Audited Results for the year to 31 March 2011

26 July 2011

Mwana Africa PLC

("Mwana", the "Group" or the "Company")

Audited results for the year to 31 March 2011

Mwana Africa PLC is pleased to announce its audited financial results for the year to 31 March 2011.

Financial Highlights

·; Group revenues up £8.5m to £27.3m (2010: £18.8m), of which Freda Rebecca contributed £23.4m (2010: £6.0m)

·; Reduced loss for the Group of £7.2m (2010: £14.4m)

·; Reduced loss attributable to Mwana Africa shareholders of £2.1m (2010: £14.5m loss)

·; Impairment reversal of £11.7m at Freda Rebecca due to the successful restart and production ramp up

·; Exploration spend: £7.7m (2010: £4.0m)

·; Share placement of 46.4m shares in November 2010 raised approximately £4.8m net of expenses

·; Drawdown of $4m by Freda Rebecca under its IDC facility in February 2011

Operational highlights

·; Freda Rebecca production:

o 27,240 ounces of gold in the year to March 2011 (2010: 8,550 ounces-six months production)

·; Increased gold resource at Zani-Kodo announced in July 2010:

o the Indicated Mineral Resource increased to 256koz and the Inferred Mineral Resource increased to 998koz, based on a cut-off grade of 1.0g/t gold;

·; Detailed plans for the resumption of operations at the Bindura Nickel Corporation ("BNC") Trojan mine

o Completion of SRK independent Competent Person's Report reviewing these plans

o BNC off-take agreement with Glencore International for the purchase of the concentrate produced by Trojan

Highlights after the reporting period

·; Increased gold resources at Freda Rebecca announced in April 2011

o the Indicated Mineral Resource increased to 1.67m ounces and Inferred Mineral Resource increased to 0.64m ounces, based on a cut-off grade of 1.5g/t gold

·; £9.27 million gross fundraising completed in May 2011

Commenting on the results Kalaa Mpinga, Chief Executive Officer, said:

"During the last twelve months our team has worked hard to increase cash flow from our producing assets, whilst continuing the exploration programme at our promising gold and base metals assets in the DRC. Our strengthened balance sheet, also following two successful fundraisings, exciting drilling results at Zani Kodo and Semhkat and strong ramp-up in production at the Freda Rebecca Mine have created a strong basis on which to grow during the year ahead. With restart plans progressing at BNC, we look forward to delivering further value from our assets over the next twelve months."

For more information, please visit www.mwanaafrica.com or contact:

Enquiries:

Mwana Africa PLC Tel: +44 (0)20 7654 5580

Oliver Baring - Executive Chairman

Nominated Adviser and Broker

Ambrian Partners Limited Tel: +44 (0) 20 7634 4700

Anthony Rowland / Jen Boorer

Joint Broker

XCAP Securities plc

Jon Belliss / John Grant / Parimal Kumar Tel: +44 (0)20 7101 7070

Public Relations

Merlin Tel: +44 (0)20 7726 8400

David Simonson

Anca Spiridon

Chairman's Letter

Dear shareholder

Looking back on the past year, it has been one of contrast. We have seen notable success in the continued ramp up of the Freda Rebecca Mine in Zimbabwe which is now a significant producer of gold and a valuable contributor to cashflow, while uncertainty over the outcome of indigenisation proposals by the Government of Zimbabwe have made it challenging to secure the necessary finance for the restart of Bindura.

Metal prices remain strong, with gold in particular continuing to respond positively to quantitative easing in many of the world's major economies, while the China and India growth story continues to confirm the commodity super cycle.

In April we announced a 60% increase in the gold resource at Freda Rebecca. The indicated resource of 1.7m ounces demonstrates that the mine has a mine life of at least twenty years even at increased production rates. In addition to our on-going drive to increase production and lower costs, the life of mine expansion adds to Freda Rebecca's strong potential for the future.

Another notable success at Freda Rebecca has been the securing of debt finance for the project. In February we announced the drawdown of US$4 million of the loan facility provided by the IDC (Industrial Development Corporation of South Africa). This was a ground breaking transaction, being one of the very first loans by an external lender into Zimbabwe for many years and I would like to express my gratitude to the IDC for their continued support.

We believe that Freda Rebecca is a success at all levels and demonstrates Mwana's ability to finance and restart operations in Zimbabwe. We will now apply that experience to the restart of operations at Bindura.

Bindura remains on care and maintenance pending the raising of restart finance. The core operational team at the site has been kept in place and the assets have been well maintained. Securing financing for Bindura remains a challenge in the current political climate and with uncertainty prevailing over the Zimbabwe government's indigenisation proposals. Nevertheless we are progressing negotiations for loan finance and for the restructuring of creditor and workforce liabilities which I believe will put us in a better position to restart operations.

