Final Results

31 July 2013

Mwana Africa PLC

("Mwana" or the "Company")

Audited Results for the Year to 31 March 2013

Mwana Africa PLC is pleased to announce its audited final results for the year to 31 March 2013.

Financial Highlights

·; Group revenues up 34% to $109.2m (2012: $81.3m)

·; Group loss of $43.5m (2012: loss of $6.7m), after a $43.7m impairment charge on BNC

·; Group profit before impairment of $0.5m (2012: loss of $6.4m)

·; Exploration spend of $15.3m (2012: $10.2m)

·; Share placement in April 2012 raised approximately $32.4m net of expenses

Operational Highlights

·; Freda Rebecca gold sales increased by 37% to 65,350 ounces for the year (2012: 47,770 ounces)

·; Freda Rebecca C1 costs down by 13.6% to $897/oz (2012: $1,038/oz)

·; Freda Rebecca gold recoveries up to 81% (2012: 75%)

·; Increased gold resource at Zani-Kodo of 30% from 2.0m ounces to 2.6m ounces

·; Successful restructuring of BNC and restart of BNC's Trojan mine with sale of first concentrate in April 2013

·; Joint venture agreement signed with Zhejiang Hailiang Company Limited covering 28 of our copper licences in Katanga, DRC

Post Period Highlights

·; Positive test results at Zani Kodo from test work carried out on samples taken from the Kodo Main orebody. The ore was found to be non-refractory and responded well to all recovery processes investigated, with higher than 90% gold extraction being obtained across all the recovery methods tested.

·; Agreement signed with Greenhurst Mining and Exploration to re-treat fine residue tailings at Mwana's Klipspringer diamond mine on a profit share basis. Construction of the processing plant and site preparation is in progress.

·; Cost cutting programme and review of funding options announced in response to falling commodity prices.

·; Despite impairing BNC's non-current assets at year end as a result of lower nickel prices, since year end, BNC has commenced a review of its mine plan, focusing on mining the higher grade massives, which could reduce its funding requirement. As such the Board will keep under review the requirement to reverse the impairment at an appropriate time in the future.

·; Given the fall in commodity prices following the year end, the Mwana Group requires further funding in the coming months and the Board is engaged in a process to secure that funding. That process includes discussions with its existing major shareholders and with new strategic investors. The Company is also in discussions with investors regarding possible project funding solutions for exploration assets within the Group.

Kalaa Mpinga, Chief Executive Officer of Mwana, commented today: "A considerable amount has been achieved by the Mwana Group over the course of the past financial year including increasing the production rate at Freda Rebecca by 37% to over 65,000oz, expanding the gold resource at Zani-Kodo to over 2.6Moz, securing an established partner in the copper industry to provide exploration funding for SEMHKAT, and successfully concluding the recapitalisation and restructuring of BNC, which in turn led to the restart of the Trojan Nickel Mine and, post period, sale of first concentrate to our off-take partner, Glencore Xstrata.

"Whilst we have, as a result of a steep decline in the Nickel price, decided to impair BNC in our accounts this year, current reviews of BNC's mine plan may result in some reversal of this impairment in the future. Our results show a profit before impairment of $0.5m, which is the first since 2007 and a notable achievement by the Company.

"Post the financial year end our share price has suffered from a combination of weakening commodity prices, which have negatively impacted our cash flows at Group level and, a decline in general market sentiment to junior miners. In response to these challenges we have announced a cost cutting exercise at corporate and project levels; this, together with securing necessary funding and the underlying quality of our projects, will see Mwana emerging as a stronger mining group in the coming financial year."

For further information (including a copy of these accounts) please visit www.mwanaafrica.com or contact:

About Mwana Africa PLC

Mwana Africa PLC is a pan-African, multi-commodity mining and development company. Mwana's principal operations and exploration activities cover gold, nickel, copper and diamonds in Zimbabwe, the DRC and South Africa.

The restart of operations at The Trojan Nickel Mine (owned by Mwana's Zimbabwe subsidiary Bindura Nickel Corporation ("BNC") follows four years during which all of the BNC assets were on care and maintenance. In September 2012, Bindura Nickel Corporation carried out a restructuring and recapitalisationinvolving US$23m being invested into BNC which has allowed it to restart the Trojan mine. First sale of concentrate to Glencore took place in April 2013.

Mwana's Freda Rebecca gold mine in Zimbabwe, having restarted operations in 2009, produced 65,350 ozs of gold in the 12 months to March 2013.

In February 2013, Mwana announced that the gold mineral resource at its Zani Kodo project in Democratic Republic of Congo had increased to 2.6 million ounces.

In February 2013, Mwana announced it had signed a Joint Venture Agreement with Zhejiang Hailiang Company Limited to jointly explore some of its copper license areas in the Katanga Province of the DRC

Chairman's Letter

Dear Shareholder,

This has in many ways been a very successful year for the Group, but, as I write, lower metal prices present some of our operations with major challenges.

As I outlined in my last letter to you, in April 2012 Mwana raised US$33.5 million with the support of a major investor in the form of China International Mining Group Corporation, which took a 21.7% interest in the Group. This injection of capital provided sufficient funding to restart BNC's Trojan nickel mine, and enabled further exploration at our DRC gold and base metals projects.

Production at Freda Rebecca continued to increase and it is now once again the single largest gold mine in Zimbabwe. In the DRC, our gold exploration resulted in a 30% increase in the gold JORC mineral resource at Zani-Kodo, taking the total indicated and inferred ounces to 2.6 million. Metallurgical test work on the Kodo Main ore body has been extremely encouraging, with gold recoveries of over 90% being achieved from all leaching methods tested. In February 2013, a joint venture agreement was signed with Zhejiang Hailiang Company Limited, China's largest copper tube exporter and a leading manufacturer of copper products in China, to provide up to US$25 million of investment into exploration of some of our Katanga copper licences.

One of the most significant achievements of the financial period was the restructuring and recapitalisation of BNC following a long period of care and maintenance. This was a complicated process and only possible due to the joint efforts of Mwana and BNC staff, trade unions, creditors, other BNC shareholders and various Government ministries; I would like to thank all of them for their assistance in getting BNC restarted. In September 2012, Mwana underwrote a rights issue in BNC injecting $21m of new capital, with a further $2m being raised from local Zimbabwean investors. This funding was sufficient to restart operations at the Trojan mine, and Mwana provided support to BNC throughout the restructuring process. Following a period of commissioning at Trojan, BNC reached a major milestone in April, when the first shipment of nickel concentrate was trucked from the Trojan mine to Durban.

Sadly, despite the great efforts of the management team at BNC, and the delivery of first production on time, the fall of the nickel price from levels around $18,000/t when we commenced the BNC restart in 2012 to recent lows of around $13,600/t, has meant raising funding (debt or equity) for the ongoing ramp up under the current mine plan has not been possible. Given this fall in nickel prices, we have decided to impair BNC in this year's accounts. However, BNC is currently reviewing its strategic options including considering alternative mine plans that could reduce the funding requirement in the short term, and this may result in some reversal of the impairment in the future.

As we announced on the 8th July (and as reflected in note 2 to the Financial Statements) Mwana does require further funding in the coming months and whilst we have received indications of support from some of our major shareholders there is no certainty that funding will be secured. The Board has also mandated significant cost cuts across all areas of the Group which are being negotiated and implemented, and has deferred payment of all bonuses to executive directors and senior management until cash is available for such purpose or alternative means of settlement can be agreed.

In spite of our funding requirement, the situation at BNC and negative sentiment in the markets generally towards junior miners, the operational fundamentals of your company remain strong and, subject to appropriate funding being sourced, I believe that Mwana has a bright future ahead of it on the back of progress at Freda Rebecca, Zani Kodo and our Katanga copper concessions.

