Operations and Exploration Update

24 October 2013

Mwana Africa PLC

("Mwana" or the "Company")

Quarterly Operations and Exploration Update - September 2013 Quarter

Mwana Africa PLC is pleased to provide an update on operations and exploration activity for the quarter ending 30 September 2013.

Freda Rebecca

· 17,536 ozs of gold production from Freda Rebecca, representing an increase of 19% over the previous quarter.

· C1 cash costs of US$837/oz for the quarter down from US$949/oz in the previous quarter.

· Recoveries of 84% were achieved, being the highest average recoveries to date in 2013.

· Leach Tank 3 construction was completed and successfully commissioned on 1 August 2013.

· Construction of the Pilot Plant for tailing retreatment successfully completed during the quarter and commissioning underway.

Zani Kodo

· An updated resource statement was completed during the quarter and announced post period.

· The total combined JORC compliant gold resources now stands at 2.98Moz at 2.43g/t (based on a cut-off grade of 0.5g/t), an increase of 13% to the February 2013 resource update.

· The drilling campaign was put on hold during the quarter, however positive assay results from previous drilling were received, key mineralised intercepts included:

o 16m at 6.77g/t Au from 400m (KDODD100)

o 17m at 3.75g/t Au from 161m (ZNSDD117)

Katanga Copper Hailiang JV

· Completion of planned geophysical and geological mapping surveys.

· A number of high priority targets were identified during the quarter, which will require follow-up exploration.

· Reverse circulation drilling campaign underway at Lunsano.

Bindura Nickel Corporation

· Nickel in concentrate sales of 1,505 tonnes from Trojan, representing an increase of over 119% compared to the previous quarter.

· Recoveries of 88.6% were achieved, up from 69.7% in the previous quarter.

· C1 costs of $9,689/t were achieved, down from $19,251/t in the previous quarter.

· Operations continued to perform well following the Trojan restart and underground production was ramped up, resulting in a 38% increase in tonnage over the previous quarter.

· The Trojan mine plan was revised during the quarter to target the higher grade zones of the ore body following an internal review by BNC management as a result of the soft nickel price. Mining the higher grade zones of the ore body will reduce the cost per tonne of nickel produced.

Kalaa Mpinga, CEO of Mwana, commented:

"Operationally, this has been a very pleasing and positive quarter for the company. At Freda Rebecca, the Company has enjoyed a significant 19% uplift in gold production compared to the previous quarter.

"Once again Zani Kodo continues to demonstrate its substantial potential, following yet another upgrade of its gold resource. While at Trojan, the BNC team completed a new mine plan to maximise returns and improve cashflows by targeting the higher grade "massive" zones. The results thus far have been very pleasing with record production months being recorded in this quarter. SRK has also confirmed that the new mine plan is "realistic and achievable" and I would personally like to thank all those involved for their considerable efforts.

"In conjunction with these operational achievements, the Company has successfully planned for and executed a strategy to de-risk the Company's future development following the implementation of a number of cost saving initiatives and two share placings. The company is now stabilised and able to focus on delivering value on all of our projects."

For associated maps (Figures 1, 2, 3, 4, 5, 6, 7 & 8), please click on, or paste the following link in to your web browser, to view the PDF file:

http://www.rns-pdf.londonstockexchange.com/rns/2561R_-2013-10-23.pdf

For further information 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.

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 October 2013, Mwana announced that the gold mineral resource at its Zani Kodo project in Democratic Republic of Congo had increased to 2.975 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.

The restart of operations at The Trojan Nickel Mine (owned by Mwana's Zimbabwe subsidiary Bindura Nickel Corporation ("BNC")) followed four years during which all of the BNC assets were on care and maintenance. In September 2012, BNC carried out a restructuring and recapitalisation involving 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.

Freda Rebecca Gold Mine

A total of 17,536 ozs of gold was sold during the quarter ending September 2013. C1 operating costs decreased by 12% over the previous quarter. 

Table 1: Summary of Freda Rebecca Quarterly Production Results

Figures shown are unaudited and may vary upon final audit. Gold ounces produced incorporate gold released from or caught in 'lock-up' for each period.

C1 Cash cost includes costs for mining, processing, administration, accounting movements for stockpiles and gold-in-circuit, and, net proceeds from by-product credits. It excludes capital costs for exploration, mine development or processing mill capital works, and, the cost of royalties.