In the DRC we have made significant progress at our Zani-Kodo gold project in Ituri, where we have identified a JORC compliant combined, indicated and inferred resource of 1.25m ounces and hope to announce a further increase in resources shortly. While pursuing our strategy of attracting joint venture partners such as the agreement we have in place with Anglo American on the North West Block, the exploration programme has been successful in identifying new drill targets for copper and zinc at Semhkat.

With the ongoing cost of care and maintenance at BNC and our commitment to grow our gold resource at Zani-Kodo and base metal exploration in Katanga, it was considered prudent to raise £4.8 million net in October 2010. In March 2011 we embarked on a fund raising to enable the restart of the Trojan Mine. Our presentation to a wide group of international investors was well received and it became clear that more than sufficient demand would be achieved to meet our target. Within a few days of the proposed closing the Zimbabwean Government issued regulations on indigenization which resulted in investors withdrawing their support for the fundraising. It is a sobering thought that as a result of this event we were unable to restart Bindura's Trojan Mine, with the resultant ongoing uncertainties for our 2,170 employees, their dependants and of course our shareholders. As a result, in May 2011 we raised £8.8 m to ensure the company is properly funded through 2011/12. Further initiatives are now under consideration to facilitate the restart.

We are disappointed by the performance of the share price at a time of strong cash flow performance from the Freda Rebecca Mine. As previously mentioned, we believe this stems from the current uncertainties in Zimbabwe.

We have complete confidence that these difficulties can and will be resolved. I would like to take this opportunity to thank our management, operational and exploration teams for their heroic contribution and express our gratitude to our shareholders for their ongoing support and confidence in the company.

Chief Executive's Review

Over the last twelve months, we have continued to focus on increasing cash flow from our producing assets whilst further developing our exciting exploration projects. The year has not been without its challenges, but with production growing at Freda Rebecca, strong drilling results from Zani-Kodo and a strengthened balance sheet, we have built a solid basis for our next phase of growth.

The ramp up in production continued successfully at the Freda Rebecca Mine, in parallel with a 60% increase in indicated gold resources, significantly extending the expected life of the mine. Phase I of the restart was successfully completed, with the annualised production rate of 30,000ozs reached by February 2011. Since then, the mine reached an annualised run rate of 35,000ozs in May and is showing strong progress towards its 50,000ozs pa Phase II production target. Freda Rebecca produced a total of 27,240ozs of gold during the period, contributing £14.4m to Group profits and generating £0.3m of cash inflows.

We are confident that Freda Rebecca will continue to be a strong contributor to our cash flow, as we continue the successful ramp up towards the Phase II production target in parallel with increasing the efficiency of our production process and reducing our cash costs; this involves the refurbishment of the second parallel mill and the expansion of the rock moving fleet. As reported in June, this mill has been successfully commissioned and has contributed as planned to the Phase II tonnage ramp up at Freda Rebecca. The mine is now handling ore at the rate of 2,350tpd up from 1,800tpd, with a targeted Phase II throughput of 2,700tpd, which we expect to reach in September. The nature of the ore body at Freda Rebecca is such that mine economics benefit hugely from increased mined volumes and our aim now is to expand production which will not only increase ounces produced but also lower cash operating costs per ounce.

Further limited exploration drilling is being carried out within the mining permit with the aim of expanding the resource inventory of near-surface material. We believe that there is considerable potential to add near-surface resources which could be blended in to the ore processing stream to increase production and lower costs.

We have detailed plans in place for the restart of operations at BNC. We have also refurbished substantial parts of the mine and processing equipment at Trojan in preparation for the restart. The restart plans involve the production of 7,000 tpa of Nickel in concentrate annually and we have agreed off-take terms with Glencore International to purchase all of this output. The technical and economic viability of the project has been verified by SRK Consulting in a Competent Person's Report. Negotiations to secure financing for the restart are on-going, together with a restructuring designed to streamline creditor and workforce liability at the asset. Whilst this task has been made difficult by uncertainties in the Zimbabwe mining industry regarding government indigenisation legislation, we remain committed to securing the restart of this unique asset in the Southern African region. Meanwhile, our care and maintenance programme and continuing refurbishment of the mine and equipment are maintaining the integrity of the operations and will ensure a quick and efficient restart process.

Whilst there remain a number of challenges for Zimbabwe, not least of which are the concerns regarding indigenization of foreign companies which continues to constrain inward investment flows, there are a number of positives in the Zimbabwe economy which are often overlooked. Annual inflation continues its downward trend, falling to 2.7% in March 2011, compared with the hyper inflationary years in the not too distant past, these low inflation figures have brought with them the stability required for businesses to operate normally. The agricultural sector is poised to grow by 19.3% in 2011 compared to 33.9% in 2010 and 14.9% in 2009. Buoyed by favourable international prices and a stable operating environment, production of most minerals in Zimbabwe continued to show an upward trend, gold, for example, is expected to increase from a total of 9 tonnes produced in 2010 to a forecasted 12.5 tonnes in 2011. These performances in the agricultural and mining sectors not only create employment, but also generate substantial foreign currency inflows into Zimbabwe as well as tax revenues for the country.

