Mowana Mine bounces back to viability
Koketso Kgoboge | Tuesday August 22, 2017 18:00
This was revealed by managing director (MD) Kevin van Wouw on Thursday afternoon.
“June was the first month that we managed to break even despite mining being constrained and only achieving 60% throughput,” van Wouw said when addressing staff and directors of the mine.
He said with copper prices expected to be at current and higher levels at least until 2020, by which time their expansion plans will be in place, they would be able to survive downturn in future copper prices.
He said although they took over the mine while it was still experiencing huge problems both from previous employees, creditors, funders and different stakeholders, they have done well to navigate through the challenges. The MD pointed out that amongst other challenges they faced was the unsuccessful Reverse Take Over (RTO) by Alecto following delisting of the company from the AIM (Alternative Investment Markets) in London, which in turn created uncertainties of the working capital.
The mine also hit another hiccup in April when the local mining contractors pulled back after failing to provide adequate fleet to meet production demands. However, the MD assured stakeholders that over the next three months, the mine would be able to stabilise its operations.
He explained that since the mining contractor had abandoned the contract and withdrawn from the site, they have resolved to purchase their own equipment. “This has placed a big strain on our project both financially and time wise, but owning and operating our own fleet will resolve this external weakness to the project and the support equipment will also create openings for more personnel.”
He said in addition to the $23 million funding commitment the mine acquired for the underlying transaction with Messina Copper Botswana and for the DMS expansion, they have been successful in attracting more funding commitment that will also help in creating stability.
“I have also been successful in obtaining $15 million commitment to funding of which we have only used $4 million to date,” he said. Above that, he said Alecto has applied to list on the Botswana Stock Exchange (BSE) and subsequently re-list on the London bourse after changing its name to Cradle Arc Mining. He said with the positive trend that is beginning to show, he expects that by this time next year, they will have upgraded the processing facility, have a full expanded mining fleet and will be contemplating opening an underground mine at Makala.
The mine is still on trial period since re-opening in January and has employed about 240 workers.