We are encouraged by the successful and peaceful conclusion to the referendum on the new constitution in Zimbabwe, which has since been ratified by Parliament and Senate. This sets the tone for a peaceful election which we hope and believe will usher in a new era for business in Zimbabwe.

My thanks go to our operational and exploration teams, ably supported by indefatigable management, and of course to you, our ever loyal shareholders.

Oliver Baring

Chairman

Chief Executive's Review

It is my pleasure to report that, over the past twelve months, significant operational progress has been achieved across all our major projects. Increased gold production from Freda Rebecca has improved our cash flows, returning the Group to profit before impairments for the first time since 2007.

Production at Freda Rebecca Gold Mine continued to ramp up for the majority of the period, however production was adversely affected in the final quarter of the period following the failure and collapse of one of the carbon in leach tanks and related damage to a second tank. Disruption due to the tank failure was minimised and regular mill throughput recommenced on 1st April using an interim tank configuration. Following the incident, immediate modifications were made to the processing circuit to allow limited milling and production to continue. In spite of this setback Freda Rebecca produced 65,350 ounces of gold for the year, contributing $26.0m to group profits and generating $42.8m of operating cash flow.

The leach tank incident in February was unfortunate but valuable lessons were learnt and our emergency response plan was efficiently executed with little environmental damage. I would like to thank our personnel and local and national Government authorities for their efforts throughout the event in dealing quickly and effectively with the situation. Despite this setback, Freda Rebecca will continue to be a significant contributor to our cash flow and our focus remains on increasing the efficiency of the production process and reducing our cash costs.

In early 2013 we began construction of a tailings retreatment pilot plant. This plant is designed to test the viability of producing gold from the large tailings dumps at Freda Rebecca. Construction work on the tailings retreatment pilot plant is progressing well. Leach tank construction is nearing completion, tailings handling, scrubber circuits and pumping arrangements feeding the plant are at an advanced stage of construction. Plant commissioning is expected in the September Quarter 2013.

In the Democratic Republic of Congo, substantial progress was made during this financial period at both the Zani Kodo gold project and our Katanga base metals concessions. At Zani Kodo, a four rig drilling campaign continued over a number of target areas. In February 2013, we reported an increase of 30% in mineral resource ounces to 2.6m oz.

With some studies already undertaken to better understand the characteristics and economics of the Zani Kodo ore body, I am confident that we can continue to demonstrate the enormous potential of Zani Kodo. Randgold Resources is expected to commence gold production at its Kibali gold project later this year, and this will be a significant development for gold mining in this highly prospective gold province.

A significant portion of our Katanga base metals concessions can now be properly explored following agreement with Zhejiang Hailiang Company Limited (Hailiang) in August 2012. China's largest copper tube exporter is providing up to $25m of funding over four years in return for a 62% interest in 28 of our licences. Mwana maintains a 38% non-dilutable shareholding. At the end of the financial period, Hailiang assumed operational control of the exploration programme for the JV licences. In my review next year, I very much look forward to updating shareholders on the exploration progress that will have taken place at various targets in Katanga.

The recapitalisation and restructuring at Bindura Nickel Corporation (BNC) was a crucial achievement during the period that allowed the restart of the Trojan Mine, and in April 2013, the first shipment of nickel concentrate was trucked to Durban and sold to Glencore Xstrata PLC in line with our off take agreement.

In our April 2012 circular we estimated that BNC would need a further circa $15m in 2013 to finalise the Trojan restart. Unfortunately, the nickel price has fallen from around $18,000/t in April 2012 to recent lows of around $13,600/t. This fall in prices meant that, based on the current mine plan, BNC's funding requirement has increased and BNC has not been able to raise debt or equity finance to fund the ramp up at Trojan.

In light of the fall in nickel prices, we have decided to impair BNC in our accounts as at year end. However, post year end, in response to lower nickel prices, BNC has commenced a review of its strategic options, including examining alternative mine plans with the objective of improving short term cash flow and reducing BNC's funding requirement. This review may result in some reversal of the impairment in the future. The alternative mine plans being reviewed utilise the mining flexibility afforded by the presence of higher grade massive sulphide ore within the Trojan ore body. BNC is in the process of seeking short term bridging finance to cover its funding shortfall, and continues to focus on the preservation and integrity of the business and its assets.

The falling gold price has also squeezed operating margins at Freda Rebecca since April 2013, and, along with many other mining companies, Mwana has commenced a cost cutting programme aimed at targeting savings from both corporate and project costs.

Finally, I would like to thank our shareholders, our suppliers and employees at our various projects for your continual support and I look forward to being in a position next year to update shareholders on improved gold production from Freda and continued positive results from our DRC projects.

Kalaa Mpinga

Chief Executive Officer

Review of Operations and Exploration

Precious Metals

Freda Rebecca Gold Mine - Zimbabwe

The Freda Rebecca Gold Mine ("Freda Rebecca"), situated in the town of Bindura, produced 65,350 ozs of gold in the year to March 2013, an increase of 36.8 % from the March 2012 financial year (47,770 ozs). Average quarterly production for the financial period was 16,338 ozs of gold, and the highest level of quarterly gold production was 18,350 ozs, achieved in the quarter to Sep '12. 12,510 ozs of gold was sold in the quarter to March 2013 despite decreased volumes being processed due to the leach tank failure in February 2013.

During the financial period, progress was made on the evaluation of the economic potential of Freda Rebecca's tailings dumps including the commencement of the construction of a pilot plant. Freda Rebecca, which has been in production since 1988, has accumulated some 13 million tonnes of gold bearing tailings in three main storage facilities within the mine lease area. The objective of the pilot scale test plant is to prove that gold can be recovered economically from the tailings with little reprocessing and very low mining and handling costs. An auguring programme over the dumps will produce a JORC compliant mineral resource that we believe has the potential to add significantly to Freda Rebecca gold production.

Work continues to optimise the processing plant, with the focus on increasing plant throughput and recovery improvement. Consultants were engaged in the June 12 Quarter to assist management with the correct configuration of power draw, milling rates and grinds in the milling circuit. Improvements in grind and a reduction in mill ball consumption are now being recorded. Metallurgical tests indicated some variability in the ore characteristics and this variability has had some impact on recovery. To mitigate recovery fluctuations, mining schedules have been amended to ensure the optimal blending of ore supply, which resulted in an improvement in recoveries.

Freda Rebecca production results for the periods to March 2012 and March 2013:

Freda Rebecca resources are given below:

The effective date for the Freda Rebecca resource estimate is April 2011

Zani-Kodo - Democratic Republic of Congo

The Zani Kodo gold exploration project in the Ituri district of the Democratic Republic of Congo ("DRC") covers gold mining rights over 1,605 square kilometres in the Orientale Province. Mwana is in a joint venture with the state-owned Office des Mines d'Or de Kilomoto (OKIMO) which holds a 20% free carried interest. The licenses contain 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 Ashanti J.V.) and the Mongbwalu Project (AngloGold Ashanti).

Exploration drilling on various targets at Zani-Kodo continued apace this financial year with an updated resource of a total combined JORC compliant gold resource of 2.6Mozs (based on a cut-off grade of 0.5 g/t) an increase of 30% on the February 2012 resource statement. This includes the following:

·; Maiden resource of 442,903ozs for the newly discovered Lelumodi deposit

·; Kodo Main indicated gold resource increased by 22% to 547,838 ozs

·; Kodo Main inferred gold resources increased by 8% to 1,023,292 ozs

Zani Kodo resources along with a comparison to the previous update in February 2012 are as follows:

A further 26 holes for 11,038 metres drilled have been completed at the Kodo area since the last resource update in February 2012. These have targeted the downdip extension of the Kodo Main zone and the southern margin of the deposits. The drilling has continued to extend the broad mineralized zone, with best intersections of 24.0m @ 10.04g/t Au, 12.9m @ 6.50g/t Au, 33.15m @ 3.67g/t Au, 21.5m @ 4.46g/t Au and 14.0m @ 5.98g/t Au. Drilling during the year has improved the geological model at Kodo.