The strong potential of our exploration assets was confirmed by successful drilling campaigns at both the Zani-Kodo gold project and the Semhkat base metals concessions in the DRC. JORC compliant Indicated and Inferred resources at Zani-Kodo have reached a total of 1.25moz, with the results of further drilling expected to be known shortly. With a further 7,000m of the Zani-Kodo trend yet to be tested, we continue to believe in the tremendous potential of this asset for Mwana. Exploration is also continuing at the Semhkat concession, focussing on the development of a resource at Kibolwe through diamond drilling and geo-chemical surveys. With an intensive exploration programme planned for the months to come, we hope to be able to update the market on this in due course.

Mwana finishes the financial year with a significantly strengthened balance sheet. The proceeds of our successful share placings in October 2010 and May 2011, £4.8m and £8.8m respectively have been allocated to our exploration, expansion, and care and maintenance programmes. Our plans at Freda Rebecca were further supported by the drawdown of a US$4m loan facility from the Industrial Development Corporation of South Africa. The financing, the first of its kind in Zimbabwe, confirms both the quality of our assets and our ability to finance their development in Zimbabwe and beyond.

In addition to providing the best value for our shareholders, our commitment also remains with the communities in which we operate. Education and employee and community health programmes are a priority at our assets, and our positive impact on the local economy has included infrastructure support and procurement expenditure sourced from local suppliers. During the difficult care and maintenance period at BNC, we have continued to provide accommodation, water, electricity and primary health care for BNC employees.

I would like to extend my thanks to our shareholders, management and operational teams, employees and all those who have supported us over the last year and are continuing to do so as we grow into the next stage of our development.

Review of Operations and Exploration

Precious metals - operations

Freda Rebecca Gold Mine - Zimbabwe

The Freda Rebecca gold mine, situated in the town of Bindura, was acquired by Mwana Africa in April 2005. Production resumed in October 2009 following an extended period of care and maintenance. Mwana has committed to sell a 15% stake in Freda Rebecca to a Zimbabwe investor.

Freda Rebecca produced 27,240 ozs of gold in the year to March 2011, the first full financial year of production since the restart.

Since the recommencement of production, tonnage mined, grade and recovery have made steady progress. Ramp-up to the Phase 1 production target rate of 2,500 ozs per month (30,000 ozs per annum equivalent) has been successfully achieved with an average monthly production of over 2,500 ozs for the 10 month period to March 2011.

A steady increase in mined tonnage from underground operations has been recorded. This is attributable to improved loader availability and the deployment of an increased number of trucking units following the award of a load and haul contract as part of the ramp-up strategy.

Operational effectiveness as measured by equipment availability, running hours and tonnes per hour have demonstrated that the milling circuit is well established and capable of handling the required volume throughputs. As a result of implementing the planned maintenance programme, which involved significant upgrade work on the processing plant, plant availability has improved and has been sustained ahead of targets.

Plant recovery has improved progressively since operations resumed, with an average recovery rate of 84% being achieved in the quarter ended March 2011.

With effect from the 11th of January, Freda Rebecca joined the "uninterrupted power supply" tariff with the Zimbabwe Electricity Supply Authority. Since that date, the site has benefitted from full power with no incidents of load shedding or power disturbance being recorded.

In June 2011, Mwana announced the completion of the Phase 2 refurbishment programme and the commencement of commissioning of the second mill at Freda Rebecca. The Phase 2 programme comprised the overhaul and refurbishment of the second milling circuit and its associated Carbon-In-Pulp/Carbon-In Leach sections. Following completion of the commissioning of the second mill, Freda Rebecca is well positioned to expand its processing capability and reach the targeted Phase 2 annualised gold production rate of 50,000ozs per annum.

In February 2011, following fulfilment of the required conditions, including the provision by the Export Credit Insurance Corporation of South Africa ("ECIC") of political risk insurance for the facility, Freda Rebecca drew down the first $4m tranche of a $10m project finance facility from the Industrial Development Corporation of South Africa. The drawdown of the remaining $6m remains subject to the fulfilment of further conditions precedent.

In April 2011, the Company announced increased mineral resources at Freda Rebecca. Based on a cut-off grade of 1.5g/t gold, the Indicated Mineral Resource increased from just over 1 million ounces to 1.67 million ounces of gold, whilst the Inferred Mineral Resource, as similarly defined, is now 0.64 million ounces. The updated mineral resource was independently verified by SRK Consulting (UK) Limited, and is expected to form the basis of an extended mine life.

The effective date for the Freda Rebecca resource estimate is September 2010.

