AIM listed pan-African commodity company Mwana Africa Plc says gold production at cash cow Freda Rebecca would be affected in the short-term while gold recovery would suffer in the medium-term following a leach tank accident. The accident has forced the company to suspend plant processing operations as the company repairs the damage and puts measures to restore safety before it can resume operations at its Bindura based gold mining unit.
And the interruption would be a worrying issue for Mwana Africa considering Freda contributed 98 percent of the group's US$81,3 million annual revenue for 2012.
Mwana Africa said five employees were affected by the leach tank accident and were in a stable condition, but have been kept in hospital as a precautionary measure.
However, the London-listed resource firm said one of the employees suffered a fractured ankle.
"At approximately 0900 hours today (Tuesday), one of the leach tanks at the company's Freda Rebecca Gold Mine in Zimbabwe ruptured and collapsed onto a second neighbouring tank.
"This caused structural damage to the two tanks and a discharge of leach tank contents onto the ground surrounding the leach tanks beyond the bunded containment area," Mwana Africa said in a statement after the accident last Thursday.
The firm said it was treating the incident seriously as it regarded the health and safety of workers and the community where it operates as its highest priorities.
"It is expected that the incident will in the short-term affect production volumes and in the medium-term affect gold recovery.
Management is confident that production can recommence within five days," said Mwana Africa.
Freda Rebecca, having restarted operations in 2009, produced 47 770 ounces of gold in the 12 months to March 2012.
Mwana Africa said record quarterly gold production of 18 350oz was achieved in the third quarter of 2012.
The Freda Rebecca incident response team was immediately mobilised under the guidance and control of mine general manager Mr Toindepi Muganyi, after the accident.
The local community and Government agencies are co-operating in clean-up operations to repair the damage and safety before the resumption of operations.
The Mine Inspectorate and the Environmental Management Authority have been informed and permission has been received to commence site restoration.
Mwana Africa said a full assessment and investigation would be carried out and a further announcement will be made as more information becomes available.
Mwana Africa chief executive Mr Kalaa Mpinga commented:
"Our absolute priority is the health and safety of our employees at Freda Rebecca and that of local community members.
"We will put in place the appropriate measures to contain any impact on the affected area as soon as possible while investigating the cause of the collapse to prevent any future re-occurrence."
Mwana Africa holds 52,9 percent of Africa's only integrated nickel smelter and refinery Bindura Nickel Corporation and also holds the entire stake in Freda Rebecca.