MWANA AFRICA PLC - 3rd Quarter Operations and Exploration Update

16 February 2015

Mwana Africa PLC

("Mwana", the "Group" or the "Company")

Operations and Exploration Update

Mwana Africa is pleased to provide an update on its operations and exploration
activity for the third quarter ending 31 December, 2014 (Q3 2015).


OPERATIONAL HIGHLIGHTS

GOLD - FREDA REBECCA (ZIMBABWE)

Gold production decreased by 14% to 14,298 ounces from 16,555 ounces (Q2 2015)
despite greater mill throughput

Tonnes milled rose by 0.8% to 322,216t (Q2 2015: 319,767t) against the backdrop
of a 1.8% increase in mill throughput made possible by the partial pre-crushing
of feed material

Tonnes mined were reduced as production was focused on accumulated ore
stockpiles from the two previous quarters

The average feed grade was 16% below the feed grade for Q2 2015 as the main
production stopes posted lower than expected grades

Gold recovery rate fell to 78% (Q2 2015: 80%) as the plant had to cope with a
low-quality replacement carbon batch which resulted in gold being lost through
fine carbon and being passed to tailings. The defective carbon batch has
subsequently been replaced

Cash costs for the quarter under review increased by 27% to US$1,118/oz from
the September quarter's US$880/oz as a result of the 14% decrease in gold
production and a 10% increase in operating costs

All-in sustaining costs rose by 23% to US$1,304/oz quarter-on-quarter from
US$1,061/oz in September. Royalties for the quarter decreased by 37% due to
lower gold production and to lower royalty rates introduced in October.
However, the benefit was countered by an increase in operating costs mainly due
to mill shell realignments and clutch replacement costs being realised



NICKEL - TROJAN NICKEL MINE (ZIMBABWE)

Nickel in concentrate production was 30% lower at 1,383t in the December
quarter (Q2 2015: 1,989t), as a result of fewer tonnes of ore milled, a lower
head grade and reduced recoveries. The reduced production is partly
attributable to the ongoing refurbishment programme referred to below

Equipment taken out for the refurbishment exercise alongside ongoing
maintenance reduced resources available for mining development which in turn
restricted access to massives. This resulted in a 23% drop in mill head grade.
Recoveries were 2% lower than in the September quarter as a result of the lower
nickel head grade

Magnesium oxide concentrate content was reduced and was within the
specifications of the Glencore off take agreement

Nickel sales were 31% lower quarter-on-quarter from 2,008 tonnes to 1,395
tonnes as a result of lower production volumes

Cash costs and all-in sustaining costs both increased by 17% on a per tonne
basis quarter-on-quarter as a result of the reduced nickel production. The
refurbishment programme on the mobile equipment continued in the quarter.
However, these costs should start reducing in Q4 2015 as the programme reaches
its conclusion

New mobile plant equipment has been purchased and this, together with the
equipment that has been refurbished, will enable mining to start ramping up to
steady state monthly targets during Q4 2015



NICKEL - BINDURA SMELTER AND REFINERY (ZIMBABWE)

Work has continued on the smelter re-start with the delivery of the furnace
bricks expected during Q4 2015

Manufacturing of key components for the Electrostatic Precipitator is at
various stages. The ductings from converters to the ESP mixing chamber will be
delivered this month. The ESP inlet and outlet transition pieces will be
delivered at the same time

The main component of the cooling system (Evapco cooling tower) has been
manufactured and is ready for shipping to site

Hardware for the control and instrumentation system is on order. Software
programming for the Hatch furnace controller will commence during Q4 2015

The removal of the old feed system has been completed as well as the old
converter to ESP ductings. The furnace to ESP ducting has also been removed in
preparation for installing new units

Rewinding of two of the four furnace transformers is underway and completion is
expected in April 2015

Most key members of the project team are now in place

Bindura Nickel Corporation commenced marketing of a US$20 million bond in
December 2014. The bond has a 5-year term with a 10% semi-annual coupon rate

The closure date for the bond has been extended at the request of prospective
bond holders to 27 February 2015



DIAMONDS - KLIPSPRINGER (SOUTH AFRICA)

Throughput of Marsfontein fine residue tailings increased toalmost 50,000
tonnes during the quarter, an increase of 13% on the previous quarter

Head grade was lower due to planned mining through a low-grade area in October
2014

Diamond sales were up quarter-on-quarter from 23,150 to 44,200 carats with
three sales taking place during the period. The sales increase was largely due
to disposals from stocks accumulated at end-September

Prices per carat of US$19.31, were lower due to a greater proportion of smaller
gems in the product mix

Difficult marketing conditions are expected for the first half of 2015

The application for the renewal of mining rights continues



EXPLORATION HIGHLIGHTS

GOLD - ZANI-KODO (DEMOCRATIC REPUBLIC OF CONGO - DRC)

District scale exploration has continued but no drilling was carried out

Our resource estimates remain unchanged



COPPER/COBALT - SEMHKAT/HAILIANG JV (DRC)

Drilling of five priority targets was completed in November and cores delivered
to the laboratory for assay

Once the results have been received the next drilling phase will be planned


Kalaa Mpinga, CEO of Mwana, commented:

"The third quarter of the 2015 financial year, the three months that ended in
December, was a particularly challenging period.


