reports
Update: Board recommends rejection of EGM resolutions
Mwana has called an EGM for 9 June 2015 in response to a requisition by shareholders representing 5% of the share capital of the company. Inter alia, the requisition seeks to remove Ngoni Kudenga, Herbert Mashanyare, Stuart Morris and Johan Botha as directors of Mwana and to replace them with Scott Morrison, Mark Wellesley-Wood, Olivier Barbeau and Anne-Marie Chidzero. None of the proposed directors have been subject to due diligence by Peel Hunt, and such a peremptory change could, in our view,...
Update: Q415 update
Production and (implied) revenues for Q415 were greater than our expectations at both Freda-Rebecca (FRGM) and Trojan. In addition, Trojan costs were lower, as a result of the effective conclusion of the mobile equipment refurbishment plan, with the result that we have increased our FY15 earnings estimate by 30% from US$3.4m to US$4.4m.
Update: Q3 update and US$20m bond closure
Q315 operations were affected by a combination of exogenous (eg weather, holidays and metal prices) and endogenous (eg reagent quality and equipment availability) factors. As a result, both grade and metallurgical recoveries came under pressure at Freda-Rebecca and Trojan, causing us to revise our FY15 estimates. Mill throughput at FRGM increased to a post-restart record however. In addition, last week, Mwana successfully closed its fully subscribed US$20m bond offer to fund the Bindura smelter ...
Update: Bringing it all together
Mwana’s (MWA) interim results for the six-months from 1 April to 30 September were slightly ahead of our expectations and in line with forecasts for the full year. Both producing mines (Freda-Rebecca and Trojan) continue to generate operating profits and, all other things being equal, our net earnings forecasts for FY15 have increased 1.2% in the wake of H115 figures.
Update: Record throughput at FRGM; Trojan solid
Mwana’s operating performance in Q2 and H1 was closely in line with Edison’s expectations in the aftermath of its AGM statement in September. As a result, forecasts for the full-year remain substantially unchanged ahead of interim results expected in early December. In the meantime, with BNC shares trading at US$0.07 on the ZSE, we estimate that Mwana’s holding in BNC is worth US$64.8m against MWA’s EV of just US$42.4m.
Update: Zimbabwe lowers metals tariffs
Mwana Africa (MWA) has released an AGM statement updating the market on its operating performance so far in Q215 (see below). In addition, the Zimbabwean finance minister, Patrick Chinamasa, has responded to concerns in the industry by reducing royalties on gold producers from 7% to 5%, which should be worth US$25-26/oz in C1 costs for Freda-Rebecca.
Update: Refurbishments set up stronger H2
Notwithstanding the immediate share price reaction, overall Q1 operating performance at Trojan was generally better than our expectations (eg grade and cash costs). We have adjusted our FY15 estimates and although forecast EPS has declined by 0.77c, the decline can be primarily attributed to a reduction in the forecast gold price from US$1,457/oz for CY14 to US$1,300/oz for the balance of the year and a fall in the nickel price from US$19,350/t to US$18,505/t.
Update: Hotting up
Basic EPS for FY14 was 13% above our expectations, aided by record production of 7,027t Ni in concentrate at Trojan and record throughput at Freda-Rebecca. Nevertheless, the dominating features of the results were the US$28.0m reversal of the previous year’s impairment of Mwana’s interest in BNC and the decision to implement an accelerated restart of the Bindura smelter (see below).
Update: Smoking!
On 10 June, Mwana Africa announced that, based on the results of an independent study by Hatch Goba, its 76.3%-owned subsidiary, Bindura Nickel Corporation (BNC), plans to return its smelter to operation in H115. In order to process Trojan’s concentrate (which is relatively high in MgO), the smelter will initially run at 66.6% capacity. However, in the longer term the restart pre-positions BNC to open the Hunters Road mine and/or to adapt the smelter to upgrade third parties’ platinum group ...
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