart of Trojan, but has struggled to raise the funds.
“The board of Mwana Africa today announces that, further to the update made on 24 June 2013, several funding options are being actively considered by the board and include, among others, an equity placing and funding at project level,” Mwana said in a statement.
Trojan is a unit under Bindura Nickel Corporation, a nickel mining company in which Mwana holds 76,5 percent stake. After rationalisation BNC’s head count now stands at about 1 000.
BNC had made significant progress last year towards the restart of its closed nickel mines, which include Shangani, but funding constraints are now affecting progress.
The Zimbabwe Stock Exchange-listed entity completed financial restructuring in September 2012 and was able to deliver its first nickel concentrate, since reopening, in April 2013. Mwana last week said BNC has not been able to raise the restart funding for Trojan Mine.
“BNC has been unable to raise additional funding through debt to finance phase two of the restart of Trojan Mine as had been anticipated at the time of the September 2012 rights offer and private placement by BNC.”
Mwana said the difficulties were attributable to the negative market sentiment associated with the falling global nickel prices, coupled with the challenging capital markets, and this has created a funding shortfall at BNC.
Additionally, Mwana said while Freda Rebecca remains cash generative, its cash contribution to the Mwana Africa Group in recent months has fallen in light of lower gold prices.
The Mwana board has therefore embarked on a significant cost-cutting exercise targeting annualised savings from budgeted corporate costs of around US$5 million, and is considering its strategic options in relation to its assets and projects including BNC and Zani Kodo inthe Democratic Republic of Comgo.
Operationally, Freda Rebecca continues to perform well and the pilot plant project to test the viability of treating its tailings dumps continues.
The pre-feasibility study that has commenced at Zani Kodo is planned to continue as was exploration of the Katanga copper licences in a joint venture partnership with Zhejiang Hailiang.
Mwana’s principal operations and exploration activities cover gold, nickel, copper and diamonds in three countries – Zimbabwe, the Democratic Republic of Congo and South Africa.
Online Reporter