Southern Africa/Central Africa – Pan-African multi-commodity mining group, Mwana Africa, has increased gold production from its Freda Rebecca mine in Zimbabwe to 16 985 oz of gold in the first quarter of the 2016 financial year ended 30 June 2015.
This is an increase from 13 443 oz of gold produced in the fourth quarter of the 2015 financial year and was mainly attributable to an 11% increase in the mill’s average feed grade from 1.81g/t in the fourth quarter of the 2015 financial year to 2.03g/t
Despite this, the tons milled decreased by 0.3% to 293 759 t on the prior quarter, mainly due to a 1% decrease in mill running time.
The average gold price received was 3% lower at US$1 186/oz compared to $1 223/oz in the previous quarter – its lowest in several quarters, says Mwana Africa executive chairman Yat Hoi Ning, adding that the company was able to counter the adverse effect by producing more gold and reducing its operating costs which, in turn, contributed to a significantly lower cash cost of US$930/oz and an all-in sustaining cost of $1 093/oz, which was 24% lower than in the fourth quarter of the 2015 financial year.
“This means the mine remains operationally profitable and will be maintained in that state,” Ning noted.
Meanwhile, production of nickel concentrate at the company’s Trojan Nickel Mine, also in Zimbabwe, dropped by 34% to 1 349t compared with 2 032t in the previous quarter, primarily due to a reduction in average head grade and recoveries.
Head grade was 26% lower at 1.2% compared with 1.67% in the prior quarter due lower production of massive ores areas compared to the previous quarter
The average net realised nickel in concentrate price dropped by 11% to $8 461/t compared with $9 489/t in the fourth quarter of the 2015 financial year, while Nickel sales were 39% lower at 1 267t compared with 2 072t in the previous quarter, due to lower production.
Actual cash costs of nickel in concentrate rose 29% to $8 901/t from $6 926/t in the prior quarter, and actual all-in-sustaining costs of nickel in concentrate rose by 35% to $9,736/t in the quarter under review from $7 209/t in the previous year, as a result of lower production and refurbishment of equipment.
Ning said operations at the Trojan mine continued to be hampered by the continued upgrading of equipment.
“Underground development work at Trojan has proceeded more slowly than had been planned, but with the redeep project now scheduled for completion in October 2015, the current financial year’s second half should see considerable operating improvements that will be followed by the benefits of the smelter restart.”
Work on the restart is proceeding on schedule and, when completed, will result in our receiving enhanced prices for the nickel contained in our products.
In South Africa, throughput of Marsfontein fine residue tailings at Mwana Africa’s Klipspringer diamond mine fell to 38 760 t – 10% lower than in the previous quarter.
While head grade improved by 8% to 44 cpht as mining continued through a transition zone so as to access higher grade material.
Diamond sales fell by 45% quarter-on-quarter, while the price received for fine diamonds produced by the mine fell by 7% quarter-on-quarter, which was in line with market conditions, which are expected to remain constrained.
“Revenues at Klipspringer were affected by the lower diamond prices that have been affecting all diamond producers. The processing plant, which recovers gems from old slimes tailings, suffered temporary technical problems which lowered production, but this is expected to be resolved in the current quarter,” said Ning.
Meanwhile, in line with the company’s determination to limit expenditure, prospecting work with its partners in the DRC has been contained at the Zani-Kodo and Semhkat/Hailiang joint venture projects.
“It has been restricted largely to field work designed to locate further exploration targets and to improve our knowledge of those already delineated.
Overall costs were tightly controlled in the quarter under review, and this will continue well into the future. It is far from clear when commodity prices will improve from their currently depressed levels, but our operations remain cash-flow positive and our capital programmes will remain on track.