The Zani South/Lelumodi area is situated along the southern extension of the Zani-Kodo trend and contains a major linear gold in soil anomaly and significant artisanal activity. A major NE trending fault displaces the contact between Zani South and Gombiri. The first phase of drilling on this anomaly which commenced in 2012 has been completed, with 28 holes drilled on a 50m x 50m grid over a strike length of 300m for a total of 6,400m of core drilling. Drilling has successfully identified a series of near surface, sub parallel, laterally continuous mineralised zones associated with sheared and silicified felsic volcanic units within a sequence dominated by metabasalt and metadolerite.

The best mineralised intersections from Zani South and Lelumodi include 59.6m @ 2.04g/t Au, 51.0m @ 2.01g/t Au, 50.0m @ 2.51g/t Au and 16.3m @ 3.56g/t Au. An initial gold resource of 442,903ozs @ 1.87g/t has been defined. The mineralised zones remain open along strike to both NW and SE, and are also open at depth.

Exploration drilling was completed at the La Badolite target area with continuous mineralisation being identified over a strike length of 600m. Drilling at Badolite was constrained by an overlying +100m thick iron formation. The orebody remains open to depth below this capping. At Zani Central, exploration drilling continued at the target area, located to the south of Badolite, with continuous mineralisation identified over a strike length of 650m. The zone remains open at depth and to the south. A total of 8,712m has been drilled at this location during the financial period.

Base Metals

Bindura Nickel Corporation - Zimbabwe

Located near the town of Bindura, 90 kilometres north-east of Harare, BNC is Africa's only integrated nickel mine, smelter and refinery operation. In the past, 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 has been listed on the Zimbabwe Stock Exchange since 1971.

BNC's mines, smelter and refinery were placed on care and maintenance following the Global Financial Crisis and fall in commodity prices in 2008 and remained so until the conclusion of BNC's rights issue and restructuring in September 2012 when management commenced the restart of the Trojan Nickel Mine. The restart involved the refurbishment of the handling facilities for the surface milling flotation, tailings and concentrate. The cold commissioning of electrical and mechanical circuits encompassing feed conveyors, mills, flotation, concentrate handling and tailings was completed by the introduction of water through the processing plant circuits in late January 2013. The hot commissioning, through the introduction of ore into the milling circuit, commenced on 8th February 2013.

Progress on the surface was matched by a successful ramp up of underground operations. The commissioning of the Trojan Nickel Mine marked a major milestone in the restoration of the Group's nickel assets, following a four year period of care and maintenance. In April 2013, BNC announced the first shipment of concentrate to Glencore.

In February 2013, Mwana announced a 152% increase in the JORC compliant Nickel resource at Trojan. The total Nickel resource for the Trojan Nickel Mine is now 114,952t Nickel (based on a 0.45% Ni cut off), compared to 45,600t previously and the overall resource grade has increased from 1.29% to 1.51%. The continuation of the high grade massives at depth has also been confirmed.

Following a decrease in nickel prices to around $13,600/t, the current mine plan at BNC is not profitable. BNC is therefore reviewing its strategic options, including examining alternative mine plans with the objective of improving short term cash flow. These plans utilise the mining flexibility afforded by the presence of higher grade massive sulphide ore within the Trojan orebody.

Bindura Nickel Corporation - Reserves

Bindura Nickel Corporation - Resources

Note:

The effective date for the Trojan resource statement is January 2013, and, the effective date for the Shangani resource statement is August 2008.

The effective date for the Hunter's Road resource estimate is May 2006. The JORC compliant Hunter's Road resource of 36,437kt is found in the West Ore body of Hunter's 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 Hunter's Road which is not included in the resource shown above.

Katanga Base Metals Concessions - DRC

The Mwana Group holds a 100% interest in 33 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 (IOCG) occurrences as well as on showings of lead and zinc.

The Hailiang Joint Venture, signed in February 2013, covers 28 licence areas, with a commitment by Hailiang to spend US$25m over a 4 year period. Under the JV agreement, the licences can be transferred into a development company in which Mwana will hold a 38% non-dilutable stake. Under the JV Agreement, Hailiang also has a 6 month option over the Kibolwe licence; if this option is exercised by Hailiang they are committed to spend an additional US$15m within 12 months on Kibolwe. Mwana will hold a 40% non-dilutable stake in Kibolwe.

The exploration programme to date includes a high resolution aeromagnetic and radiometric survey flown over the bulk of the area (54,000 line km) and 12,000m of drilling at the advanced Kibolwe surface deposit, 5,700m drilling on extensions of Kibolwe and 7,000m drilling at satellite targets within 10km radius of Kibolwe. An area of approximately 1,500km2 has been covered by soil geochemical sampling.

Katanga prospect areas

http://www.rns-pdf.londonstockexchange.com/rns/5237K_-2013-7-30.pdf 

Kibolwe is the most advanced of the SEMHKAT concessions and is located approximately 150 kilometres northwest of Lubumbashi and 86 kilometres southwest of the town of Likasi. Kibolwe is a near surface secondary enriched sediment-hosted stratiform copper deposit hosted by Mines Sub-group rocks and the dominant oxide mineral is malachite with minor amounts of cuprite and tenorite, occurring within weathered argillaceous limestones. The drill programs have outlined near surface, flat lying mineralized units up to 40 metres thick, extending over a strike of 1,500 meters.

Diamonds

Klipspringer - South Africa 

The Klipspringer diamond mine is situated approximately 250 kilometres north of Johannesburg. Mwana acquired its stake of approximately 62% through the purchase of SouthernEra in 2007. The company's stake has increased to 68.93% following dilution of the joint venture partner due to non-investment by the partner in the working capital requirements of Klipspringer.

As a result of severe weather incidents in December 2010 and January 2011, which flooded the shaft bottom and lower (7) level, the mine remains on care and maintenance. Management are reviewing restart scenarios and timing.

An agreement has been signed with Greenhurst Mining and Exploration to re-treat fine residue tailings at Klipspringer on a profit share basis. Construction of the processing plant and site preparation is in progress. The processing plant will have a capacity of 50 tonnes per hour, with a projected monthly throughput of 22,560 tonnes. Commissioning is targeted for the December Quarter of 2013 and production will commence thereafter.

Other Interests- Botswana, Angola, Democratic Republic of Congo

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.

*Mwana currently holds 55% of BK16 and has entered into an agreement with Firestone Diamonds whereby Firestone can earn up to 87.5% of BK16 for financing and carrying out all work up to the completion of a bankable feasibility study.

Financial review

Income Statement

Pro-forma income and expense statement

The group reported turnover for the year of $109.1 million (2012: $81.3 million) and a profit from operating activities before impairments for the year of $11.6 million (2012: $nil). The net loss for the year is $43.5m.

Freda Rebecca

During the year, Freda Rebecca sold 65,350 ounces of gold (2012: 47,770 ounces) at an average price of $1,650 per ounce (2012: $1,664 per ounce) as well as by-products, generating revenue of $108.1 million (2012: $79.8 million). Operating costs during the period increased in line with the ramp up of operations, and totalled $70.9 million (2012: $56.0 million) for the year. Profit before tax for the year was $36.7 million (2012: $23.2 million).

Bindura Nickel Corporation

Revenue of $1.0 million (2012: $1.5 million) was generated through the sale of in-process inventories. Operating costs of $16.2 million (2012: $16.1 million) increase slightly from the previous year. BNC reported a net loss before impairments and tax of $13.9 million(1) (2012: $14.3 million).

