Freda seeks fresh capital injection


Business Reporter
FREDA Rebecca requires additional capital injection to stem technical issues and raise production, an official who would not be named said.

The senior executive would, however, not say how much Zimbabwe’s second biggest miner needs to address the technical issues.

The major highlight of Freda’s performance for the quarter to December 31 was the 1,78 percent improvement in grade to 2,19 grammes per tonne.

The group executive said that Freda Rebecca, which struggles with disseminated ore body, needs fresh capital to deal with its technical issues.

“Adversely, tonnes mined dropped 11 percent in December while tonnes milled remained flat, showing technical issues with the mills have not been overcome.

“This may require additional capital expenditure in these harsh commodity price times with margins already thin,” the official said.

The official, however, said cost containment was the theme across the group in the quarter with Freda’s cash cost down 5,6 percent to $820 per tonne.

Gold sales at Freda Rebecca increased 2,4 percent to 18 506 tonnes with the growth attributed to improvements in feed grade and recoveries.

However, things were not too good for its sister company Trojan, operated by Bindura Nickel Corporation, where cost fell 28 percent to $933/t.

All in sustaining costs were at $6 349 against sales of $6 121 with costs likely to increase should technical issues arise and output drops.

The drop in mined tonnage and the marginal increase milled tonnes suggest that the nickel miner was sitting on stockpiles from last year.

However, nickel in concentrate increased 10 percent 1 584 tonnes while nickel sales increased 5,5 percent to 1 577 tonnes at average price $6 121/t.

“Notably, the increase in nickel sales is attributed to high grading the mine by the group, extracting the best grades, but lacking development to find new areas to replace these,” the ASA official said.

“This is a major concern should the miner run out of the good stuff where it is currently mining. BNC used this method as a temporary measure in 2013 when it reported funding requirement,” the official said.

BNC remains cash-flow negative, but has not mentioned its plans regarding the $20 million bond, which sees the first coupon fall due next month.

Freda and BNC, which is listed on Zimbabwe Stock Exchange, are units of AIM listed group, ASA Resources Plc, formerly Mwana Africa.

Share This: