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hTTp://thezimbabwemail.com/mwana-africa-in-advanced-funding-talks-over-13mln-loan-for-bnc-smelter/ . The permit for the emissions apparently is a given because the smelter plan includes new equipment to substantially reduce emissions from the plant. All appears to be very much on track although the management are struggling to communicate exactly where the savings are coming from. It is clear that the costs involved in transporting hundreds of thousands of tons of concentrate out of Zimbabwe to Asia is huge. Then there is the fine that BNC pay for the deletion of the material that will no longer be applicable with the smelter. The current deal pays Glencore 35% of the market price at the point of sale which will be reduced probably to 15% for the sale of the alloy. There is also the potential for processing third party material which will be on a cash tolling basis.

I think the Nickel is a given and the plans they are building to now will make Nickel robust even back at $14000 a ton and superb at $20000 a ton. I think the challenges and potential lay in Freda Rebecca' scale needs to be proven at that site. Edison talk of lower production costs with scale and I suspect they can get all-in below $1000 oz with a modest and factored increase in scale and minimal investment/timeline. The figures could look much better with money spent on a 3rd mill or the full scale tailings plant. Clearly further potential with Klipspringer; even just covering the care and maintenance costs will have a massive impact on the figures but re-opening underground could add substantial cash income. The offering is so exciting it is bizarre to see the way the market stagnates.

Again another day of low volume and a dripping share price. The BIND AGM went without incident; all resolutions passed as expected. The ZSE still holding firm at 9.25 US cents a share for a market cap of $111m; of which MWA hold 76.3% or £51.3m against a £37m market cap of MWA. An item in the Zim press yesterday reports the works on the smelter are in full progress and finance talks are in an advanced stage. Little risk here as they have the option to finance in full in-house from the Nickel profit. Mpinga says he expects to produce and sell about 2000 tons of Nickel this quarter whilst work is on-going on the plant. They are expecting a stronger H2 production performance. The current quarter ends at the end of September so I suspect that figure will be quite accurate and BNC will profit by about $7m this quarter. Mpinga also states that they expect to be producing at the smelter at the end of the first quarter in 2015. I take that to be at the end of FY end of March which is about right for the seven and a half month work schedule. The smelter will radically enhance the profit margin by slashing costs per ton.

Another day of low volume drippy selling that disproportionately impacts the share price. BIND.ZW firm again today and nothing from the AGM. The market cap is just madness now.

Yes pathetic still a couple of chunky sells or "giveaways" as I suspect they will be. I see MWA as in a quiet period right now. The BNC AGM is tomorrow; MWA AGM is 10th September and the current quarter has five weeks to run. Hopefully we will get some insight at the AGM how this quarter is progressing and a definitive on the timeline for the smelter. The is news to come from Klipspringer and the DRC both gold and Copper so plenty to look forward to.

http://www.edisoninvestmentresearch.com/research/report/mwana-africa23

Came to me by e mail as always.

commentary out today

It would be good to get an update on the works to the smelter for the restart early next year. The long lead materials and equipment should be sorted by now so they should be able to pin the timeline down. Clearly it will be too late to impact this financial year as the works are likely to complete February or March but it should add some real visibility to FY 2016.

It all makes little sense but that is often the way of these things. I believe MWA need to prove they can emerge from the ramp up at Trojan with some really strong production figures and MWA must show they can make money at Freda Rebecca. There is no point in producing 14000 ozs a quarter if there is no profit. They need to produce 16500 ozs to make it worthwhile. A plan to stop FR drifting is required. The answer may well be the tailing operation that is currently testing a pilot plant on-site or it could be a third mill. They showed last month they can mine enough for a third mill.

I thought they covered most of that in the release. "This refurbishment forms part of an underground equipment rebuild programme to be completed by December 2014 which will facilitate the development and production ramp-up planned for the second half of the calendar year" I don't think they would want to be discussing too much about the finance required whilst delivering news about income less than hoped. The Q2 figures could have some impact from the programme; this is the reality of the restart. I suspect we will find the same problems with the smelter. It is good that they are upgrading the equipment but it is a double blow with the costs and the lost production. I am really comfortable about the investments, the management and the progress but that does not stop feelings of frustration.