(1) This number was calculated using the Loss before Income Tax of $57.6 million and adding back the $43.7 million impairment loss.

100% of BNC's non-current assets have been impaired in the Group Financial Statements which resulted in an impairment loss of $43.7 million. See note 33 which provides background and financial impact of this impairment.

Other Mwana Africa group

The group, excluding BNC and Freda Rebecca, incurred operating costs of $11.1 million (2012: $10.9 million).

Cash flow statement

Pro-forma cash reconciliation

Freda Rebecca

Positive cashflow of $42.8 million (2012: $27.2 million) was generated by operations during the year. $1.9 million (2012: 10.8 million) was invested in additional working capital. $8.6 million (2012: $8.2 million) was invested in capital expenditure.

Bindura Nickel Corporation

Sales of inventory and intermediate material and receipt of cash from debtors, were offset by partial repayments to creditors, while the restart programme that commenced during the year was funded from the rights issue. $4.7 million was drawn down against a $10 million loan facility made available by Mwana Africa. $2.0 million cash was raised from non-controlling interest during the rights issue. BNC's net cash position increased from an opening balance of $0.4 million (2012: $2.4 million) to $5.5 million at the year end, mainly due to rights issue cash not yet spent on the restart.

Other Mwana Africa group

Mwana Africa (excluding BNC and Freda) saw operating cash outflow of $10.7 million (2012: $9.7 million outflow). During the year, Mwana Africa invested $15.3 million (2012: $10.2 million) on its portfolio of exploration prospects, $3.8 million in Semhkat (2012: $2.9 million) and $11.5 million in Zani (2012: $7.3 million).

During the period, the company issued 399,159,743 million shares at 5.5p per share (2012: 185.4 million shares at 5p per share), raising $ 32.4 million net of costs (2012: $14.2 million).

Balance sheet

At 31 March 2013, the group had cash balances of $15.2 million (2012: $6.7 million), comprising $5.4 million (2012: $0.4 million) held by BNC and $9.8 million (2012: $6.3 million) held by Freda Rebecca and other Mwana Africa group entities. The book value of shareholders' equity at the year-end was $115.7 million (2012: $81.5 million). Refer to note 2 for the funding requirements and cash forecast for the group.

Freda Rebecca

Non-current assets increased by $3.7 million (2012: $3.3 million) as a result of continued investment in mining assets offset by depreciation.

Current assets decreased by $1.7 million (2012: $4.8 million increase) to $13.7 million (2012: $15.4 million). This amount includes a decrease in trade debtors of $3.3 million (2012: $3.5 million increase), an increase in spares and inventory of $1.9 million (2012: $0.9 million) and a decrease in other debtors of $0.3 million (2012: $0.4 million increase).

The movement in non-current liabilities to $19.4 million (2012: $19.9 million) is contributed to the interest on the IDC loan, the continued repayment of the IDC loan facility as well as the increase in the environmental provision.

Bindura Nickel Corporation

The value of current assets increased by $1.7 million (2012: $1.6 million decrease) to $9.0 million (2012: $8.3 million) as a result of the restart programme which necessitates increased inventory. Non-current assets (excluding investments of $0.5 million) of BNC have been impaired, as described in note 33.

Other Mwana Africa group

The value of non-current assets increased to $61.5 million (2012: $46.6 million). Additional exploration expenditure was capitalised during the year in accordance with the group's policy.

Group liquidity

At 31 March 2013 the group held cash of $15.2 million (2012: $6.7 million) of which $5.4 million (2012: $0.4 million) was held by BNC. Included in the group cash balance is $1.7 million (2012: $1.7 million) reserved for loan repayments in relation to the IDC loan facility in Freda Rebecca. As at 30 June 2013 the group held cash of $5.2 million.

IDC facility

Freda Rebecca Gold Mine has drawn down the full $10 million of the IDC project loan facility.

The facility is repayable in 10 equal instalments over a five-year period and attracts an interest rate of US$LIBOR plus 5% with final repayment in 2016.

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', believe that the company and the group will be able to access the financial 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 and sustainable development has been established by ensuring a safe working environment for its staff, by positively engaging with the communities in which it operates, and by minimising the environmental impact of its activities. The company's primary contribution to the 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 enterprise development, in particular in support of small and medium enterprises (SMEs) to diversify local economies and reduce dependence on Mwana's operations as the sole significant employer in the areas in which we operate.

We actively engage with our stakeholders through a variety of formal and informal meetings, briefings, surveys, and feedback sessions on issues raised.

Workplace health and safety

Whilst Mwana Africa recognises that exploration and mining have an inherent level of risk, we deeply regret the loss of life of one of our employees at the Trojan Mine this year. We extend our sincere condolences to his family.

Operations at Klipspringer remained on care and maintenance, whilst at Freda Rebecca Mine the implementation of proactive safety management programs resulted in the lost time injury frequency rate (LTIFR) remaining at 0.91. All our mines and exploration operations routinely achieved extended periods in which no lost time injuries were reported. Our Freda Rebecca Mine maintained certification for the OHSAS 18001: 1999 standard for occupational health and safety, and our Trojan Mine aims to achieve similar accreditation in the coming year.

Employment

At the year end, Mwana Africa employed 1530 people (compared with 2572 the previous year). The significant staff reduction this year reflects the restructuring at BNC.

Preference during recruitment is given to the local community, especially for unskilled and semi-skilled positions. At the Freda Rebecca Mine in Zimbabwe, 65% of the workforce is from the local town of Bindura. One third of all staff at Bindura Nickel Corporation (BNC) is from the surrounding towns and villages.

In Klipspringer Mine in South Africa, all but one of our employees are from communities in the immediate vicinity of the mine. With the exception of senior expatriate management, all our employees in exploration operations are from the surrounding communities.

All operations and exploration management actively engage with union and workforce representatives, which contribute to positive labour relations, through collaboration with management 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 across the group.

Local economic impact

During the year Freda Rebecca Gold Mine has increased the proportion of supplies and services that it sources from local suppliers, with 69% of total procurement expenditure sourced locally. Several small business enterprises are assisted by Freda Rebecca to provide services to the mine and the mine villages, and to encourage entrepreneurial ventures. Similarly, BNC sourced 76% of its total procurement locally. The exploration operations in Katanga source 15% of goods and services from local villages, with the remaining 85% spilt between the towns of Likasi and Lubumbashi. The sheer remoteness of Mwana's operations in Zani necessitate that virtually all supplies are imported from Uganda.

Exploration projects routinely assist with infrastructure support such as the upgrading of roads and the construction of access bridges. In cases of extreme emergency, exploration staff assist community members by providing transport to hospitals.

Bindura Estates (a wholly owned subsidiary of Freda Rebecca) embarked on establishing a commercial farm on the arable portions of the Mine Lease. In addition to bolstering the local economy of Bindura and improving food security, this venture is providing stable employment for the local community as permanent employees and seasonal labour.

Education

Freda Rebecca Gold Mine (FRGM) continued expanding its partnership with the Italian NGO Terre des Hommes (TdH) adding to its support network, a local primary school, Mapunga. TdH maintained its commitment to provide school fees for over 150 children, as well as paying the salaries of some teachers. The Mine organised refurbishment of the buildings and surrounds of Mapunga School, constructing 6 new classrooms, ablution facilities, and sinking a borehole for reticulation and sanitation purposes. FRGM also provided assistance with furniture, educational books and stationery. We helped Batani crèche with the construction of a market garden, and this year, the crèche is also embarking on a small scale chicken-rearing enterprise with FRGM and TdH's support. The vegetables from the garden will supplement the children's nutritional needs, and the income generated will subsidize the crèche thereby reducing school fees. In the coming year, a further 6 schools in the immediate vicinity of the Mine will be refurbished. FRGM is also sponsoring 5 students through their degrees at the School of Mines, and offers scholarships on a case-by-case basis to academically gifted students from the local community.