Precious metals - exploration

Zani-Kodo - Democratic Republic of Congo

Mwana has a joint venture with the state-owned Office des Mines d'Or de Kilomoto (OKIMO) for gold exploration in the Ituri district of the DRC. The joint venture, in which OKIMO has a 20% free carried interest, covers gold mining rights over 1,605 square kilometres in Orientale Province, containing a series of highly prospective greenstone belts of Kibalian age which are considered to have the potential to host world-class gold deposits. Zani-Kodo is situated between the Kibali (formerly Moto Mines) Project (Randgold/Anglogold J.V.) and the Mongbwalu project (Anglogold).

In July 2010, an increased JORC compliant resource at Zani-Kodo was announced. Based on a cut-off grade of 1.0g/t gold, the Indicated Mineral Resource increased to 265koz of gold while the Inferred Mineral Resource, as similarly defined, is now 998koz .

The effective date for the Zani-Kodo resource estimate is July 2010.

The effective date for the Zani-Kodo resource estimate is July 2010.

Diamond drilling during the year was focused on the Badolite target area which is situated 1.5km to the south of the Kodo deposit. A total of 50 holes for 10,027 metres were drilled during the reporting period. The southerly continuation of the Zani-Kodo mineralized trend, which is marked by the sheared contact between footwall metasandstones and hangingwall Banded Iron Formations, was interpreted to pass through the area based on aeromagnetic data and field mapping. The area is largely covered by talus deposits which explains the lack of artisanal activity. Drilling successfully intersected the targeted contact, and continuous mineralisation was identified over a strike length of 700m. Two high grade shoots with intersections of up to 28m @ 3.00g/t were identified. In addition a significant portion of the near surface mineralisation is within the oxide zone. The ore zone remains completely open at depth. The table below shows intersections above 1.0g/t at Le Badolite released to date.

Le Badolite Intersections above 1.0g/t released to date

To date a total of 2,000m of the Zani-Kodo trend has been shown to contain continuous mineralisation. A further 7,000m remains to be tested, along with a number of targets in the hangingwall of the structure.

Base metals - Operations

Bindura Nickel Corporation - Zimbabwe

Situated near the town of Bindura, 90 kilometres north-east of Harare, BNC is the only integrated nickel mine, smelter and refinery operation in Africa. Historically, ore from the Company's Shangani and Trojan mines, with a combined hoisting capacity in excess of two million tonnes of ore per year, was concentrated and fed, along with concentrate from third parties, to BNC's smelter and refinery. BNC is listed on the Zimbabwe Stock Exchange. Mwana Africa acquired its 52.9% stake in the company in 2003.

The mines, smelter and refinery remained on care and maintenance during the year. The care and maintenance programme continues to preserve the integrity of the underground operations, surface concentrators and the smelter and refinery complex.

BNC has evaluated various scenarios for the resumption of operations. Given relatively limited availability of debt and equity finance for projects in Zimbabwe at this time, a decision was taken to try to restart BNC's operations sequentially, beginning with the resumption of concentrate production from the Trojan mine and processing facility.

BNC has developed detailed plans for the resumption of operations at Trojan, and SRK has completed an independent Competent Person's Report (CPR) reviewing these plans - the results of which were announced on 10 August 2010. SRK's CPR states that; "SRK has reviewed the Business Plan for the re-start of operations at Trojan and considers the plan to be both realistic and achievable".

BNC announced in February 2011 that it had signed an off-take agreement with Glencore International who will purchase all the concentrate produced by Trojan. After the restart, BNC expects to produce concentrate containing 7,000 tonnes of nickel per year at steady state. BNC continues to seek finance to fund the restart of operations.

In anticipation of the re-start of operations management has carried out a programme of works aimed at overhauling key components of engineering and operational infrastructure. These works, funded from the BNC balance sheet, included overhaul of the main pumping arrangements and ventilation fans and a replacement programme of shaft guides. On surface the waste handling system has been re-engineered together with a major overhaul of the surface secondary and tertiary crushers.

Preparatory work for the restart of operations has included the commencement of limited underground development (approximately 850m development completed), allowing the commissioning of underground Load Haul Dumpers, rigs and associated mining and engineering services together with shaft systems. Ore and waste hoisted to surface has allowed the successful hot commissioning of the surface waste conveyors and ore crushing facilities. The objective of the programme has been to de-risk the planned restart programme in anticipation of project funding. The management team at BNC has been retained during care and maintenance and have been re-mobilised and actively engaged in the pre-start programme.

In anticipation of the phased re-start, plans are underway to restructure the operations so as to reduce cost structures and ensure maximum productivity and profitability going forward. The restart is dependent on obtaining funding which most likely will have to be sourced from foreign investors and/or the international debt markets. Obtaining restart funding will likely be dependent on BNC restructuring and improving its current creditor and workforce structure and resolving issues around the indigenisation and empowerment act.

The effective date for the Trojan resource estimate is March 2010, and the effective date for the Shangani resource estimate is August 2008. The effective date for the Hunters Road resource estimate is May 2006. The JORC compliant resource of 36,437kt is found in the West Ore body of Hunters Road and includes 2,377kt of resource which forms part of a 30m cap of oxide ore mineralisation. In addition, in 1993, an Anglo American MinRED estimate showed 11,000kt grading 0.43% Ni approximately 600m east of the West Ore body of Hunters Road which is excluded from the resource shown above.