C2 Production Cost reflects C1 costs plus depreciation and amortisation, thus incorporating the capital cost of production.

C3 Total Cost reflects C2 plus interest, other indirect costs and royalties. Total cost represents all costs attributable to gold production over the period.

Gold production increased 19% compared to the previous quarter as a result of increased mill throughput and improved recoveries. Whilst throughput and recoveries are improving, these remain key areas of focus for further improvement. Leach Tank 3 construction was completed and successfully commissioned on 1 August 2013.

The head grade for the quarter was on budget, although there was a slight decrease on the previous quarter. The improved recoveries for the quarter were a result of improved leaching efficiencies and the increased residence time due to the completion of tank 3.

Ore production during the quarter was sourced from underground and from the Promoter Open pit. Total rock moved from underground was 102% of plan for the quarter and total run of mine ("ROM") was above target by 6,196t. Underground development and longhole drilling performed in line with the plan for quarter. 

Construction of the Pilot Plant for tailings retreatment is complete and has entered the commissioning phase. Commissioning is expected to be complete during the forthcoming quarter.

Further information about Freda Rebecca Gold Mine can be found at:

www.mwanaafrica.com/operations-and-exploration/zimbabwe/freda-rebecca-gold-mine

Bindura Nickel Corporation

As announced on 13 August 2013, Bindura Nickel Corporation ("BNC") concluded an internal review of a new mine plan for the Trojan mine and commenced implementation of this mine plan during the quarter. The Trojan mine plan has been revised to target the higher grade zones of the ore body, known as "massives". The occurrence of the massives enables higher grade ore to be mined and thus reduces the cost per tonne of nickel produced.

Following the quarter end, on 7 October 2013, Mwana announced the completion of a competent person's review by SRK Consulting (UK) Limited ("SRK") of BNC's business plan for operations at Trojan. SRK reviewed the updated mine plan targeting the higher grade ore zones in the early years of production at Trojan. SRK concluded that the plan is realistic and achievable and enabled BNC to update its Ore Reserves statement to total proven and probable reserves of 3.168Mt at an average grade of 1.04% for 32,975 tonnes of nickel, a 28% increase to the previously reported Trojan reserves as at 31 March 2010 of 25,810 tonnes of contained nickel.

Operations at Trojan progressed very well during the quarter. Underground production continued to ramp up resulting in a 38% improvement in hoisted tonnage compared to the previous quarter. In August, production of ore commenced from the higher grade massive sulphide portion of the ore body resulting in an improved grade to the mill. The milling and concentrator section performed well during the quarter and handled the increased volume with no incidents of note. Recoveries improved in line with the increased head grade.

Measured since production began at Trojan in 1968, BNC achieved record nickel production levels in August (714t of nickel in concentrate) and again in September (993t of nickel in concentrate).

Table 2: Summary of Trojan Quarterly Production Results

Figures shown are unaudited and may vary upon final audit.

Average Nickel Price represents the average LME nickel price utilised under the terms of the Glencore offtake contract.

C1 Cash Cost includes costs for mining, processing, administration, offtake costs and penalties, transport costs, accounting movements for stockpiles, and net proceeds from by-product credits. It excludes capital costs for exploration, mine development or processing mill capital works, and, the cost of royalties.

C2 Production Cost reflects C1 costs plus depreciation and amortisation, thus incorporating the capital cost of production.

C3 Total Cost reflects C2 plus interest, other indirect costs and royalties. Total cost represents all costs attributable to nickel production over the period.

Nickel in concentrate sales at 1,505 tonnes showed an improvement over the previous period. The achieved head grade and recoveries resulted in a C1 cash cost below $10,000 per tonne nickel, also a big improvement relative to the previous quarter. As ramp up continues at Trojan a key area of management focus is improving equipment availability. This challenge is being addressed as the cash situation improves thanks to the new mine plan and through the retraining of existing employees as well as hiring new skills.

Further information about Bindura Nickel Corporation can be found at:

www.mwanaafrica.com/operations-and-exploration/zimbabwe/bindura-nickel-corp-bnc

Zani-Kodo JV

No drilling was carried out during the quarter. District and regional scale mapping is ongoing.