BNC provides on-site primary school education, funds secondary schooling and grants a number of scholarships to higher education institutions for employees' children.

The exploration project at Zani in the DRC has constructed several classrooms for schools in the vicinity, and has finished refurbishing the dormitory at the secondary school adjacent to the camp. In addition, the project has also commissioned a local carpenter to make desks for local primary and secondary schools.

Employee and community health

The principal health issues faced in the regions in which we operate are malaria, HIV/AIDS and waterborne diseases such as typhoid and cholera.

The company provides medicines, education and training for the prevention and treatment of these diseases, as well as associated infections such as tuberculosis. FRGM helped the local municipal council with its refurbishment of the local water supply, upgrading pumping capabilities, as well as 24 hour maintenance assistance. In addition, FRGM embarked on a comprehensive borehole reticulation programme for outlying communities to ensure access to safe water supply; to date, 10 holes with manual pumps have been completed.

BNC and Freda Rebecca Mine also staff and fund the running of occupational health as well as primary health care clinics for employees and their families. Both the Trojan Mine clinic (part of BNC) and the Freda Rebecca clinic have been certified by the government as Opportunistic Infections Clinics. Freda Rebecca continued with its 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. Freda Rebecca was certified as an ART clinic to dispense anti-retroviral (ARVs) medication supplied by the government to affected employees and their dependents, as well as the local community. Both Freda Rebecca and BNC also receive assistance from the Zimbabwean Business Council on Aids (ZBCA). BNC has initiated a similar association as FRGM with the HIV/AIDS assistance project coordinated by the Swedish Workplace HIV & AIDS Programme (SWHAP). The first phase of cooperation involves the review and implementation of HIV/AIDS and Wellness policies and practices. UNICEF donates primary health care drugs to Freda Rebecca, which passes on any unused supplies to the local provincial hospital.

Environmental impact

Mwana Africa limits the impact of its operations on the environment through responsible waste disposal and prevention of pollution, and through optimising the use of resources such as water, fuel and electricity. We take proactive measures 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 and no significant non-compliances were found. Following the leach tank incident at Freda Rebecca Mine in February, the Mine has successfully cleaned up the pulp spillage to the satisfaction of Zimbabwe's Environmental Management Authority. FRGM, in conjunction with EMA, has since continued to monitor the discharge levels in the drainage canal and these have now returned to acceptable levels. FRGM maintained ISO14001 certification for environmental practices, and continued air quality monitoring confirms that the dust generated by mining activities is in no way impacting negatively on employee or community health. Proactive water quality practices at the Mine have maintained its water discharge status within safe categories. The restart at BNC involves the re-establishment of sound environmental practices, including programs to reduce impacts, and the Trojan Mine aims to obtain ISO14001 certification next year.

Mwana Africa recognises its obligation to rehabilitate the sites where it has operated. In addition, 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.

Board of Directors

Directors' report

The directors present their report and financial statements for the year ended 31 March 2013.

Principal activities

The group's main activities are exploration, development and production of gold, nickel, copper and diamonds. Further information concerning the activities of the group and its future prospects are contained in the Chairman's letter on page 3 and the Review of operations and exploration on pages 6 to 10.

Business review

The Group loss before tax was $32.1 million (2012: $1.2 million). The loss for the year attributable to shareholders of the parent company was $28.6 million (2012: $0.7 million). The directors do not recommend the payment of a dividend on ordinary shares. As required by the Companies Act 2006, the company must provide a fair review of the development and performance of the group during the year ended 31 March 2013, its financial position at the end of the year and likely future developments in the group's business. The information which satisfies these requirements is to be found in the Chairman's letter on page 3, the Chief Executive's review on pages 4 and 5, the Review of operations and exploration on pages 6 to 10, and the Financial review on pages 11 to 14.

Principal risks and uncertainties

The principal risks and uncertainties to which the Group is exposed relate to changes in the market prices of gold, nickel and diamonds, resource and reserves risk, processing risk, environmental risk, mining and operating risk, financing risk and political risk.

Financing Risk

Financing risk has a critical impact on the going concern of the Group and the directors disclose current uncertainties and plans to mitigate them in the basis of preparation note of the financial statements. Mining is a capital intensive business and there is a risk that if finance is not available for the development or further exploration of a project then the value of the project may not be realised. Mwana's financing risk is linked to the availability of funding in the capital and debt market which are impacted by their perception of commodity and country risk. Mwana seeks to mitigate its financing risk by diversifying its sources of finance for the development of its projects.

The impact of the financing raised during the period is discussed in the Financial Review and the current and expected funding requirements are disclosed in Note 2 to the financial statements (regarding Going Concern).

Political Risk

There is a political risk impacting the Group's operations in Zimbabwe. The Group is facing a risk linked to the indigenisation regulation in Zimbabwe. Details of this risk and the actions undertaken to mitigate it are detailed in the following section of the Directors' Report regarding Zimbabwean indigenisation.

Metal Price Risk

Fluctuations in metal prices can clearly affect the profitability of mining operations. The Group seeks to protect itself from adverse fluctuations by investing in projects which can operate economically in lower metal price environments and by controlling operating costs. The Group uses no financial instruments or hedging products to fix metal prices.

The impact of the metal prices on the performance of the period is assessed in note 32.

Resource and Reserve Risk

There is a risk that estimates of Mineral Resources and Reserves overstate their economic potential. This uncertainty could give rise to a situation where a mine is, or becomes, commercially unviable.

The Group manages risk by ensuring that all Mineral Resource and Reserve estimates are calculated by reference to internationally accepted standards (in this case The Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves; "JORC").

In addition all Mineral Resource estimates published by the Group are signed off by an independent qualified person.

Information about the resources and reserves is included in the Review of Operations and Exploration.

Processing Risk

There is a risk that the processing of ore to recover metal fails to deliver recoveries expected and this may have the effect of reducing projected profitability. All of the Group's existing mining operations have a long history of economic production and the processing techniques used are well understood. When the Group invests in new projects the metallurgical processes are thoroughly tested and reviewed by independent consultants before any investment is made.

Environmental Risk

Exploration and development of a project can be adversely affected by environmental legislation and the unforeseen results of environmental studies carried out during evaluation of a project. Once a project is in production unforeseen events can give rise to environmental liabilities and or temporary closure of mining operations.

The Group takes every care to comply with environmental legislation in the countries in which it operates and designs its training and procedures to minimise the environmental impact of operations.

The impact of the existing environmental obligations on the financial statements is disclosed in note 27. The details of the mitigating actions undertaken by the Group during the period are disclosed in the section 'Environmental Impact' of the Overview of Social and Environmental Responsibility.

Mining and Operating Risk

Mining is an inherently risky activity and can involve ground instability, failure of machinery and human error. The Group makes every effort to ensure that these risks are minimised by ensuring that mining operations are professional, that a high level of workforce training and education is maintained and by prompt reporting of incidents to management.

Information about the Health and Safety framework at Freda Rebecca is included in the section 'Workplace Health and Safety' of the Overview of Social and Environmental Responsibility.

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.

Since then, Mwana has disposed of 15% of Freda Rebecca to an Indigenous Zimbabwean. A community trust has been established and discussions are underway with this trust about a disposal of some shareholding in Freda Rebecca to this trust. Furthermore, discussions remain on-going with the Zimbabwean Government to determine any further impact on Mwana's shareholding in its Zimbabwean assets. The Board has considered the impact of the uncertainties stemming from indigenisation risk as disclosed in note 2 regarding the basis of preparation of the financial statements and in the note 19 regarding investments.

Key performance indicators

Management monitors the group's liquidity requirement on a weekly basis. Financial and operational performance is measured regularly and operational updates are published quarterly.

