Operational and Corporate Update April 23, 2014 08:30 ET
Mawson West Operations & Corporate Update
PERTH, AUSTRALIA--(Marketwired - April 23, 2014) -
Q1 2014 Highlights:
- Quarterly production of 879 tonnes of copper and 41,598 ounces of silver
- 2014 underground production targeting 7,000 - 9,000 tonnes of copper in concentrate
- Exploration drilling underway to upgrade the Dikulushi underground Mineral Resource
- New finance arrangements in place to fund growth strategy
- Cash on hand of approximately US$23(1) million at 31 March 2014 follows debt retirement of US$7.5m, US$5.2m of Dikulushi tax payments and continued investment in Kapulo long lead items.
Mawson West Limited (TSX:MWE) ("Mawson West" or "the Company") is pleased to provide the Q1 2014 production results for copper and silver from the Company's Dikulushi mine in the Democratic Republic of Congo ("DRC").
Operational
Production of 879 tonnes of copper and 41,598 ounces of silver was achieved for the three months ended 31 March 2014, as the Dikulushi underground continued with its planned ramp up, commencing with the first underground ore processed in mid February 2014.
During the ramp up period, the Company established a full complement of underground mining personnel and equipment on site. Capital expenditure during the period remained in line with the Company's original US$9 million estimate.
Underground mining is expected to extend the production life from Dikulushi operations until at least Q3 2014 while providing the opportunity for Mawson West to evaluate additional underground mining potential, as well as assess the economic viability of identified satellite deposits. Drilling from underground targeting upgrades to Dikulushi Mineral Resource has commenced.
Corporate
The Company's net cash position as at 31 March 2014 totalled approximately US$23 million1, a decrease of US$25 million from 31 December 2013, primarily a result of debt retirement of US$7.5 million, DRC 2013 taxation remittances of US$5.2 million, coupled with Dikulushi underground and Kapulo long lead item investments totalling US$10 million.
Subsequent to the end of Q1 2014, Mawson West announced that the Company, through its 90% owned subsidiary Anvil Mining Congo SARL, signed an offtake agreement with Trafigura Pte Ltd ("Trafigura") to sell 100% of the copper concentrate produced at the Dikulushi and Kapulo mines for a period of 48 months from the commencement of commercial production at Kapulo. As part of the offtake arrangements, Trafigura has provided Mawson West with a debt facility of US$50 million, which was prepaid to the Company immediately.
Mawson West Chief Executive Officer and Managing Director Bruce McFadzean said:
"I am pleased to report that our Dikulushi underground operation is continuing to ramp up and we expect production from the high grade ore body to total between 7,000 - 9,000 tonnes of copper in concentrate for 2014. Simultaneously we have continued to invest in exploration drilling at Dikulushi to enable future growth in the development of our mine.
At Kapulo, we continued to procure long lead items during the quarter and our recently announced US$50 million financing facility with Trafigura Pte Ltd enables Mawson West to proceed with construction of the Kapulo project. With approximately US$45 million remaining to be spent on Kapulo construction activities, we now expect to commence commissioning of Kapulo in Q4 2014, bringing on stream annualized production of 20,000 tonnes of copper in concentrate upon successful completion of the commissioning."