Base metals - exploration

SEMHKAT (Societe d'exploration Miniere du Haut Katanga)

Mwana Africa holds a 100% interest in SEMHKAT, which has exploration concessions covering 4,845 square kilometres in the south-east of the DRC. Exploration is focusing on sediment-hosted stratiform copper-cobalt, iron oxide copper gold (IOCGs) occurrences as well as on showings of lead and zinc.

Exploration during the year focused on developing the resource at Kibolwe through a diamond drilling programme on the East, South and West of Kibolwe. Soil geochemical surveys were also conducted at Kibolwe, Mukema West and Lunsano target areas. Mwana has outlined a 10,000 metre drilling programme for 2011/12.

Mwana Africa is also conducting exploration under a joint venture agreement with Ambase Exploration Africa, a subsidiary of Anglo American, over 476 square kilometres in the North West part of the concession. During the course of the year a total of 2,355 samples were collected on regional reconnaissance lines and several new soil geochemical anomalies were identified. Soil geochemical anomalies reach a maximum of 530ppm Cu. A regional 20,000m RAB drilling programme is scheduled for 2011 to follow up the soil anomalies.

 Mwana Africa holds an 85% interest in further exploration rights over 6,395 square kilometres of prospective ground in the western Katanga and eastern Kasai Oriental provinces of the DRC (Maniamuna).

The Kibolwe prospect is a stratiform copper oxide deposit consisting of mainly malachite mineralisation.

Reverse circulation and core drilling programmes carried out from 2004 to 2010 have outlined a near-surface, flat-lying mineralised zone up to 40 metres thick extending over a strike of 1.88 kilometres. During 2010 a core drilling programme of 5,686m was completed with a view to extending the known mineralized zone to both East and West. The table below shows all intersections above 0.5% at Kibolwe as at March 2011.

Kibolwe Intersections above 0.5% as at 31 March 2011

To the west at Kibolwe the mineralisation splits into two zones representing the limbs of an antiformal structure. The main Kibolwe area is situated in the crestal area of the fold, with mineralisation deepening to the east. The 2010 drilling has added significant strike length to the already defined deposit.

Mukema represents a Fe Oxide-Cu-Au target. Malachite, chalcopyrite and chalcocite have been identified along a 700-metre strike length. In places the mineralised breccia is 40m thick and coincides with a four-kilometre long thrust fault highlighted by aeromagnetic and radiometric data. Further follow up work will be carried out in 2011.

The Lunsano Permit overlies brecciated Roan Group sediments with a strike length of over 20km. During 2010 infill soil geochemical surveys were carried out and these confirm the presence of copper mineralisation. A 2km x 2km Cu anomaly (>80ppm) has been identified.

Diamonds - operations

Klipspringer - South Africa

The Klipspringer diamond mine is situated approximately 250 kilometres north of Johannesburg. Mwana Africa acquired its stake of approximately 62% through the purchase of SouthernEra in 2007. The Company's stake has increased to 66.7% following dilution of the JV partner due to non-investment by the partner in the working capital requirements of Klipspringer.

A total of 24,780 carats were produced during the year. The average diamond price for the year was US$125 per carat. Although the diamond prices improved during the year by almost 15%, this was offset in part by the continuing strength of the South African rand against the United States Dollar, in which Klipspringer's revenues are denominated.

In September 2010 a 31.25 carat stone was recovered from the mine. The diamond was sold for US$8,200 per carat and to date this is the largest diamond recovered from the Klipspringer mining operation in just over 10 years.

 Following a number of severe weather incidents in December 2010 and January 2011, which flooded the shaft bottom and lower (7) level, a decision to stop production and development at Klipspringer for reasons of health and safety was taken. Operations have ceased and the mine is currently in a recovery phase aimed at re-instating infrastructure that was damaged as a result of the flooding. Management are reviewing restart scenarios and timing.

* effectively represents 9 months production due to the weather incidents in December/January

Diamonds - other interests

Mwana Africa has minority stakes in a number of other diamond projects including a 20% interest in Société Miniére de Bakwanga (MIBA) in the DRC, an 18% interest in the Camafuca project in Angola, and a 12.5% interest in the BK16 project in Botswana.

 Financial review

Income Statement

Pro-forma income and expense

The group reported turnover for the period of £27.3 million (2010: £18.8 million) and a net loss before income tax for the year of £3.7 million (2010: £14.4 million).

Freda Rebecca

During the year, Freda Rebecca sold 27,240 ounces of Gold (2010: 8,550 ounces) at an average price of US$1,325 per ounce (2010: US$1,116 per ounce) as well as by-products, generating revenue of £23.4 million (2010: £6.0 million). Operating costs during the period increased in line with the ramp up of operations, and totalled £20.4 million (2010: £9.7 million) for the year. An operating profit of £3.1 million together with a reversal of impairment on property, plant and equipment of £11.7 million resulted in a net profit before income tax of £14.4 million.

