London, 31 March 2008 — Mwana Africa (“Mwana”), the pan-African resource company, is pleased to announce that its sale of the February production from Klipspringer realised a value of $121/carat which represents a 46% increase over the average price in 2003 when the mine was last in production. To date in 2008 a total of 6057 carats have been sold including an 8 carat stone valued at $4000 / carat.
In addition, Mwana is pleased to announce the settlement of the outstanding tax liability arising from the South African diamond operations of SouthernEra.
Following the announcement in December 2007 that Klipspringer Mine was going to be brought back into production the early results in 2008 have been very encouraging. Along with the increase in diamond value there has been a significant improvement in the recovered grade in 2008. Since the recommencement of operations in January 2008 Klipspringer has treated 6302 tonnes of ore and recovered 4002.35 carats of diamonds, giving an average grade of 63.5 cpht. This compares with the grade prior to closure of 38cpht. The improvement in grade is a direct result of the re-engineering that has taken place at the operation. In late 2006 and throughout 2007 Klipspringer has been trial mining with the more conventional fissure mining method of underhand stoping which has replaced the long hole open stoping method employed previously. Although not as productive from a tonnage perspective the underhand method allows for good geological control which has minimised the dilution and resulted in the 68% improvement in the run of mine grade.
The revised mine plan was designed to ensure a sustainable operation in a strong rand environment (1$(US) = 6.80ZAR) and the mine is expected to produce 90,000cts per annum at full production which Mwana believes can be achieved by the end of Q1 2009 and capex is expected to be less than US$1m.
Mwana holds a 61% interest in the project and is responsible for management and operation of the mine.
Kalaa Mpinga, CEO of Mwana Africa, commented, “This is a small but important step in the strategy of Mwana to add diamond production to our multi commodity portfolio. Rough diamond prices are currently very strong and this augurs well for Klipspringer and our potential alluvial diamond operations in the Democratic Republic of Congo.”
Mr. Uwe Naeher, Professional Geologist and SouthernEra’s Western Exploration Manager, is the qualified person, under NI 43-101, responsible for the technical information in this release. Mr. Naeher has reviewed the contents of this release.
Kalaa Mpinga, Chief Executive Officer
Tel: 020 7654 5588
Mwana Africa plc
Tom Randell / Anca Spiridon
Tel: 020 7653 6620
Merlin
Mike Jones / Ryan Gaffney
Tel: 020 7050 6500
Canaccord Adams
Some statements contained in this news release are forward-looking and, therefore, involve uncertainties or risks that could cause actual results to differ materially. Such forward-looking statements include comments regarding exploration work. Actual results could differ materially from those anticipated. The Company disclaims any obligation to update forward-looking statements.
The Klipspringer Diamond Mine is located in South Africa and is a joint venture between Mwana (61%) and Naka Diamond Mining (Pty) Ltd (“Naka”) a Black Economic Empowerment company (39%).
The development of the Klipspringer Diamond Mine commenced in 2001 with the construction of a decline down to 7 level (160m) and it was in full production by February 2003. In December 2003 the joint venture partners, made a decision to temporarily suspend the mining operations at the Klipspringer Joint Venture. This was due to the strength of the South African Rand. The joint venture’s operating costs were in Rands, while the diamond revenue was denominated in US Dollars and this resulted in the operation being unprofitable.
During the third quarter of 2006 and throughout 2007 a trial mining and bulk sampling exercise was undertaken to try a new mining method and test market conditions. The mining method was changed to a more conventional underhand stoping method as opposed to the long hole open stoping method used in the initial mine design. The mine was re-engineered with the new mining method resulting in reduced tonnage along with a significant reduction in manpower and costs but designed to operate in a strong Rand environment. The trial mining programme was operated successfully and a decision was made to commence commercial production in December 2007.
The results of underground mining and development on the Leopard Fissure have shown that the kimberlite is continuous and consistent mineralogically to at least No.7 level. Due to improved grade control measures introduced during the trial mining phase, dilution from external sources was reduced and resulted in an improvement in the mining grade. These improvements are reflected in the updated resource statement dated 31 December 2007 tabled below.
| RESOURCE CATEGORY | Mining Tonnes | Mining Grade (cpht) | Block Carats |
|---|---|---|---|
| Indicated Resources | |||
| Ingwe Section | 450,000 | 58.3 | 262,000 |
| Ndau Section | 308,000 | 58.3 | 180,000 |
| Total | 758,000 | 58.3 | 442,000 |
| Inferred Resources | |||
| Ingwe Section | 1,306,000 | 58.3 | 762,000 |
| Ndau Section | 2,058,000 | 58.3 | 1,200,000 |
| Total | 3,364,000 | 58.3 | 1,962,000 |
At full production the mine plans to produce approximately 90 000 carats per annum. There will be a gradual increase in production during 2008 through to March 2009 when steady state production levels are envisaged. At these production rates the mine will have a life of approximately 5 years to a depth of 160m below surface (7 Level). The inferred resource below 7 Level to a depth of 500m below surface (15 Level) will provide for an additional 20 years of life. A number of alternatives to access the orebody between 7 and 15 level are currently being reviewed. The resource is open to depth below 15 level and a strategy to define additional resources will be investigated in due course.
| 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 |