A resource update was completed and announced just after the quarter end on 2 October 2013.

Kodo Downdip Extension

Results from the final three holes at the Kodo downdip extension were received during the quarter and are summarised in Table 3.

Table 3: Results received during September 2013 Quarter, Kodo area

The location of results is shown in Figure 1 and indicates further down-dip continuity of the high grade zone at Kodo. The broad mineralised zone remains completely open at depth (Figure 2). 

Lelumodi North

The first results from drilling at the Lelumodi Northern extension were received during the quarter. Results are summarised in table 4 with locations shown in Figure 3.

Table 4: Results received during September 2013 Quarter, Lelumodi North area. N.B. Only intersections >2.0gm shown

The results show that the broad mineralised zone associated with felsic volcanic units has been successfully identified in this area, with a best intersection of 43m @ 2.12g/t. A strike extension of 150m extending from the main Lelumodi zone is present. To the north the zone appears to be offset by a NE trending fault but is anticipated to extend further in this area.

Resource Update

A resource update was completed during the reporting period. This included updates to the Kodo Main and Lelumodi areas as well as a maiden resource for the Lelumodi North area. 

The updated resource is shown in Table 5, with the location of sub-areas shown in Figure 4.

Table 5: Zani Kodo JORC compliant Resource

Highlights are:

§ Overall resource increased by 13% to 2.975Moz

§ Indicated resource increase of 16% to 0.634Moz

In accordance with the transition towards JORC 2012 requirements, a fourth (Exploration Target) classification has been introduced for additional deep extensions at Zani Kodo and strike extensions at Lelumodi North. This Exploration Target is not included in the resource numbers in Table 5

Based on the excellent geological continuity at Kodo this projected target is anticipated to be in the range of 1.3 to 2.3Mt at an average grade of 3 to 4g/t (Note: Figures are expressed as ranges to reflect uncertainty in the estimate.) 

At Lelumodi North excellent geological control is also present and given the open ended nature of the mineralized zones, Exploration Target estimates for the area have been defined. This target is anticipated to be in the range of 1.5 to 3Mt at an average grade of 2 to 2.5g/t (Note: Figures are expressed as ranges to reflect uncertainty in the estimate).

Additional drilling is required to upgrade the Exploration Target to JORC compliant resource status.

Further information about Zani Kodo can be found at:

www.mwanaafrica.com/operations-and-exploration/drc/zani-kodo-project

Katanga Copper

Hailiang Joint Venture Exploration Joint Venture Highlights

· Huakuan and Inner-Mongolian (Hailiang subcontractors) completed the planned geophysical and geological mapping surveys for the second phase programme. SinoMine (subcontractor of Hailiang) is still active on its geophysical and geological programmes.

· A targeting exercise utilising geochemistry-geophysics-geology studies has defined high-priority targets for follow-up exploration.

· On Lutobwe a significant thrust-hosted massive to replacement hydrothermal magnetite alteration zone (7km long strike averaging 300m width) with a strong cobalt response (Niton quick assay) has been discovered. This discovery needs to be confirmed by laboratory assays.

· Reverse Circulation ("RC") drilling at Lunsano has started.

The phase 2 work programme commenced on 15 July 2013. The programme has been executed by three Hailiang subcontractors (i.e. Huakuan, Inner Mongolian and SinoMine) and the SEMHKAT technical team as a short-term sub contractor. To the end of September, the work completed is as follows:

Huakan Group

Geophysics:

The geophysical surveys done by Huakuan by the end of September include:

· Lunsano : 1:10k ground-mag grid 40 sq km

1:10k Induced Polarisation ("IP") grid 59.7 sq km

· PR758 (Kitemena East): 1:10k IP grid 3.9 sq km

· PR740 (Kibolwe) : 1:10k IP grid 10 sq km

· PR975 : 1:10k IP 13.6 sq km; 8 IP sounding points

· PR751 : 1:10k IP grid 3.3 sq km

· PR768 : 1:10k IP grid 3.3 sq km

Geology:

The technical work completed by Huakan is summarised in Table 6:

Table 6: Statistics on Huakan technical programme

Inner Mongolian

The technical work completed by Inner Mongolian is summarised in Table 7:

Table 7: Statistics on geophysical and geological surveys by InnerMongolian for the 1st and 2nd phase

SinoMine

SinoMine conducted geophyical and geological surveys on PR753 and PR774, which comprise ground-mag and IP, and geological mapping. Hailiang reported that SinoMine had finished a 15km² combined surveys on PR753, and are expected to complete all the field work before the onset of the rain season.

