Freda mine draws loan to ramp up gold production

gold_mine_zimbabweHARARE - Freda Rebecca Gold Mine Limited, the Zimbabwean subsidiary of Mwana Africa PLC, has drawn down the first $4million tranche of the $10million expansion loan it secured from the Industrial Development Corporation of South Africa in 2009, according to a statement this week.

Mwana Africa said the drawdown of the second tranche of $6 million is conditional on further conditions precedent being met. The facility would be repaid in 10 equal instalments over a five-year period and attracts an interest rate of US$LIBOR plus 5 percent.

A production rate of some 30 000 ounces of gold per annum was achieved at Freda Rebecca. For the six-month period from August 2010, production averaged 2,569 ounces of gold per month. Phase 2 expansion to a production rate of 50,000 ounces per annum is underway, said the statement.

“We are delighted with IDC’s support for Freda Rebecca. This loan marks a significant development for project finance into Zimbabwe. The production ramp-up at Freda Rebecca continues to progress and our expansion to 50 000 ounces per annum is well advanced.” said Kalaa Mpinga, Chief Executive Officer for the London Stock Exchange-listed Mwana Africa.

Mwana Africa this week also revealed that the Zimbabwe Stock Exchange-listed Bindura Nickel Corporation (BNC), in which Mwana has a 52.9 percent stake, entered into an off-take agreement with Glencore International AG (Glencore).

The Glencore agreement would cover all the nickel concentrate to be produced, following the resumption of operations at Trojan Mine. The required regulatory approvals in Zimbabwe have been received for the off-take agreement.

BNC expects to resume mining at Trojan, initially at a rate of 10 000tpm ramping up to 70,000tpm over a period of a year, after which it would increase production to about 870,000 tonnes of ore per annum. After processing, BNC expects to produce concentrate containing 7000 tonnes nickel per year.

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