The Board of Mwana Africa PLC (“Mwana”, the “Group” or the “Company”), the pan-African resource company, announces its unaudited interim financial results for the six months to 30th September 2008.
The Board of Mwana has responded to the recent difficult and uncertain market conditions with a revised strategy, which was announced on 22nd October 2008. The Board continues to believe that in current market conditions, Mwana’s priorities should be to seek to conserve, as far as is reasonable, its existing cash balances by scaling back its exploration activities, and to preserve the integrity of BNC, its principal operating asset.
Since the announcement of the revised strategy, Mwana has performed a review of its operations, and has taken action to cut its expenditure on exploration. Drilling activities at SEMHKAT, Mwana’s base metals exploration concession, and at the Zani-Kodo gold prospect in the DRC have been curtailed. Mwana is proceeding with a Preliminary Feasibility Study, expected to be completed within the next six months, for the Kibolwe copper prospect, and intends to conclude calculation and classification of resources for the Kodo Main and Kodo North gold prospects. Following notification from BHP Billiton of their withdrawal and proposed termination of diamond exploration joint venture and framework agreements, the Company is considering all options, including closure of all kimberlite exploration in the DRC. Kimberlite exploration in South Africa and the DRC, and development work on Mwana’s alluvial prospects will be curtailed.
On 26th November, BNC announced that it would place the Trojan and Shangani mines on care and maintenance, in order to preserve cash. The smelter and refinery operations will be placed on care and maintenance once stocks have been depleted. Mwana is working with the Board of BNC in its efforts to retain and maintain critical infrastructure and skills, and to mitigate the impact of these actions on BNC’s employees, suppliers, and the communities in which BNC operates. BNC is also, with Mwana’s support, investigating the potential for the smelter and refinery operations to resume production using third party feedstock, under existing and additional toll contracts.
The Board believes that Mwana’s current cash position (excluding cash held by BNC, which is not readily accessible to the group) gives the group the flexibility necessary to develop and pursue different strategic options appropriate to prevailing and prospective market conditions, including the ability to maintain the critical infrastructure of existing nickel and gold operations in Zimbabwe, and to retain the rights to its base and precious metal exploration prospects in the DRC.
Commenting on the results Kalaa Mpinga, Chief Executive Officer, said:
“In view of recent market uncertainty and declines in commodity prices, we have taken decisive and prompt action to implement a revised strategy to conserve cash and to preserve the integrity of our portfolio of assets, in particular BNC. We are especially mindful of the harsh environment faced by our colleagues in Zimbabwe; the decision to move to care and maintenance at BNC has not been taken lightly.
Despite current weakness in commodity markets, the outstanding resource potential of Africa remains undiminished. Our focus is to ensure that Mwana is in the best possible shape to capitalise on these opportunities once more favourable conditions return.”
Oliver Baring, Executive Chairman
Tel: 020 7654 5588
Tom Randell / Anca Spiridon
Tel: 020 7653 6620
Ryan Gaffney / Mike Jones
Tel: 020 7050 6500
References to dollars or “$” refer to US dollars unless otherwise stated.
This press release includes ‘forward-looking statements’. Words such as ‘anticipates’, ‘expects’, ‘intends’, ‘plans’, ‘forecasts’, ‘projects’, ‘budgets’, ‘believes’, ‘seeks’, ‘estimates’, ‘could’, ‘might’, ‘should’ and similar expressions identify forward-looking statements. All statements other than statements of historical facts included in this press release, including, without limitation, those regarding Mwana Africa’s business strategy and plans and objectives of management for future operations and acquisition opportunities, are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors which could cause the actual results, performance or achievements of Mwana Africa or the markets and economies in which Mwana Africa operates to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements, including, without limitation, political, regulatory and economic factors. Factors that would cause actual results or events to differ from current expectations include, among other things, political and regulatory risks and the other risks involved in the mineral exploration industry. Mwana Africa believes that the assumptions inherent in the forward-looking statements are reasonable; however, forward looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein. Mwana Africa does not assume any responsibility to update any of such forward-looking statements, save as required by relevant law or regulatory authority.
| Share code: | MWA |
| Market: | AIM |
| Listing date: | 26 Oct 2005 |
| Index: | FTSE AIM All-Share Index |
| Sector: | Basic Resources; |
| Sub‑sector: | Gold Mining |
| Country of register: | Great Britain |
| Segment: | AMSM |