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IDC funds Freda Rebecca mine

The Number One mill
at Mwana Africa’s Freda
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London, England — MININGREVIEW.COM — 05 November 2009 – African-focused mining exploration and development company Mwana Africa plc – the first African-owned and managed business in the mining sector to be listed on London’s AIM market – has announced that the Industrial Development Corporation (IDC) has approved the provision of up to US$10 million (R80 million) debt funding for its Freda Rebecca gold mine in Zimbabwe.

A statement issued here revealed that provision of the loan facility was expected to enable Mwana to accelerate the implementation of the mine’s refurbishment programme, which was planned to increase production to in excess of 50 000 ounces of gold per year on completion of Phase II.

It added that funding would be made available in two tranches.  The first tranche, up to US$4 million (R32 million), would be applied to fund the remaining working capital requirements of Phase I. The remainder of the funding would be applied to the capital expenditure and working capital requirements of Phase II.

The statement explained that the loan was repayable in 10 equal instalments over a five year period, and attracted interest at US$LIBOR plus 5%.

The funding is subject to loan documentation and fulfilment of certain customary conditions precedent including, but not limited to, the provision by the Export Credit Insurance Corporation of South Africa of political risk insurance, and the provision of a detailed environmental management plan for the mining operations.  

The availability of the second tranche of funding is conditional on independent verification of JORC/SAMREC-compliant measured gold resources, sufficient to support a ten year life of mine. Mwana Africa plc will provide a parent company guarantee covering the first tranche of funding until such time as the above conditions precedent are fulfilled.

Freda Rebecca has produced 1 081 ounces of gold in the past three weeks.

Mwana Africa CEO Kalaa Mpinga said: “We are delighted that the IDC is supporting our project, and we are hopeful that this will be a catalyst for further investment into the country.