Key performance indicators are specific to each area of the business:

Freda Rebecca

Key performance indicators include tonnes mined and processed, grade of material delivered to plant, gold recovery, operating costs per ounce produced, ounces of gold produced, financial performance and management of assets, health, safety and environmental incidents including lost time events due to injury.

Bindura Nickel

Key performance indicators in respect of the Trojan Mine includes tonnes mined and processed, grade of nickel delivered to the plant, nickel recovery, operating costs per lb., tonnes of nickel in concentrate within specifications, both in %MgO and moisture content. Other measures considered are financial performance and management of assets, health, safety and environmental incidents including lost time events due to injury. The remainder of the BNC operations remain on care and maintenance, and the key performance areas include maintenance and the operating integrity of all the assets and the financial performance against the care and maintenance budget.

Exploration projects

Key performance indicators include the addition of resource ounces in the case of Zani and the identification of drill targets at Semhkat.

Changes in share capital

Details of changes in the share capital during the year are set out in note 25 to the financial statements.

Creditor payment policy

Each operating company in the group is responsible for agreeing the terms of transactions, including payment terms, with suppliers and, provided that suppliers perform in accordance with the agreed terms, it is the group's policy that payment is made accordingly. Trade creditors of the group at 31 March 2013 represented 65 days (2012: 109 days) of annual purchases, including capital expenditure, and 30 days (2012: 34 days) for the group excluding BNC. As reported in the Financial Review on pages 11 to 14, BNC was on care and maintenance for half the year pending the financing for the planned restart of the Trojan mine. This together with the difficulty obtaining finance for BNC's continued restart activities has consequently severely restricted payments to its creditors.

Subsequent events

The post balance sheet events are described in note 34 to the financial statements.

Directors

The current directors of the company are as follows:

Executive directors

KK Mpinga Chief Executive Officer

DAR McAlister Finance Director

Non-executive directors

OAG Baring Chairman

YH Ning - appointed 7 June 2012

YC Hu - appointed 4 July 2012

SG Morris

JA Anderson

E Denis

JL Botha

Mr OAG Baring and Mr SG Morris are retiring by rotation and being eligible, offer themselves for re-election. Mr E Denis retires by rotation and will not offer himself for re-election.

The interests of the directors and their remuneration are described in the Directors' remuneration report which is on pages 24 to 30.

Major shareholdings 

The share register records that the following shareholders held 3% or more of the issued share capital of the company at 30 April 2013:

International financial reporting standards

The group has prepared its consolidated accounts for the year ended 31 March 2013 in accordance with International Financial Reporting Standards as endorsed by the European Union ("IFRSs").

Directors' and officers' liability insurance

The company has purchased Directors' and officers' liability insurance which remains in place at the date of this report.

Political contributions and charitable donations

Total contributions of $799,205 (2012: $138,700) were made during the year, $237,162 (2012: $60,000) as political contributions and $562,043 (2012: $78,700) as charitable donations.

Disclosure of information to auditors

The directors who held office at the date of approval of this Directors' report confirm that, so far as they are each aware, there is no relevant audit information of which the company's auditors are unaware; and each director has taken all the steps that he ought to have taken as a director to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

Auditors 

Our auditors, KPMG Audit Plc., has instigated an orderly wind down of KPMG Audit Plc.'s business. As a result, a resolution to appoint KPMG LLP as auditors of the company is to be proposed at the forthcoming annual general meeting.

By order of the Board:

B Tuck

Company Secretary

30 July 2013

Directors' remuneration report

Remuneration Committee

The Remuneration Committee comprising non-executive directors JA Anderson (Chairman), SG Morris and E Denis, reviews the performance of the executive directors and sets and reviews the scale, structure and basis of their remuneration and the terms of their service agreements, paying due regard to the interests of shareholders as a whole and the performance of the company.

In determining the remuneration of executive directors, the Remuneration Committee seeks to enable the company to attract and retain executives of the highest calibre. The Remuneration Committee also makes recommendations to the Board concerning the allocation of share options to employees. No director is permitted to participate in discussions or decisions concerning his own remuneration.

Remuneration policy

The policy on directors' remuneration is that the overall remuneration package should be sufficiently competitive to attract and retain individuals of a quality capable of achieving the group's objectives.

The remuneration policy is designed such that individuals are remunerated on a basis that is appropriate to their position, experience and value to the company.

The Remuneration Committee determines the contract terms, basic salary and other remuneration for each of the executive directors, including performance related share options, bonuses, pension rights and any compensation payments.

Executive remuneration package

The details of individual components of the remuneration package and service and employment contracts are discussed below.

Basic salary and benefits

The policy is to review salary and benefits annually against competitive market data and analysis, and adjust accordingly.

Bonus scheme

There is no formal bonus scheme in place. Bonus awards in respect of the year ended 31 March 2013 are set out in the directors' remuneration report.

Share options

The company has outstanding options under an unapproved Share Option Scheme adopted in 1997 (1997 Scheme) and a new scheme which was approved by shareholders at the company's annual general meeting on 31 July 2007 (2007 Scheme). Details of option awards made under these schemes are detailed in note 31.

1997 Scheme

Under the 1997 Scheme unapproved share options were granted to directors and employees by the Board. The company's policy on the granting of share options is to make such awards that are necessary to recruit and retain executives.

The company has operated this scheme since 1997 where options were granted to any employee, officer or director of the company or any subsidiary of the company. The limit for options granted under this scheme was not to exceed 15% of the number of issued ordinary shares from time to time.

The Board granted options at its discretion. The subscription price was fixed by the Board at the price per share on the dealing day preceding the date of grant.

These options vest immediately and may be exercised at any time within a seven-year period from the date of the grant, unless the Board determines otherwise. The options lapse if not exercised by the seventh anniversary of the grant. It was the Board's policy to spread the vesting period for options granted to employees over two to three years.

Unless the Board agrees otherwise, the right to exercise an option terminates on the holder ceasing to be a participant, subject to certain exceptions, which broadly apply in the event of death of the option holder or where the option holder ceases to be a participant due to retirement, ill health, accident or redundancy. In such a case, the option may be exercised within six months of such event provided such exercise will take place within seven years of the original date of grant.

2007 Scheme

The 2007 Scheme allows for awards of both tax approved options (approved options) to be made to employees resident in the United Kingdom and unapproved options (unapproved options), to be made to both resident and non-resident employees. The company's policy on the granting of share options is to make such awards that are necessary to recruit and retain executives. Details of option awards made under this scheme are detailed in note 31.

The company has operated this scheme since December 2007 where options may be granted to full-time employees and directors of the company or any subsidiary of the company. The overall limit for options granted under this scheme and any other employees' share scheme adopted by the company is, in any rolling 10-year period, 10% of the issued ordinary share capital (including treasury shares) of the company for the time being plus 8,100,000 ordinary shares. There is an individual limit of a maximum of ordinary shares to the value of £30,000 in respect of approved options.

Options may be granted when the Remuneration Committee determines, within 42 days of the announcement by the company of its full or interim results. Options may be granted outside the 42-day period if the Remuneration Committee considers there to be exceptional circumstances. Options must be granted subject to performance conditions being satisfied. The performance conditions must be objective and, save where the Remuneration Committee determines there to be exceptional circumstances, the performance conditions must relate to the overall financial performance of the company or the market value of ordinary shares over a period of at least three years. The performance conditions can be waived or amended by the Remuneration Committee if it determines that a change of circumstances means that the performance conditions cannot reasonably be met. No consideration is payable on the grant of an option and no option may be granted after 31 July 2017.

The Remuneration Committee determines the exercise price before the options are granted which cannot be less than the market value of the shares on the date of grant.

The options can be exercised only on or after the third anniversary of the date of grant provided the performance conditions have been satisfied or waived by the Remuneration Committee. The options lapse if not exercised by the 10th anniversary of the grant.