"The nickel price decreased by 15% during the December quarter to US$15,867/t
(Q2 2015; US$18,592/t). Although gold's price fell to an average of US$1,195/oz
in the December quarter, the gold price has somewhat recovered in the first
month of calendar 2015 and I remain confident in both metals' longer-term
future.


"At Trojan, the refurbishment programme continued. This, in turn, led to slower
development rates than earlier envisaged, affecting access to the massives and
their higher grades. With most of the equipment now onsite, the availability
issue will be addressed in the next quarter whilst also having a positive
impact on costs.


BNC launched a bond to restart the smelter and I am pleased with the progress
on the restart project.


"Despite this challenging period, we remain confident of Mwana's growth
prospects. The Group's cash balance as of 31 December 2014 was US$5.5 million."


Mwana contact details

For further information contact:

Mwana Africa PLC
Kalaa Mpinga, CEO Tel: + 44   (0) 203 696 5470
Caroline Mathonsi, Investor Relations
Nominated Adviser and Broker
Peel Hunt LLP
Matthew Armitt / Ross Allister Tel: [phone]
Public Relations
Russell and Associates
Jim Jones/Leigh King Tel: [phone]




OPERATIONS

GOLD - FREDA REBECCA GOLD MINE (ZIMBABWE)

                                    Quarter ending

FREDA REBECCA                       Jan-15 Dec - 14 Sept - 14 Jun-14  Mar-14

Tonnes mined               (t)      62,393 269,085  290,771   370,755 282,078

Tonnes milled              (t)      93,415 322,216  319,767   263,531 279,879

Head grade                 (g/t)    1.66   1.89     2.25      2.07    1.91

Recovery                   (%)      79.8   77.5     80.0      76.8    83.0

Gold produced              (oz)     4,002  14,298   16,555    13,503  13,380

Average gold price         (US$/oz) 1,304  1,195    1,272     1,296   1,303
received

Cash Cost                  (US$/oz) 1,254  1,118    880       1,078   1,060

All-in sustaining cost     (US$/oz) 1,481  1,304    1,062     1,283   1,331


Figures shown are unaudited and may vary upon final audit. Gold ounces produced
incorporate gold released from or caught in 'lock-up' for each period.

Cash cost per ounce sold includes costs for mining, processing, administration,
accounting movements for stockpiles and gold-in-circuit, and, net proceeds from
by-product credits. It excludes capital costs for exploration, mine development
or processing mill capital works, and, the cost of royalties.

All-in sustaining cost reflects cash costs per ounce sold plus depreciation and
amortisation, thus incorporating the capital cost of production, plus interest,
other indirect costs and royalties. All-in sustaining cost represents all costs
attributable to gold production over the period.



COMMENTARY

The mill running hours remained stable even though the heavy rains resulted in
211 hours downtime due to power issues. The stability is as a result of
improved maintenance and the continuous improvements to the mill realignment as
reported last quarter. The introduction of pre-crushed feed material has seen
an increase in mill throughput.

Mining and milling grades were affected by the need to mine through a zone of
lower grade ore in the new main stope as per the mine plan. The major stope
reported last quarter had a zone which intersected low grades requiring to be
worked through the production sequence. The lower grade was compensated for to
an extent by increasing mining in minor higher-grade stopes. The situation
should end once the lower-grade ore has been worked through and operations can
be resumed according to the mining plan during Q4 2015.

Mill recoveries were briefly affected by poor quality carbon being delivered
for the leach process. The problem was rectified as soon as it was noticed, but
the result was that some gold passed through the leach process to the slimes
dam.

These challenges resulted in lower gold production quarter-on-quarter and this,
in turn, contributed to higher unit costs per ounce of gold.

Modifications to the tailings retreatment plant to treat the run of mine ore
remain under consideration.



Gold production for January 2015 was 4,002 ounces and tonnes milled were 93,415
tonnes. Production was affected by lower running hours and mill throughput as
the alignment work continued on Mill 2. The average feed grade was lower at
1.66g/t as a result of the major stope intersecting a low grade zone. Cash and
all-in sustaining costs for the month were US$1,254/oz and US$1,481/oz due to
the lower production. All-in sustaining costs were US$1,481/oz.