Bindura Nickel Corporation

Revenue of £2.6 million (2010: £11.8 million) was generated through the sale of in-process inventories. Operating costs of £15.1 million (2010: £16.6 million before impairment) were reduced from the previous year as the mine was on care and maintenance for the entire year. BNC reported a net loss before income tax of £10.7 million (2010: £4.8 million).

Other Mwana Africa group

Other revenue of £1.3 million (2010: £1.0 million) was generated by the group, principally the Klipspringer diamond mine. The company, excluding BNC and Freda Rebecca, incurred operating costs of £8.6 million (2010: £8.6 million).

Cash flow statement

Pro-forma cash reconciliation

Freda Rebecca

Positive cashflow of £4.3 million was generated by operations during the year. £3.0 million was invested in additional working capital of which £2.2 million was used to increase inventory to more adequate levels. Further capital expenditure of £2.6 million (2010: £2.2 million) comprises £1.0 million to maintain operations and £1.6 million to expand operations through the phase 2 project. Funding was made available by the drawdown of £2.4 million (US$4 million) from a loan facility provided by the Industrial Development Corporation of South Africa and positive operating cashflow.

Bindura Nickel Corporation

Sales of inventory and intermediate material and investments and receipt of cash from debtors, was offset by partial repayments to creditors and the costs of the care and maintenance programme. Net working capital movements resulted in the release of £5.5 million (2010: £2.8 million) including the sale of listed equities held by BNC. BNC's net cash position decreased from an opening balance of £4.7 million to £1.5 million at the year end.

Other Mwana Africa group

Mwana Africa (excluding BNC and Freda) saw operating cash outflow of £7.3 million (2010: £7.2 million). During the year, Mwana Africa invested £7.7 million (2010: £4.0 million) on its portfolio of exploration prospects, £2.8 million on Semhkat (2010: £1.9 million) and £4.9 million on Zani (2010: £2.1 million).

During the period, the company issued 46.4 million shares (2010: 88.3 million), raising £4.8 million net of costs (2010: £8.4 million).

Balance sheet

At 31 March 2011, the group had cash balances of £4.6 million (2010: £15.1 million), comprising £1.5 million (2010: £4.7 million) held by BNC and £3.1 million (2010: £10.4 million) held by other Mwana Africa group entities. The book value of shareholders' equity at the year end was £42.5 million (2010: £41.5 million).

Freda Rebecca

A combination of continued investment in assets, the ramp up to phase 2 and the impairment reversal of £11.7 million has resulted in an increase in non-current assets to £26.4million (2010: £13.2 million).

Current assets increased by £3.9 million to £6.6 million (2010: £2.7 million). This amount includes an increase in trade debtors of £1.2 million, an increase in spares and inventory of £2.0 million and other debtors of £0.7 million.

Bindura Nickel Corporation

The value of current assets reduced by £5.5 million to £6.2 million (2010: £11.7 million) owing to conclusion of sales of various in-process inventories, certain non-critical stocks and spares, sale of the remaining portion of the equity portfolio, and receipts from an outstanding debtor. Raising additional provisions have resulted in an increase in current liabilities to £20.3million (2010: £15.6 million). 

Other Mwana Africa groupThe value of non-current assets increased to £24.0 million (2010: £17.1 million) as a result of additional exploration expenditure which was capitalised during the year in accordance with the groups policy.

Group liquidity

At 31 March 2011 the Group, excluding BNC, held cash of £3.1 million (2010: £10.4 million). As at 30 June 2011 the group, excluding BNC, held cash of £8.8 million following funds raised of £8.8 million in May 2011 and positive operational cashflows from Freda Rebecca.

IDC facility

As announced in February 2011, following the fulfillment of required conditions, including the provision by the Export Credit Insurance Corporation of South Africa ("ECIC") of political risk insurance for the facility, Freda Rebecca drew down the first $4m tranche of the Industrial Development Corporation of South Africa Ltd ("IDC") $10m project finance facility. The facility is repayable in 10 equal installments over a five year period and attracts an interest rate of US$LIBOR plus 5%.

Draw down of the second tranche of the facility, totalling US$6 million, is subject to independent verification of JORC/SAMREC compliant measured gold resources, sufficient to support a 10-year mine life. Adequate inferred and indicated resources to support this mine life were defined in the resource update at Freda Rebecca announced in April 2011 and discussions are ongoing with the IDC to confirm whether this is sufficient to meet the draw down condition.

Zimbabwean indigenisation

In 2007, the Zimbabwean Government published the Indigenisation and Economic Empowerment Act which made provision for the indigenisation of up to 51% of all foreign owned businesses operating in Zimbabwe. Regulations in support of the Indigenisation Act were published in February 2010 in preparation for the implementation of the Act.