These options lapse when the option holder ceases to be an eligible employee. In the case of death, a participant's personal representatives may exercise his/her options within 12 months after the date of death. Where an option holder ceases to be an employee by reason of injury, disability, redundancy, the company that employs the option holder ceasing to be a subsidiary of the company, retirement, pregnancy or in any other circumstances determined by the Remuneration Committee, the options may be exercised within six months of the termination of employment or such longer period as may be determined by the Remuneration Committee.

Share incentives

The Share Incentive Scheme was approved by shareholders at the company's annual general meeting on 31 July 2007. The Share Incentive Scheme is designed to complement the Share Option Scheme to facilitate awards to selected executives and managers. The Share Incentive Scheme permits the award of any one or a combination of the following incentives:

·; the sale of ordinary shares on deferred payment terms;

·; share awards as part of a bonus scheme by way of nil cost options in consideration of cash bonuses forgone on terms that would be determined by the Remuneration Committee of the company; and

·; the issue of share appreciation rights either by the company or EBT (as defined below).

The company has also adopted an Employees' Benefit Trust (EBT) which will operate in conjunction with the Share Option Scheme and Share Incentive Scheme. The EBT has not yet been utilised for this purpose and there have been no awards under the Share Incentive Scheme since it was approved by shareholders.

Pensions

The company does not operate a pension scheme for executive directors but does, according to the director's preference, contribute to the personal pension plan of each executive director, or pays cash in lieu of such contributions up to a specified maximum of 12.5% of salary. No pension contributions are made in respect of non-executive directors. However, following agreement last year to terminate Mr Baring's service agreement as Executive Director, the company agreed to pay contributions to his personal pension plan for a period of twelve months to 30 September 2012.

Fees

The fees for non-executive directors are determined by the Board, having taken independent expert advice on appropriate levels, and are reviewed on an annual basis.

Service contracts

The service and employment contracts of the executive directors are not of a fixed duration and therefore have no unexpired terms, but continuation in office as a director is subject to re-election by shareholders as required under the company's Articles of Association. The company's policy is for executive directors to have service and employment contracts with provision for termination of no longer than 12 months' notice.

The non-executive directors do not have service contracts. Letters of appointment provide for termination of the appointment with up to three months' notice by either party.

Details of the current directors' contracts or appointment dates are as follows:

Directors' remuneration

The remuneration of the directors who held office during the year is as follows:

(1) Salaries for Mr Mpinga and Mr McAlister were increased in line with inflation with effect from 1 April 2012

(2) The fees payable to Mr Morris, Mr Anderson and Mr Denis were increased with effect from 1 April 2012 having not been reviewed since the dates of their appointment on 6 December 2005 in respect of Mr Morris and 27 February 2007 in respect of Mr Anderson and Mr Denis.

(3) Following his appointment as Non-Executive Director on 1 October 2011, Mr Baring was not paid a fee in respect of the twelve month period ended 30 September 2012. However, he was in receipt of benefits in kind during this period under the terms of the agreement last year to terminate his service agreement as Executive Chairman of the company. With effect from 1 October 2012 Mr Baring was in receipt of a fee and benefits in kind in respect of his role as Non-Executive Chairman.

(4) Discretionary bonus awards in respect of the year ended 31 March 2013 to Mr Mpinga and Mr McAlister recognised the successful achievements during the year of 1) Freda Rebecca Gold Mine meeting production target; 2) restructuring and refinancing Bindura Nickel Corporation in readiness for restart at Trojan mine; 3) increasing JORC compliant gold resources in the DRC; and 4) turning the business around to produce a group profit before impairments for the first time since the year ended 31 March 2007. In addition, Mr Mpinga was awarded 666,667 ordinary shares in Bindura Nickel Corporation ("BNC") on 24 September 2012 at a price of US 3 cents per share for NIL consideration under the BNC share issue in September 2012. These bonus payments were accrued but not paid at year-end. The Remuneration Committee, in recommending the bonuses to the Board, stipulated that the bonus was to be paid only when sufficient funds are available. Payment of the bonus will therefore be deferred until sufficient funds are available or made in shares, subject to agreement.

(5) The Board is of the view that the retention of high quality Non-Executive Directors is of great benefit to the company. A one-off bonus award was made in January 2013 to the Non-Executive Directors equivalent to their respective annual fee, the net of tax proceeds of which were utilised to subscribe for shares in the company. The bonus award was made to ensure independence and compliance with the UK Corporate Governance Code under which Non-Executive Directors are not permitted to hold share options. The share options previously awarded to the Non-Executive Directors have been cancelled. Mr Baring retained some share options awarded to him whilst in an executive capacity. Details of directors interests in shares and options in the company are summarised on pages 28 to 30.

(6) Benefits in kind relate to life and medical insurance and pension contributions for Mr Baring and Mr McAlister, and pension contributions and security services for Mr Mpinga.

(7) The fee is paid to Sapiensa Sprl, a company in which Mr Denis has an interest.

(8) Mr Y H Ning was appointed a director on 7 June 2012.

(9) Mr Y C Hu was appointed a director on 4 July 2012.

Contributions in lieu of director's pensions were as follows:

All contributions were either made to personal pension schemes of directors or accrued for future payment to personal pension schemes.

Directors and directors' share interests

The directors during the year and their beneficial interests at the year-end were as follows:

(1) Mr KK Mpinga controls the voting rights in Palanka Trust.

(2) Related to Mr KK Mpinga.

(3) Held through Mr OAG Baring's personal pension fund.

(4) Includes 454,545 shares held by Sapiensa Sprl, a company in which Mr Denis has an interest.

(5) Includes 242,424,282 shares held by China International Mining Group Corporation, a company in which Mr Ning has an interest.

(6) In addition to the shares in PLC, KK Mpinga also holds 666,667 shares in BNC. This equates to 0.06% in BNC.

Directors' share options

Aggregate emoluments disclosed above do not include any amounts for the value of options to acquire ordinary shares in the company granted to or held by the directors. Details of directors' interests in shares held under option are shown below:

Exercise price is the weighted average of all share options held based on the price at the grant date.

Presented from the date of appointment as a director.

No share options were exercised during the current or prior year.

The intrinsic values of all options which have vested during the year were $nil (2012: $nil).

No options have been awarded to directors between the year-end and the signing of these accounts.

The market price of the company's shares on 28 March 2013 was 4.625 pence per ordinary share and the highest and lowest share prices during the year were 6.945 pence and 3.5 pence respectively.

The agreements covering directors' options are available for inspection at the company's registered office: 43 Palace Street, London, SW1E 5HL. The company's register of directors' interests (which is also open to inspection) contains full details of the directors' shareholdings and options to subscribe.

Signed on behalf of the Board by:

OAG Baring

Chairman

30 July 2013

Statement of directors' responsibilities

To the shareholders of Mwana Africa PLC

The directors are responsible for preparing the Annual Report and the group and parent company financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare group and parent company financial statements for each financial year. As required by the AIM Rules of the London Stock Exchange they are required to prepare the group financial statements in accordance with IFRSs as endorsed by the EU and applicable law and have elected to prepare the parent company financial statements on the same basis.

Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and parent company and of their profit or loss for that period. In preparing each of the group and parent company financial statements, the directors are required to:

·; select suitable accounting policies and then apply them consistently;

·; make judgments and estimates that are reasonable and prudent;

·; state whether they have been prepared in accordance with IFRSs as endorsed by the EU; and

·; prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and the parent company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent company's transactions and disclose with reasonable accuracy at any time the financial position of the parent company and enable them to ensure that its financial statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the group and to prevent and detect fraud and other irregularities.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

On behalf of the Board:

DAR McAlister

Finance Director

30 July 2013

Statement of corporate governance

The directors support the principles of good corporate governance. While not mandatory for an AIM company, the directors have implemented, where practical for a company of this size and nature, certain provisions of the principles of good governance and code of best practices set out in the UK Corporate Governance Code. The disclosures presented herein are limited and are not intended to constitute a corporate governance statement as prescribed by the Disclosures and Transparency Rules or the Companies Act.

