Asa Resources Regulatory News (ASA)

3 Apr 2006 07:02

Mwana Africa PLC03 April 2006 Mwana Africa plc Update on Freda Rebecca Gold Mine Expansion London, 03rd April 2006 The Board of Mwana Africa plc ("Mwana"), the AIM listed African resourcescompany, is pleased to provide an update on the expansion plan for its FredaRebecca gold mine in Zimbabwe. A $3m loan has been agreed between Mwana and the Freda Rebecca Gold Mine, themajority owned subsidiary of Mwana located in Bindura, Zimbabwe. It is expectedthat the necessary investment project status will be granted shortly by theZimbabwean Finance Ministry to allow work to begin. Phase One of the expansion plan is to boost Freda Rebecca's gold production bydoubling tonnage processed to 55,000 tonnes per month and increasing the rate ofgold production to 48,000 oz per year, up from 22,000 oz in 2005. The mainexpenses involved in Phase One of the expansion plan are to increase the numberof leaching tanks and carbon absorption capacity and to purchase further haulagetrucks. Phase One is expected to be completed by November 2006 and to costbetween $3m and $4m. Local costs will be funded by Zimbabwe banks. Phase Two of the expansion plan will expand the processing of ore to 85,000tonnes per month from underground sources plus an additional 20,000 tonnes permonth from surface mining. The rate of gold production is planned to increase to100,000 oz per year. This will be made possible by the commissioning of a secondSAG mill, further increased leaching capacity, reserve development andadditional expansion of the haulage fleet. Phase Two is expected to be completedby the first quarter of 2007 at a cost of an additional $4m to $5m, which willbe funded by a combination of debt and retained earnings. There is an overlap ofthe two phases due to the long lead time for the manufacture of the girth gearand pinion for the second mill. Exploration and confirmatory drilling is also planned and is expected to resultin the conversion of resources to reserves, compliant with JORC internationalresource and reserve reporting standards. Freda Rebecca currently contains354,000 oz of proved and probable reserve and 1,076,000 oz of measured,indicated and inferred resource. There are additionally several highlyprospective exploration licences close to the existing operations. The gold at Freda Rebecca is disseminated in the competent diorite host and thestopes are delineated by the assay results of a core drilling programme. Ore ismined from mechanised open stopes at a depth of up to 250m. The ore is deliveredto a conventional CIL treatment plant by 40 tonne haulage trucks. After crushingto 200mm the ore is SAG milled and then taken through the leaching, absorptionand elution processes. The Freda Rebecca mine was originally developed in 1988 by Cluff Mining. It wassold to Ashanti Goldfields in 2002. Following the amalgamation of Ashanti Goldof Ghana and Anglogold an 85% stake in Freda Rebecca was purchased by MwanaHoldings in 2004. Kalaa Mpinga, Mwana Africa Chief Executive Officer commented: "We are very pleased at the progress we are making developing the productionassets and exploration opportunities at Freda Rebecca. The mine was producing100,000oz gold a year as recently as 2002 and we intend to get it back to thatlevel within 12 months." -ENDS- Enquiries: Kalaa Mpinga / Oliver Baring Tel: +44 (0) 20 7654 5588Mwana Africa plc Tom Randell / Maria Suleymanova Tel: +44 (0) 20 7653 6620Merlin This information is provided by RNS The company news service from the London Stock Exchange