Investors avoid Mwana Africa gamble

Mwana Africa, the miner run by Oliver Baring, lost a third of its value after it said that it was gambling its dwindling cash pile on reopening a mothballed gold mine in Zimbabwe.

The company said that the restart of the Freda Rebecca mine, planned for September, could significantly erode the forecast cash position if there were delays or if the gold price falls, which casts significant doubt over whether it could continue as a going concern.

Mr Baring believes that Zimbabwes economy shows signs of improving after the power-sharing deal with President Mugabe.

Mwana, down 2.68p at 5.32p, has only 14 million cash left from two successive share issues, having consumed 20 million during the year. It has also mothballed a Zimbabwean nickel mine that ran into production problems and the company is examining whether it can reopen the mine using lower-cost production techniques.

The Times(UK)

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