Mwana Africa is to re-open its Freda Rebecca gold mine in Zimbabwe later this year. The two phase redevelopment and expansion programme will see the mine ramp up from zero to between 40,000 and 50,000 ounces a year, and then to 80,000 ounces a year, in the next 12 to 18 months.
Established in 2003, Mwana Africa was the first African-owned and managed business in the mining sector to be listed on London’s AIM market. Its asset base is diverse, including gold, nickel, copper and other base metals, and more recently, diamonds. The company intends to pursue further mining opportunities across Africa, both independently and, where appropriate, in partnership with other stakeholders.
In April 2005, Mwana Africa purchased a 100% interest in the Freda Rebecca gold mine from AngloGold Ashanti for US$2.5 million, and agreed to sell a 15% stake to a local investor.
“Since acquiring the mine, we have invested over US$7 million in Freda Rebecca, including refurbishment of the mining fleet, drilling equipment, crushers, the mill circuit, leach tanks, and electrical and control systems,” CEO Kalaa Mpinga tells Mining Review Africa.
Low revenue receipts in Zimbabwe’s hyperinflationary environment led to Mwana Africa deciding in 2007 to place the mine, which is situated near Bindura some 90 km north-east of Harare, on care and maintenance. Now, the revised export procedures for gold announced in February have led to a number of mining companies, including Mwana Africa, planning to re-open their operations in Zimbabwe.
Under Zimbabwe’s new Short Term Emergency Recovery Programme, the government will no longer retain revenue from export sales. Gold producers can market their gold directly and retain 100% of the proceeds from gold sales in foreign currency. At the same time, this programme will review taxation and royalty structures to bring them in line with international standards.
“The re-opening of the Freda Rebecca mine involves bringing the first phase of the project back into production within four to six months,” Mpinga says. “Our target is to be back in production by September this year.” He goes on to explain that Mwana Africa has appointed geological, mining, and engineering consultants to assist in planning and evaluating a ramp up programme for the re-opening of the plant.
“E-PC (part of the Grinaker/LTA Group) has been handling all our required refurbishment in the past three years. It is completing the rehabilitation of the plant and the metallurgical circuit, and already has people on site,” Mpinga adds.
“Another South African mine contracting company called Maxem has been handling all the underground work, and has made great progress,” he continues. “We thought one of our biggest problems was going to be the dewatering of the mine, but that aspect is basically completed. In the next few weeks they will be taking out the accumulated mud, so the setting up and opening of the underground mine is progressing much more quickly than we had anticipated.
“Then we have a third contractor called Lynx Geosystems, which is responsible for the mine-planning and geology, and is currently completing the mine planning.
“We are looking at having to spend US$5 to US$6 million to complete phase one,” Mpinga says.
As regards phase two of the project, Mwana Africa and its consultants are still working on the specifics. “It is clear, however, that we will require about another US$4 to US$5 million to complete this phase, which will include the commissioning of another mill circuit,” Mpinga points out.
“As soon as we complete the first phase we will start working on the second mill, which should be completed relatively quickly. This will enable us to ramp production up to 80,000 ounces a year.
“What I’m not in a position to tell you is how long it will take to open up sufficient faces, and to do enough development to guarantee a steady state of 80,000 ounces a year. It’s going to be a gradual process. However, by the end of 2010 we will have reached the 80,000 mark; in fact it should be a lot sooner than that,” Mpinga predicts.
“You must bear in mind that way back in 2002 this mine produced almost 100,000 ounces a year. The point is that, having been effectively neglected for almost nine years, one does not know to what extent the underground set-up has been affected. By far the biggest problem is that we have lost the skilled work force,” he explains.
“We effectively have a work force of people who have not worked for a long time, and they have to be retrained and reconditioned. That’s the part that’s going to take time.”
Turning to technical and financial threats, Mpinga said the biggest single technical threat facing Freda Rebecca was the unreliability of power. “We are in discussion with the power authorities to have it connected to the same power system as our Bindura nickel mine – the two mines are close to one another, and it is not a technical problem to place both mines on the same power grid. The question is who will pay for it?”
On the financial front, Mwana Africa is in discussion with several banks on the provision of a back-up financial facility. “One must ensure a financial cushion in case unexpected problems arise,” Mpinga says. “We are talking to a number of people in South Africa and abroad, but I wish to emphasise that this is in no way a delaying factor to our plans.”
Mpinga makes it clear that Mwana Africa will be looking to further expansion of gold production in Zimbabwe in the medium- to long-term. “We have quite a number of promising claims around Freda Rebecca and, as soon as we have achieved stable production, we intend to start detailed exploration and analysis of some of those. We believe this future expansion will put us in a position to produce even more in due course,” Mpinga concludes.