Quarterly Operations and Exploration Update

QUARTERLY UPDATE (JUNE QUARTER) 7 August, 2014 Mwana Africa PLC ("Mwana", the "Group" or the "Company") Quarterly Operations and Exploration Update - June 2014 Quarter Mwana Africa is pleased to provide an update on operations and explorationactivity for the quarter ending 30 June, 2014. Operational HIGHLIGHTS GolD - Freda Rebecca (Zimbabwe) 1% increase in production to 13,503oz (Q4 2014, 13,380oz), reflecting an 8%rise in head grade to 2.07g/t (Q4 2014, 1.91g/t) as a result of improvements inmain production block feed grade Recovery 6.2% lower at 76.8% (Q4 2014, 83.0%) due to temporary power supplyfailures at two absorption tanks Cash costs up 2% to US$1,078/oz (Q4 2014, US$1,053/oz) 4% drop in all-in-sustaining costs to US$1,283/oz (Q4 2014, US$1,324/oz) Slight improvement in average gold price received to US$1,310/oz (Q4 2014,US$1,302/oz) NICKEL - TROJAN NICKEL MINE (ZIMBABWE) Nickel in concentrate production 14% lower at 1,902t (Q4 2014, 2,207t) asunderground mobile equipment was taken out of commission for refurbishment anddue to mining of lower grade areas Head grade 6% lower at 1.5% (Q4 2014, 1.6%) Recovery down 4.7% to 84.1% (Q4 2014, 88.8%) Nickel sales 17% lower at 1,871t (Q4 2014, 2,250t) Cash costs rise 21% to US$13,750/t (Q4 2014, US$11,333/t) and all-in-sustainingcosts up 29% to US$15,750/t (Q4 2014, US$12,220/t) as a result of lowerproduction and refurbishment of equipment 26% increase in average nickel price to US$17,745/t (Q4 2014, US$14,075/t) Diamonds - Klipspringer (South Africa) 92% increase in production to 23,750 carats (Q4 2014, 12,383 carats) US$20 per carat average price received (Q4 2014, US$21 per carat) Steady-state production achieved at quarter-end EXPLORATION highlights GOLD - Zani-Kodo (dEMOCRATIC REPUBLIC OF CONGO - drc) 'Footwall' resource conversion drilling programme completed and resourcere-classification underway Copper/cobalt - SEMHKAT/Hailiang JV (dEMOCRATIC REPUBLIC OF CONGO - drc) The 2014 exploration programme is underway Kalaa Mpinga, CEO of Mwana, commented: "This quarter was mixed as various modifications intended to improve efficiencyat Freda Rebecca and Trojan Nickel has been undertaken and the result of thesechanges will not be reflected until our Q2 update. Modifications to improve theefficiency of the mills were undertaken at Freda Rebecca resulting in low millavailability whilst at Trojan Nickel, mobile equipment was taken out ofcommission for refurbishing impacting production. All the work undertaken wasnecessary as part of the equipment rebuild to pave the way for ramping up in Q2at Trojan Nickel and improved mill efficiency at Freda Rebecca which puts bothmines in a stronger position for Q2. Overall I am pleased to report that therewas a 8% increase in head grade at Freda Rebecca which we believe will besustained, commissioning continues at the Freda Rebecca's tailings retreatmentand Klipspringer continues to make progress. In DRC we are in the process ofreclassifying the resource at Zani-Kodo. We look forward to benefiting fromoperational improvements undertaken in Q1 during the current quarter." For further information please visit www.mwanaafrica.com or contact: Mwana Africa PLC Kalaa Mpinga, CEO Tel: +44 (0) 20 7654 5580 Caroline Mathonsi, Investor Relations Tel: +44(0) 20 7654 5595 Nominated Adviser and Broker Peel Hunt LLP Matthew Armitt / Ross Allister Tel: +44 (0) 20 7418 8900 Public Relations Russell and Associates Tel: +27 (0) 11 880 3924 James Duncan OPERATIONS GOLD: Freda rebecca gold mine (Zimbabwe) Quarter ending FREDA REBECCA MINE Jun 2014 Mar 2014 Dec 2013 Sep 2013 Tonnes mined (t) 370,755 282,078 217,287 308,663 Tonnes milled (t) 263,531 279,879 258,184 269,575 Head grade (g/t) 2.07 1.91 1.89 2.28 Recovery (%) 76.8 83.0 84.9 83.6 Gold produced (oz) 13,503 13,380 13,072 17,536 Average gold price received ($/oz) 1,310 1,302 1,255 1,330 Cash cost ($/oz) 1,078 1, 053 1,066 837 All-in-sustaining cost ($/oz) 1,283 1,324 1,291 1,053 Figures shown are unaudited and may vary upon final audit. Gold ounces producedincorporate gold released from or caught in 'lock-up' for each period. Cash