26 July 2012

Zimbabwe: Good Times Roll for Freda

ONE of Zimbabwe's largest gold producers, Freda Rebecca Gold Mine, more than doubled its output in the quarter ended June 30. Freda Rebecca recently reported a 119 percent jump in gold production in the latest quarter, compared with the same period last year.

The gold miner produced 17 985 ounces of the yellow metal during the period under review - 26 percent higher compared with this year's first quarter.

Freda Rebecca, owned by regional mining conglomerate Mwana Africa, attributed the improved quarterly production to increased mill throughput, along with improved head grade and better recoveries.

Freda's recoveries rose to 82 percent in the latest quarter, compared with 72 percent in the previous quarter.

The company also noted a reduction in the cost of production to US$784 per ounce.

In the June quarter, Freda received an average of US$1 604 per ounce for the gold, compared with US$1 700 in the previous three months.

Mwana Africa chief executive Mr Kalaa Mpinga said: "These second quarter results demonstrate the production levels that can be achieved at our Freda Rebecca Gold Mine and we continue to strive for volume and efficiency improvements at the mine."

During the same period another key gold producer, New Dawn Mining Corporation, also recorded a significant upturn in production of the precious mineral.

New Dawn reported gold production of 9 536 ounces compared with gold production for the parallel quarter last year of 6 841 ounces, an increase of 39,4 percent.

The company's gold sales for the quarter totalled US$15,2 million at an average sales price per ounce of gold of US$1 608, as compared with US$9,8 million for the similar quarter last year, a 54,8 percent increase.

Toronto Stock Exchange-listed New Dawn's operations are all based in Zimbabwe.

It owns 100 percent of the Turk and Angelus Mine, the Old Nic Mine and the Camperdown Mine.

The company also owns approximately 85 percent of the Dalny Mine, the Golden Quarry Mine and the Venice Mine (which is currently not in operation), and a portfolio of prospective exploration acreage in Zimbabwe.

The country's gold sector has remained the lynchpin of the mining industry as evidenced by official first-half mineral revenue statistics which show that gold generated US$377 million in revenue -- a third of total mining revenue during the period.

New Dawn, Freda Rebecca, Blanket Mine and Metallon Gold are among the key gold producers.

Official statistics from the Chamber of Mines of Zimbabwe show that gold production rose 29 percent to 7,2 tonnes in the first six months of the year.

Meanwhile, Mwana Africa has said its Bindura Nickel Corporation (BNC) assets remained on care and maintenance for the June quarter to maintain their integrity. Mwana Africa owns 52,9 percent of BNC.

"BNC is now focused on recapitalisation, resolving legacy creditors and finalising a retrenchment programme such that the Trojan restart can commence," said Mr Mpinga.

A rights offer launched last month aimed at helping raise funds for BNC's restart is set to be concluded at the end of this month.

"The conclusion of the rights issue is conditional, inter alia, on the satisfactory resolution of a staff retrenchment programme and legacy creditor issues," Mwana Africa said.

"Notably, on 29 June 2012, BNC shareholders approved the various resolutions required to implement the recapitalisation and restructuring at BNC. Discussions with staff and creditors are ongoing," he added.

Finance Minister Tendai Biti last week announced in his Mid-Term Fiscal Policy Review Statement that the company had been awarded national project status.

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