REGIONAL mining group, Mwana Africa has brought in around US$3.2 million through a share subscription to provide working capital, the company confirmed this week.
The funds, given the firm's progress on cost cutting, should be enough to meet its working capital requirements for the "foreseeable future", the miner said.
Mwana Africa's Zimbabwe operations Bindura Nickel Corporation (BNC) and its feeder Trojan and Shangani mines as well as the Freda Rebecca gold mine. The company also has operations in Angola, Botswana, the DRC and South Africa.
The group's largest shareholder, China International Mining Group Corporation (CIMGC), took part, subscribing for around 42 million shares of the approximate total of 130.25mln and will now hold 23.07% of the firm.
Ning Yat Hoi, the chairman of CIMGC and a director of Mwana, also participated and will hold 6.85%.
In a statement, the group said: "As previously announced, given the fall in commodity prices in recent months, the company has urgently required further funding and the Board has been engaged in a process to secure that funding.
"As part of this process the board of the company has explored a number of funding alternatives and is pleased to have secured the Subscription proceeds at such an important time for the company.
"The board welcomes the support shown by its major shareholder and looks forward to benefitting further from association with CIMGC's banking and industry connections.
"The net proceeds from the Subscription will provide general working capital for the company, and, given progress made to date on cost cutting measures, is considered sufficient to meet Mwana's working capital requirements for the foreseeable future."
Mark Wellesley-Wood, Mwana's non-exec chairman, added: "I am delighted with the support shown by CIMGC and Mr Ning for the company. Our focus now is on dribing down costs and extracting maximum value for shareholders from our asset portfolio."
The pan-African mining company said its Freda Rebecca Gold Mine is currently cash flow generative, and Mwana will continue to seek efficiencies and explore tailings retreatment opportunities to further enhance value at the mine.
"Zani Kodo, Semhkat and Bindura Nickel Corporation ("BNC") will remain within the Mwana portfolio; any further development of these projects will be done through project level funding, either in the form of joint ventures and/or debt finance," the company said.
"As previously announced, in light of the new resources statement at the BNC Trojan mine, the Trojan mine plan has been revised to target the higher grade zones of the ore body, known as 'massives', which significantly improves BNC's cash flow and reduce its working capital requirements," the firm told investors in Thursday's statement.
A broker in London said: "The additional funding addresses short term financing concerns and the recently articulated cost cutting measures show a firm commitment from management in facing the company's current difficulties."