cost per ounce sold includes costs for mining, processing, administration,accounting movements for stockpiles and gold-in-circuit, and, net proceeds fromby-product credits. It excludes capital costs for exploration, mine developmentor processing mill capital works, and, the cost of royalties. All-in sustaining cost reflects cash costs per ounce sold plus depreciation andamortisation, thus incorporating the capital cost of production, plus interest,other indirect costs and royalties. All-in sustaining cost represents all costsattributable to gold production over the period. COMMENTARY Production quarter on quarter was 1% higher at 13,503oz, reflecting an 8% risein head grade to 2.07g/t. This resulted from an improvement in main productionblock feed grade following block preparation during the December 2013 quarter.While tonnes mined increased by 31% to 370,755t, tonnes milled were 6% lower at263,531t due to the scheduled shut-down of Mill 2 to replace discharge grateliners. The Company further took the opportunity to replace feed end bearingsfollowing the modification to the mill lubes system completed in the previousquarter. Gold recovery was down 7%, reflecting the impact of a month-long temporarypower supply failure to two adsorption tanks due to faulty cables. While cash costs rose by 2% to US$1,078/oz, a consequence of the Mill 2 grateliners being expensed during the quarter, all-in sustaining costs were 4% lowerat US$1,282/oz. A new transformer for the Tailings Retreatment Project pilot plant section thathad to be returned to the manufacturers for repairs in the previous quarter hasbeen installed whilst the agitator drive designs have been upgraded.Commissioning of the pilot plant continues with pulp being introduced into thecircuit. Testing of the processing methods and evaluation of the configurationresults are ongoing. The average gold price received increased slightly to US$1,310/oz from US$1,302/oz. NICKEL: TROJAN NICKEL MINE (zimbabwe) Quarter ending TROJAN MINE Jun 2014 Mar 2014 Dec 2013 Sept 2013 Tonnes mined (t) 155,610 161,964 159,600 158,694 Tonnes milled (t) 148,882 153,451 133,221 154,552 Head grade (%) 1.519 1.621 1.730 1.597 Recovery (%) 84.1 88.8 87.5 88.6 Ni in cons (t) 1,902 2,207 2,016 2,117 Nickel sales (t) 1,871 2,250 2,651 1,505 Average nickel price ($/t) 17,745 14,075 13,870 13,787 Cash cost ($/t) 13,750 11,333 11,181 9,689 All-in-sustaining cost ($/t) 15,750 12,220 11,819 10,390 Figures shown are unaudited and may vary upon final audit. Average nickel price represents the average LME nickel price utilised under theterms of the Glencore offtake contract. Cash cost per tonne includes costs for mining, processing, administration,offtake costs and penalties, transport costs, accounting movements forstockpiles, and net proceeds from by-product credits. It excludes capital costsfor exploration, mine development or processing mill capital works, and, thecost of royalties. All-in-sustaining cost reflects cash cost per tonne plus depreciation andamortisation, thus incorporating the capital cost of production, plus interest,other indirect costs and royalties. All-in-sustaining cost represents all costsattributable to nickel production over the period. COMMENTARY Production of nickel in concentrate was down 14% to 1,902t due to a decline intonnes milled, in head grade and in recovery. Tonnes mined were 4% lower at155,610t due to the impact of underground mobile equipment being taken out ofcommission for refurbishing. This refurbishment forms part of an undergroundequipment rebuild programme to be completed by December 2014 which willfacilitate the development and production ramp-up planned for the second halfof the calendar year. Tonnes milled were 3% down as a result of the equipment refurbishment programmeand there was a 6% decline in head grade to 1.519% resulting from scheduledmining of lower-grade areas as per the existing mine plan. Recoveries were 5%down at 84.1%, resulting both from the lower head grade and higher MgO contentof the ore mined. A contractual limit on MgO in concentrate is achieved at theexpense of recovery and incurs penalties under the offtake