9th Jul 2014 10:09
LONDON (Alliance News) - Mwana Africa PLC Wednesday said it swung to a pretax profit in its last financial year as revenues jumped, expenses fell and it booked a major impairment reversal after the nickel price rose and it restarted a nickel mine.
The pan-African, multi-commodity mining and development company posted a pretax profit of USD43.9 million for the twelve months ended March 31, from a pretax loss of USD32.1 million the previous year.
The company said its revenue increased 30% to USD142.5 million, from USD109.2 million, as lower production from its Freda Rebecca gold mine was offset by the resumption of sales of nickel concentrates from a subsidiary's Trojan nickel mine and strong nickel prices which boosted cash flow.
Mwana said that its care and maintenance expenses fell to USD1.9 million, from USD13.0 million the previous year as the Trojan mine was restarted after being under care and maintenance for four years. It also booked USD28.0 million in an asset impairment reversal after the improved nickel price and cashflow allowed it to reverse impairments booked on its nickel assets the previous year.
Mwana said it is contemplating the viability of resuming underground mining at its Klipspringer diamond mine. Recovery of micro diamonds from residue slimes at the site during the year contributed to covering the site's care and maintenance costs, it said.
The company is currently moving towards restarting a smelter at its subsidiary Bindura Nickel Corp's operations with the idea of starting production of nickel alloy in the first quarter of 2015.
"Not only will this take the company up the value chain as better prices will more than offset the smelter's operating costs, but we will have the benefit of the significantly lower cost of transporting nickel metal rather than concentrate to our export harbour," Chief Executive Officer Kalaa Mpinga said in a statement.
Mwana Africa shares were up 9.2% to 2.54 pence, putting it in the top ten AIM All-Share risers on Wednesday.
By Tom McIvor; [email protected]; @TomMcIvor1
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