The focus remains on grade control, mill throughput and alignment improvements
arising from the introduction of partial secondary crushing and gold delivery.
Management expect to start seeing a positive response to the grade by the end
of February by introducing identified higher grade and remain confident in the
grade recovery..

Management forecast production of approximately 14, 000 oz for Q4 with gold
production for FY15 in line with production recorded for FY14.

Cost control at Freda Rebecca remains a management priority. The Company has a
short term overdraft facility of $4 million to cover short term working capital
requirements.



NICKEL: TROJAN NICKEL MINE (ZIMBABWE)

                                           Quarter ending

TROJAN MINE                      Jan - 15  Dec-14  Sep-14  Jun-14  Mar-14

Tonnes mined             (t)     43,447    155,129 160,741 155,610 161,964

Tonnes milled            (t)     39,904    148,712 161,107 148,882 153,451

Head grade               (% Ni)  1.250     1.156   1.496   1.519   1.621

Recovery                 (%)     81.7      80.5    82.5    84.1    88.8

Nickel in concentrate    (t)     407.6     1,383   1,989   1,902   2,207

Nickel sales             (t)     426.9     1,395   2,008   1,871   2,250

Average nickel price     (US$/t) 14,875    15,867  18,592  17,745  14,075

Off take opportunity cost included

Cash cost                (US$/t) 16,617    16,214  13,900  13,750  11,333

All-in sustaining cost   (US$/t) 17,456    17,039  14,566  14,776  12,220

Off take opportunity costs excluded @ 65% payability

Cash cost                (US$/t) 11,410    10,666  7,392   7,454   8,498

All-in sustaining cost   (US$/t) 12,147    11,491  8,059   8,480   9,329


Figures shown are unaudited and may vary upon final audit.

Average nickel price represents the average LME nickel price utilised under the
terms of the Glencore off-take contract. Under the terms of the offtake
agreement, BNC is entitled to a defined percentage of the value of nickel
contained in concentrate. Therefore, as the nickel price rises, both revenue
and costs attributable to the agreement increase.

Cash cost per tonne includes costs for mining, processing, administration,
off-take costs and penalties, transport costs, accounting movements for
stockpiles, and net proceeds from by-product credits. It excludes capital costs
for exploration, mine development or processing mill capital works, and, the
cost of royalties.

All-in sustaining cost reflects cash cost per tonne plus depreciation and
amortisation, thus incorporating the capital cost of production, plus interest,
other indirect costs and royalties. All-in sustaining cost represents all costs
attributable to nickel production over the period.



COMMENTARY

At Trojan, the refurbishment programme had not been completed by the quarter
close as a result of lower than anticipated dump truck availability for both
massives transportation (production/grade) and waste movement (development).
New dump trucks have been delivered to the mine along with a support,
production and face rig with an LHD and an additional production rig
outstanding.



The major reason for the lower recovery and the decrease in head grade
quarter-on-quarter was attributable to the challenges experienced with mining
equipment - a combination of rigs, LHDs and dump trucks - resulting in limited
massives extraction.

Management expects Trojan's production rate to steadily increase to its optimal
sustainable level in February and March as the injection of new and refurbished
equipment takes effect.



Forecast annual nickel sales for the financial year 2015 are expected to end
the year in line with the prior year

During January, the mine milled 39,904 tonnes of ore to produce 427 tonnes of
nickel in concentrate. Recoveries and grade showed an improvement in January of
8.1% and 1.5% respectively, compared to the December quarter.



Cash costs were US$16,617 per tonne (inclusive of the off take opportunity
cost) during the first two months whilst all-in sustaining costs have averaged
US$17,456 per tonne over the same period. Costs exclusive of the off take costs
were US$11,410 and US$12,147. BNC has secured a short-term overdraft facility
of US$7 million with a local financial institution which is being utilised for
bridging finance for the long lead equipment orders required for the smelter
project and short-term working capital. Management anticipates that all-in
sustaining costs will recover in Q4, providing the nickel price remains at
approximately US$15,000 per tonne.



Diamonds - Klipspringer (South Africa)

                                              Quarter ending

KLIPSPRINGER MINE              Jan 2015 Dec-14   Sep-14   Jun-14   Mar-14

Tonnes treated        (t)      11,022   49,939   44,200   40,350   16,000

ROM diamonds produced (carats) 7 120    31,850   32,425   23,710   14,150

Head grade            (cpht)   64.6     63.8     73.3     58.8     88.4

Recovery              (%)      99.7%    99.7%    98.4%    99.6%    99.8%

Diamond sales         (carats) Nil      44,200   23,150   15,960   12,860

Average diamond price (US$/ct) US$19.50 US$19.31 US$20.93 US$20.00 US$21.03




commentary

The KSR Project produced steadily during the onset of the rainy season. Monthly
production increased from 14,700 tpm during the second quarter to 16,600 tpm
for the current reporting period.