agreement. Nickel sales were 17% lower at 1,871t due to lower production. However theaverage nickel price achieved for the quarter was 26% higher at US$17,745/t. Under the terms of the offtake agreement, BNC is entitled to a definedpercentage of the value of nickel contained in concentrate. Therefore, as thenickel price rises, both revenue and costs attributable to the agreementincrease. Cash costs rose by 21% to US$13,750/t while all-in-sustaining costswere 29% higher at US$15,750/t, of which 17% was due to lower production andthe increased costs associated with the refurbishment of the underground mobileequipment, whilst 11% was attributable to offtake-associated costs. DIAMONDS: KLIPSPRINGER (South Africa) Quarter ending KLIPSPRINGER MINE June 2014 Mar 2014 Dec 2013 Sept 2013 Tonnes treated (t) 40,350 16,000 7,000 0 Diamonds produced (carats) 23,750 14,150 6,110 0 Head grade (cpht) 58.9 88.4 87.3 0 Recovery (1) (%) 99.7% 99.8% 98.3% 0 Diamond sales (carats) 20,410 12,383 2,950 0 Average diamond price ($/ct) $20.00 $21.03 $21.85 0 (1) Ratio of Run of Mine (ROM) diamonds delivered to diamonds in stock (DIS) aftersieving, cleaning and sorting. COMMENTARY The Klipspringer Slimes Retreatment Project, started on 7 October, 2013,continued to make steady progress during the quarter under review.Modifications to increase throughput in the previous quarter have provedeffective. Changes to the recovery section, which include the introduction of athird pass grease table, are expected to increase the recovered gradesignificantly in Q2. Late rainfall in April forced mining operations to drier and lower grade partsof the slimes resource. In spite of this causing a drop in the head grade, theproject still managed to increase diamond production by 68% to 23,750 caratsover the quarter. Two sales took place during the quarter and an average selling price of $20/ctwas achieved. Exploration Gold: Zani-Kodo (Drc) As part of feasibility work underway at Kodo Main, a resource conversiondrilling programme has been completed, as has a geotechnical drillingprogramme. The geotechnical core logging is underway. Regional fieldinvestigations continue. Copper/Cobalt: SEMHKAT/HAILIANG JV (drc) The 2014 exploration programme has advanced during the quarter and drilling andother field work (geochemistry, geophysics, mapping) are underway on several ofthe targets identified from the 2013 field season. About Mwana Africa PLC Mwana Africa PLC is a pan-African, multi-commodity mining and developmentcompany. Mwana's principal operations and exploration activities involve gold,nickel, copper and diamonds in Zimbabwe, the Democratic Republic of the Congo(DRC), South Africa, Angola and Botswana. In Zimbabwe, Mwana Africa's interests are the Trojan and Shangani nickel mines,and the Freda Rebecca gold mine. Mwana's nickel and gold projects includeHunter's Road and Maligreen, with the Makaha deposit being a gold explorationprospect. The Freda Rebecca gold mine in Zimbabwe restarted operations in 2009 and in the12 months ending March 2014, produced 58,704 oz of gold. The Trojan nickel mine is owned by Mwana's Zimbabwe subsidiary, Bindura NickelCorporation (BNC). After a four year period of being under care andmaintenance, in 2012 BNC carried out a US$23m restructuring andrecapitalisation programme which allowed it to restart the Trojan mine. Thefirst sale of concentrate to Glencore took place in April 2013. In the DRC, Mwana Africa has exploration programmes in Zani-Kodo (gold),Katanga (copper) and a 20% stake in Société Minière de Bakwanga (MIBA) -(diamonds). Copper in the Katanga Province - Mwana has a Joint Venture Agreement withZhejiang Hailiang Company Limited to jointly explore some of these licensedareas. The Katanga concessions are otherwise known as SEMHKAT (Sociétéd'exploration Minière du Haut Katanga). The joint venture Zani-Kodo project has a gold mineral resource of 2.97moz. Klipspringer diamond mine is Mwana's South African interest. Mwana holds a69.77% interest in Klipspringer, which is currently on care and maintenance butinvolved in a tailings retreatment project and investigating the viability ofunderground mining.