SEMHKAT 

SEMHKAT commenced an exploration programme during this quarter for Lutobwe (PR779), Lombe (PR738), Kapande (PR763) and Mifumbi (PR 760) on a subcontract basis. The work involved soil, trench and pit geochemical surveys, regional geological mapping, sample preparation and Niton analysis of samples. The Lutobwe work programme was completed by end September.

Lutobwe (PR779)

Geological mapping

Regional geological mapping outlined units of meta-conglomerate (Ki), sandstone (R4), shale (R4) and magnetitic shale (ironstone) generally truncated by NW-SE structures. The units have a regional dip to the south and the area forms part of the northern limb of a major fold nose with an E-W trending fold axis (Figure 6). The rock units have been subjected to brittle-ductile deformation accompanied by Fe-metasomatism and silicification. The repeated thrusting has yielded alternating units of Grand Conglomerat and shale with consequent potential for duplication of possible orebodies (Figure 6).The thrusted Grand Conglomerat-shale contact zone consists of a argillaceous shale with bands of pervasive magnetite replacement and quartz veins. The magnetite and quartz are of hydrothermal origin and have been injected into the thrust contact zone between Grand Conglomerat and shale.This alteration zone is 7km long and 300m wide.

Niton results

A combined total of 1042 samples were prepared and analysed by Niton hand-held HRF.

Soil geochemistry results

The Niton results of Cu, Co and Fe were plotted on plans using computer generated geochemical ranges (Figure 6). The 494 soil samples analysed gave relatively low and diffuse copper values compared to cobalt which gave very high values. The copper values are slightly displaced to the south of the cobalt results on the Fe-halo and both Cu and Co content in the soil are thrust-associated (Figure 6 A&B). Despite the Niton's unreliability on Co detection, the consistently high Niton values form a pronounced trend superimposing the magnetitic shale (Figure 6 A&B). This observable trend warrants analysis by a certified and reputable laboratory.

The copper and cobalt values associate strongly with Fe-metasomatism (Fe-halo), aero-magnetics and thrust faulting (Figure 6 A&D).

The copper and cobalt values are furthermore associated with low to moderate resistivity (moderate conductivity) (Figure 7 A&B) and moderate to high chargeability (Figure 7 C&D).

Trench geochemistry results

Trench samples with high Niton cobalt values (peak value of 2969.87ppm) associated with magnetitic shale will be sent for verification to ALS Chemex in October.

Recommendations

ICP analysis, fire assay for Au, petrographic studies and detailed geological mapping coupled with trenching and pitting wil comprise part of a follow-up programme.

Targeting Exercise

A targeting exercise has been conducted. The targeting criteria include:

· Favorable lithology and structures from both Gecamines regional mapping and prospect-scale mapping by SEMHKAT;

· Historical soil geochemsitry results;

· Recent IP and ground-mag geophysical survery results.

Lunsano

Eight targets have been delineated at Lunsano (see Figure.8 and Table 8)

Table 8 Description of combined exploration targets generated in the second phase programme, Lunsano

The other important targets are sumarised in Table 9:

Table 9: Description of combined exploration targets generated in the 2nd phase programme

Klipspringer Diamond Mine

Significant progress has been made since the agreement between the Klipspringer JV and Greenhurst Mining and Exploration (Pty) Ltd to retreat the Marsfontein slimes dam at the Klipspringer Mine was announced on 28May 2013.

Site preparation, construction of the processing plant and erection on site was completed by the end of September. Commissioning of the plant is also complete and the first tailings material was processed through the plant on 10 October. The plant is currently operating on three shifts per day and a steady ramp up of production is under way. It is expected that throughput of 50 tons per hour will be achieved before the end of October. At steady state the plant will process 22,560 tons of slimes material per month at a grade of 0.89 carats per ton. Gemcore Sampling (Pty) Ltd is the operator for this operation and is responsible for the mining and processing of the slimes material.

- ENDS -