The Board has also considered the guidance published by the Financial Reporting Council concerning the internal control requirements of the UK Corporate Governance Code, in line with the Turnbull Report. The Board regularly reviews key business risks, via a number of properly constituted committees, in addition to the financial risks facing the group in the operations of the business.

The Board

The Board meets at least quarterly throughout the year. The Board is responsible for formulating, reviewing and approving the group's strategy, planning, budgets, acquisitions, risk, and environmental management.

The non-executive directors SG Morris, JA Anderson, E Denis and JL Botha are considered by the Board to be independent of management and free from any business or other relationship which could materially affect the exercise of their independent judgement. Mr YH Ning and YC Hu have an interest in the Group's largest shareholder China International Mining Group Corporation.

Directors have the facility to take external independent advice in furtherance of their duties at the group's expense and have access to the services of the Company Secretary.

The Board delegates certain of its responsibilities to the Audit, Remuneration and Nomination Committees under clearly defined terms of reference.

Audit Committee

The Audit Committee meets at least twice during the year and is responsible for ensuring that the financial performance of the company is properly reported on and monitored, and for meeting the auditors and reviewing the auditors' reports relating to the accounts. The committee also recommends the appointment of, and reviews the fees of, the external auditors. It meets once a year with the auditors without executive Board members present. The Audit Committee comprises at least three members, two of whom shall be non-executive. The current membership of the committee is Mr SG Morris (Chairman), Mr E Denis and Mr JA Anderson, all of whom are non-executive.

Remuneration Committee

The Remuneration Committee meets at least twice per year. It reviews the performance of the executive directors and sets and reviews the scale, structure and basis of their remuneration and the terms of their service agreements paying due regard to the interest of shareholders as a whole and the performance of the company. The Remuneration Committee comprises three non-executive directors, Mr JA Anderson (Chairman), Mr SG Morris and Mr E Denis. The directors' remuneration report appears on pages 24 to 30.

Nomination Committee

The role of the Nomination Committee is to recommend any new appointment of directors to the board, based on the merits of the candidates and the relevance of their background and experience. It periodically reviews the structure, size and composition of the Board.

The committee comprises at least three members, two of whom shall be non-executive directors. The committee is chaired by the Chairman of the Board, Mr OAG Baring. Mr SG Morris and Mr JA Anderson are the other non-executive members.

The nomination committee did not meet during the year. The appointments of Mr YH Ning and Mr YC Hu as non-executive directors were considered and approved by the full Board.

Internal controls

The directors have overall responsibility for the group's internal control effectiveness in safeguarding the assets of the group. Internal control systems are designed to identify and mitigate the particular type of business, operational and safety risks to which the group is exposed. Internal controls can only provide a reasonable, but not absolute assurance against material misstatements or loss.

The Board reviews the effectiveness of the internal controls through the Audit Committee and through executive management reporting to the Board. Business plans, budgets and authorisation limits for the approval of significant expenditure, including investments are appraised and approved by the Board. The Board also seeks to ensure that there is a proper organisational and management structure with clear responsibilities and accountability.

It is the Board's policy to ensure that the management structure and the quality and integrity of the personnel are compatible with the requirements of the group.

The company complies with rule 21 of the AIM Rules for Companies regarding dealings in the company's shares and has adopted a share dealing code to ensure compliance by the directors and applicable employees.

Shareholder Relationships

During the year the executive directors met frequently with shareholders and the investment community. This included formal road shows and presentations, one-to-one meetings, analysts meetings and press interviews. The chief executive officer and finance director regularly brief the Board on these contacts and relay the views expressed.

Anti Bribery and Corruption

Following introduction of the UK Anti Bribery & Corruption Act, the Board introduced a group policy in relation thereto. The Board takes a zero tolerance approach to bribery and corruption and will uphold all laws relevant to countering bribery and corruption in all jurisdictions in which the group operates. The Board expect the highest standard of personal and professional behaviour from all employees within the group and from external contractors and third parties working or performing services on behalf of the group. The Board will not tolerate any incidence of bribery and will take action against anyone employed within the group, or associated with the group, who commits bribery.

The group's policy on bribery and corruption has been communicated to all employees and contractors.

The Board has delegated oversight of the policy to the Audit Committee and has appointed the finance director to act as the group's anti bribery compliance officer.

The group regularly monitors and investigates all allegations of fraud and bribery and corruption and reports on all issues arising to the Board.

Independent auditor's report to the members of Mwana Africa PLC

We were engaged to audit the financial statements of Mwana Africa PLC for the year ended 31 March 2013 set out on pages 35 to 75. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the EU and, as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006.

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditor

As explained more fully in the Directors' Responsibilities Statement set out on page 30, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit, and express an opinion on, the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the financial statements

A description of the scope of an audit of financial statements is provided on the Financial Reporting Council's website at www.frc.org.uk/auditscopeukprivate.

Basis for disclaimer of opinion on financial statements

In seeking to form an opinion on the financial statements, we have considered the implications of the significant uncertainties disclosed in the financial statements concerning the following matters:

·; The Group's and the Company's ability to continue as a going concern; in particular, as disclosed in note 2 to the financial statements, the need to raise funds of at least $4m by October 2013, the substantial achievement of forecasts including the successful implementation of a significant cost savings plan, the uncertainties linked to gold price market conditions and political and indigenisation risks in Zimbabwe, and uncertainty regarding the availability of sufficient additional funding as may be needed to continue planned activities. These conditions, along with other matters explained in note 2 to the financial statements, indicate the existence of material uncertainties which may cast significant doubt as to the Group's and the Company's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the Group and Company were unable to continue as a going concern.

·; The carrying amount of investments in the Company relating to its Zimbabwean subsidiaries is $74.6m (2012: $71.5m) and these subsidiaries are consolidated in the Group financial statements. As disclosed in note 19, there are uncertainties linked to the implementation of the Indigenisation Law in Zimbabwe. The possible impact of this law is uncertain and represents a significantuncertainty which could adversely impact the Group and Company financial statements.The financial statements do not include the adjustments that would result from any impact of the Zimbabwe indigenisation legislation on the carrying value of the investment held by the company.

There is potential for the uncertainties to interact with one another such that we have not been able to obtain sufficient appropriate audit evidence regarding the possible effect of the uncertainties taken together.

Disclaimer of opinion on financial statements

Because of the significance of the possible combined effect of the uncertainties described in the Basis for disclaimer of opinion on financial statements paragraph above, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. Accordingly we do not express an opinion on the financial statements.

Opinion on other matter prescribed by the Companies Act 2006

Notwithstanding our disclaimer of an opinion on the financial statements, in our opinion the information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exception

In respect solely of the limitation of our work due to the possible effect of the uncertainties referred to above taken together, as a result of those circumstances the directors were unable to provide to usall the information and explanations that we considered necessary for the purpose of our audit.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

·; adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

·; the financial statements are not in agreement with the accounting records and returns; or

·; certain disclosures of directors' remuneration specified by law are not made.

Juliette Lowes (Senior Statutory Auditor)

for and on behalf of KPMG Audit Plc, Statutory Auditor

Chartered Accountants

15 Canada Square

London

E14 5GL

30 July 2013

Consolidated statement of profit and loss for the year ended 31 March 2013

The notes on pages 44 to 75 are an integral part of these consolidated financial statements.

Consolidated statement of comprehensive income for the year ended 31 March 2013

Consolidated balance sheet as at 31 March 2013