I will be going. My first day of leave following my current assignment and I get free travel so it would be rude not to go. Just waiting on my letter of holding from iii. It is important to meet the characters; I have been to many AGM's over recent years and they are very worth while so I would encourage anyone who can make it along to make the effort. There will likely be a presentation and an opportunity to raise any points after.

Given the returns from the Nickel and the value of the assets at BNC the Zimbabwean valuation looks well placed to me. It will have to increase by multiples when smelter comes online towards the end of this financial year. The smelter will start contributing in FY2016 (after end of March 2015). In mining terms that is super rapid. In the meantime the Nickel is pulling in about $4000 a ton clear profit.

is not a bad way to be after the ups and down of the last few weeks. Very low volume again.

It is not just the raw Zim stock exchange valuation where the issue is, there is also the profit to consider. Some of that profit will now be deferred to pay for the smelter, then you have the physical value of the smelter to consider; that is not represented in the $111m valuation and will be multiples of that valuation. Zimbabwe is back at the verge if financial crisis but given that we do not have the inflation at one billion percent like previous. The biggest factor is the USD in Zimbabwe which has brought stability in crisis but is now becoming very rare on the streets. Interesting times. I feel sure that if they can show what a clean technical quarter looks like the SP will continue this journey very swiftly. Is anyone attending the AGM.

Another disappointing day with the SP dripping down on very low volume. BIND.ZW remained static today after the recent rises and MWA remains at a £10m discount to the listed value of the MWA share of the subsidiary. Crazy stuff and a situation that cannot last. The true value to MWA is the income from Nickel which is remaining extremely stable, providing huge returns. I still believe we need one decent quarters production to light this share up.

Makes me wonder why there are absolutely no trades.

MWA are now at a £10m discount to their stake in BIND.ZW. The stake in BIND.ZW should realistically equate to 50-60% of the AIM valuation of MWA as a group. All makes no sense; that's the AIM. It will be interesting to see if the share price picks up the trend.

No mistake I am also talking about an absolute on the floor valuation based on material assets and a reasonable performance now not at some point in the future. You have projected forwards assuming substantial issues at both mines however there is just no reason to assume they will not reach their very modest targets. The value for the smelter and the refinery is assumed as it stands so I do not see how much more on the floor I can get. However it is a pointless conversations simply because the valuation is that of the AIM and no matter what we say it will take time to reach any reasonable current valuation let alone anything for froth in the share. In fact it may never reach a reasonable valuation and could always be retarded or underwritten as I prefer to regard it.

your assumption regarding BIND.ZW does assume that two of the next three quarters are fraught with more technical issues and maintenance because the $4m-$5m will be exceeded simply by the increase in average Nickel values from $17750 to what must be $18500. The economy of scale at BNC is not quite as transformational as it is at FR because of the static cost per ton to ship but it will drive down costs substantially and create a much more attractive margin. The steady state is $8m and that should be the minimum they achieve if they are to meet their goals. Lots of people work at the mine and more importantly in positions of knowledge within the management team so I suspect the Zim stock exchange is quite an accurate indicator and we are currently half way through Q2 with the SP rising. I am not sure that is jam tomorrow as the sales will be going out on a regular basis and that jam will be entering the company on an ongoing basis to fuel the restart however we have to wait another 8 weeks to know how much jam we had. When looking at value for BIND.ZW you have to include the raw value of the smelter minus the $26.5m and the value of the refinery on care and maintenance. In any estimation they have to be worth $250m-$500m on the cost of replacement; how much would a Platinum producer pay to take them over and convert. I suspect Mpinga is being very conservative in his 17 cent BIND.ZW valuation simply not to look like a nutter; I have no fear of that! The margins at FR are tight currently but it would take very little to turn that around and that work is ongoing. As an asset it must be worth $100m if they were to list it separately in Zimbabwe; 85% is MWA. The DRC gold; I suspect any third party partner to production would have to commit $20m to the project to take a 50% interest. I do struggle with any valuation as it makes no sense but there is no argument that the current valuation is a long way from a reasonable level and this SP will only trend in one direction. It is just a matter of holding one's nerve as the profits mount.