Diamond production fell slightly below second quarter production. This was due
to mining a lower grade area in October. Mining this area was necessary to
cater to final rehabilitation plans and to ensure that the higher grade areas
closer to the dam wall could be mined safely due to the wet weather conditions.

The rough diamond market prices softened during the quarter by between 7.5% to
10% globally. The main reasons for this are:

liquidity constraints in the market

global demand weakening

relative oversupply of diamonds throughout the distribution chain

Three diamond sales took place during the quarter. One parcel was sold locally
whilst the other two were exported to Antwerp for sale. The average selling
price for the three parcels was US$19.31 per carat, down just over 7% from the
second quarter prices.

The KJV share of the revenue for the quarter was US$56,500.

A bulk sample of the lower slimes dams was completed during December. The fine
residue tailings contained in these dams originate from the Leopard fissure.
Results from the bulk sample will be available in the next quarter and will
inform a decision on whether it is economically feasible to mine them in a
similar manner to the existing operation.

It is planned to take a representative bulk sample of the Klipspringer coarse
tailings dump during the next quarter. The bulk sample will be treated and
evaluated during Q4 2015.

Production throughput of Marsfontein fine residue tailings (slimes) at the
Klipspringer Mine was sluggish due to the shutdown over the December holidays

Head grade was 65 carats per hundred tons (cpht), in line with results achieved
in the previous quarter

No diamond sales took place during the month. An offer to purchase the current
stock at US$19.50 was accepted

Tough marketing are conditions expected to endure for the first half of 2015.
The price received for fine diamonds produced by the mine during the quarter
fell by 7%

Water which caused the shaft bottom to flood on 26 December has been cleared

In January, diamond production was in line with the previous quarter's results.
At the end of January a serious incident involving an armed attack on our
diamond export resulted in the loss of 655 carats.

The diamond market is cautious as trading has stalled on the back of lower
levels of consumer demand. Dealers are reluctant to buy if they can't sell and
India has cut production by approximately 30%. Under existing market conditions
receiving an offer of US$19.50 per carat for our current stock is pleasing.

Dewatering operations have cleared the shaft bottom of excess water. Early
indications are that the water did substantial damage to stopes on 5 and 6
level and this will impact on the mine restart operations.

Treatment of the bulk sample from the lower slimes dams has been delayed due to
the security incident reported earlier. This step was necessary whilst the
Company reviews procedures and investigates the incident.

Bulk sampling of the Klipspringer coarse tailings dump has been deferred to the
2016 financial year. Work on this project is expected to start in April 2015.



EXPLORATION

GOLD - Zani-Kodo (dEMOCRATIC REPUBLIC OF CONGO - drc)

District-scale exploration is continuing. This has produced some interesting
mineralisation indications, in particular in the Godawizi area, where broad
zones of sulphide-bearing silicification and quartz veining with a NW-SE
orientation similar to known mineralised structures have been identified.



No exploration drilling was carried out during H1 FY2015 and consequently there
have been no additions to the existing 2.975Moz gold resource estimate.



 Subarea        Cut off (g/t)  Category  Tonnes (t)  Grade (g/t) Au (oz)



Kodo Main       0.5            Indicated 4,799,487   3.63        560,075

                0.5            Inferred  10,330,969  3.52        1,169,000



Lelumodi        0.5            Indicated 1,118,644   2.06        74,260

                0.5            Inferred  8,154,092   1.81        475,072



Lelumodi North  0.5            Inferred  1,150,062   2.34        86,589



Badolite        0.5            Inferred  2,806,940   2.34        211,010



Zani Central    0.5            Inferred  9,683,455   1.28        398,894



TOTAL                                     38,043,649 2.43        2,974,900




COPPER - HAILIANG JV, KATANGA



2014 drilling programmes on 5 Priority 1 targets were completed at the end of
November

A total of 7,044.92 meters core drilling was done

ALS South Africa confirmed the reception of all samples, and assay results are
pending

A focus of the quarter was on data compilation of 2014 exploration results,
preparatory for work proposals for 2015



ABOUT MWANA AFRICA

Mwana Africa PLC is a pan-African, multi-commodity mining and development
company. Mwana's principal operations and exploration activities cover gold,
nickel, copper and diamonds in Zimbabwe, the Democratic Republic of Congo (DRC)
and South Africa.


 Includes 4,673 carats of unsold diamonds (stock)

Adjusted for acid loss

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