On 25 March 2011 the Minister of Youth Development, Indigenisation and Empowerment published a notice in the government gazette promulgating the Indigenisation and Economic Empowerment (General) Regulations in statutory instrument 21 of 2010. The document sets out the requirements for the implementation of the Indigenisation Act and its supporting regulations as they pertain to the mining sector. These regulations include the requirement to transfer a minimum of 51% or a controlling interest to indigenous Zimbabweans. They also state that the valuation of the shares would be calculated taking into account the State's sovereign ownership of the minerals exploited.

The company has submitted representations relating to the indigenisation regulations to the Zimbabwe Government and discussions are ongoing to determine the impact, if any, on Mwana's shareholding in its Zimbabwean assets.

52.9% of BNC is owned by Mwana with Zimbabwean shareholders owning the remaining 47.1%, which includes the government who own approximately 22% through government controlled entities. The directors of Mwana consider that through the local ownership and the participation by BNC in local community initiatives, BNC substantially complies with Zimbabwean indigenisation regulations existing and proposed. BNC has submitted its Indigenisation Plan and is in discussion with Government concerning the restructuring of BNC's creditors.

Freda Rebecca Gold Mine which is currently 100% owned, has submitted its Indigenisation Plan in 2010 and is in discussion with Government concerning these proposals. The Board of Mwana anticipates that these discussions will result in an ownership structure that will benefit all stakeholders and will not reduce Mwana's ability to control the cash flows of Freda Rebecca although there may be a reduction in its economic interest. Mwana has already committed to sell a 15% interest in Freda Rebecca Gold Mine to a local Zimbabwean investor as detailed in note 31 to the accounts.

Going concern

The Directors, after making enquiries and considering the uncertainties described further in note 2: Basis of preparation to the financial statements 'Going Concern' have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly they continue to adopt the going concern basis in preparing the Annual Report and Financial Statements and these Financial Statements do not include any adjustments that would result from the going concern basis of preparation being inappropriate. 

Overview of social and environmental responsibility

Mwana Africa's reputation for responsible development has been established by ensuring a safe working environment for its staff, by delivering benefits to the communities in which it operates, and by minimising the environmental impact of its activities. The Company's primary contribution to the remote areas in which it operates is the stimulation of economic activity through the creation of jobs, development and support of local businesses, the use of local contractors, and the purchase of goods and services from nearby suppliers. The focus of Mwana Africa's social initiatives continues to be in education, health, and support of small and medium enterprises (SME's).

The Mwana Group policies for Business Principles, Occupational Health and Safety, Environment, and Corporate Social Responsibility (CSR) were all updated and revised during this reporting period. All Exploration Standards of Practice were similarly reviewed and re-issued. Stakeholder engagement is actively pursued through a variety of formal and informal meetings, briefings, surveys, and feedback sessions on issues raised.

Give the importance of CSR, Mwana was very proud that Freda Rebecca was awarded the best CSR programme in 2010 in the Mashonoland Central region by the Zimbabwe Chamber of Commerce.

As per the South African Department of Mineral Resources requirements, for the calendar year to 31 December 2010, the Klipspringer Mine was 62% compliant with the South African 2002 Mining Charter targets for Black Economic Empowerment (BEE), Employment Equity (EE) and localisation of recruitment and procurement, skills training, and environmental practices.

Workplace health and safety

Mwana Africa recognises that exploration and mining have an inherent level of risk, and is pleased to report that no fatalities occurred this year at any of its operations. Proactive safety management programmes instituted at our active mines resulted in reductions in the lost time injury frequency rate (LTIFR) at the Klipspringer Mine from 14.78 to 1.06, and from 5.61 to 0.53 at the Freda Rebecca Mine. Both mines and all our exploration operations routinely achieved months in which no lost time injuries were reported. Freda Rebecca Mine began the initial systems and documentation compilation for certification to the OHSAS 18001: 1999 standard for occupational health and safety.

Employment

At the year end, Mwana Africa employed 2,991 people, of which 276 are in management and administrative positions.

Preference during recruitment is given to the local community, especially for unskilled and semi-skilled positions. With the exception of senior expatriate management, all staff in our exploration operations are drawn from the immediate communities. At Freda Rebecca Mine in Zimbabwe 94% of the workforce is from the local town of Bindura. 90% of BNC's staff are from the local communities of Bindura and Shangani.

Between 90% and 100% of our workforce are represented by unions, which contribute to positive labour relations and collaboration with management through joint forums on issues such as wages, conditions of employment, Occupational Health and Safety, and serious diseases such as HIV/AIDS. No employee days were lost to industrial action. At the Klipspringer Mine in South Africa, 52% of the workforce was recruited from the immediate community, and a further 41% from within the province.

Local economic impact

At the Klipspringer and the Freda Rebecca Mines, 31% and 23% respectively of total procurement expenditure was sourced from local/provincial suppliers. Several small business enterprises have been established or assisted by Freda Rebecca to provide services to the Mine and the Mine villages, and to encourage entrepreneurial ventures. The mines and exploration projects assist with infrastructure support such as the refurbishment of schools, upgrade of roads, and the construction of small bridges.

Where operations interact with artisanal gold miners, the Company has undertaken studies to better understand the issues of and challenges faced by these populations. This is as a prelude to formulating a strategy to manage future interactions with the aim to improve these miners working conditions. At Zani, PACT, an American NGO, is assisting Mwana with this process.

Education

Freda Rebecca Mine has developed a partnership with the Italian NGO Terre des Hommes to improve the educational facilities at the local village's crèche. This NGO aims to uplift vulnerable children through the full provision of school fees for a child's educational career. It is hoped that this partnership can be extended to the local primary schools in the Bindura area. Both BNC and Freda Rebecca Mine assist local scholars to complete their tertiary education by providing them with 6 month vocational placements. The Freda Rebecca Mine is also sponsoring 4 students through their degrees at the School of Mines. BNC provides on-site primary school education, funds secondary schooling and grants a number of scholarships to higher education institutions for employees' children.

Employee and community health

The principal health issues faced in the regions where Mwana Africa operates are malaria and HIV/AIDS. The Company provides medicines, education and training for the prevention and treatment of both diseases, as well as associated infections such as tuberculosis. BNC and Freda Rebecca Mine also staff and fund the occupational health as well primary health care clinics for employees and their families. Freda Rebecca recently began offering an Employee Assistance Programme to its employees and dependents, which focused on counselling for work and lifestyle problems. Mwana's mine operations have all implemented community-wide HIV/AIDS management strategies linked to the concept of overall Wellness. This includes awareness and education campaigns, voluntary counselling and testing (VCT), and health care training. UNICEF donates primary health care drugs to Freda Rebecca, which passes on the unused portions to the local provincial hospital.

Both Freda Rebecca and BNC have been accepted into the HIV/AIDS assistance programme co-ordinated by the Swedish Workplace HIV & AIDS Programme (SWHAP). This was possible through the relationship with a Swedish company, one of Mwana's major equipment suppliers. Assistance from this organisation will improve the implementation of Mwana's Zimbabwean HIV/AIDS and Wellness practices, and assist with specialized studies such as zero-prevalence surveys, Knowledge, Attitude and Practice (KAP) questionnaires, and statistical risk assessments. Both organisations also receive assistance from the Zimbabwean Business Council on Aids (ZBCA). Freda Rebecca, through a company supported medical aid, provides anti-retroviral (ARV's) medication to affected employees and their dependents. BNC has initiated the process of providing this aid through the same medical aid organisation.

Environmental impact

Mwana Africa limits the impact of its operations on the environment through responsible waste disposal and prevention of pollution, and optimising the use of resources such as water, fuel and electricity. Proactive measures are taken to conserve local biodiversity, and to re-establish habitats disrupted by vehicle movement, waste rock dumps and tailings dams.

In all but one of our operations, internal and external environmental audits were completed. No significant non-compliances were found, and Freda Rebecca received a complimentary report from the Zimbabwean Chamber of Mines for overhauled environmental management systems. Monitoring of water discharged by pumping after the flooding incidents at Klipspringer Mine showed no contamination of the groundwater. Geohydrological studies at Freda Rebecca Mine established that the groundwater has not been contaminated with Acid Mine Drainage (AMD) or industrial pollution or effluent. Proactive water quality practices have sufficiently improved on Freda Rebecca Mine to reduce its discharge permits from red to blue.

Freda Rebecca has successfully implemented an Environmental Management Programme, prepared in accordance with the Equator Principles and the performance standards of the IFC/World Bank/World Health Organisation Guidelines. This mine has begun the process of obtaining ISO14001 certification for environmental practices.

Mwana Africa recognises its obligation to rehabilitate the sites where it has operated. Financial provisions are in place for costs associated with the closure of the Company's operations in Zimbabwe and South Africa, as prescribed by local laws.

Results for the year ended 31st March 2011

The financial information set out in this annual results announcement does not constitute the Company's statutory accounts for the years ended 31 March 2011 or 31 March 2010 but is derived from those accounts. Statutory accounts for the year ended 31 March 2010 have been delivered to the registrar of companies, and those for the year ended 31 March 2011 will be delivered in due course. The auditors have reported on those accounts; their report was (i) unqualified, (ii) included an emphasis of matter relating to going concern and an emphasis of matter relating to the carrying value of the Company's investment (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

Consolidated income statement for the year ended 31 March 2011

Consolidated statement of comprehensive income for the year ended 31 March 2011

Consolidated balance sheet as at 31 March 2011

Consolidated statement of changes in equity for the year ended 31 March 2011

Consolidated statement of changes in equity for the year ended 31 March 2011 (continued)

Consolidated statement of cash flows for the year ended 31 March 2011