Mwana Africa's subscription to raise approximately US$3.2m

Published: 05 September 2013

Mwana is pleased to announce that it has raised approximately US$3.2 million (£2.1 million) through a subscription of 130,254,717 new ordinary shares by existing shareholders of the Company at a price of 1.57p (the "Subscription Shares")(together the "Subscription"). China International Mining Group Corporation ("CIMGC") has subscribed for 45,271,457 of the Subscription Shares and Mr Ning Yat Hoi has subscribed for the remaining 84,983,260 Subscription Shares. The Subscription Shares represent 11.7% of the Company's existing issued share capital.

As previously announced, given the fall in commodity prices in recent months, the Company has urgently required further funding and the Board has been engaged in a process to secure that funding. As part of this process the Board of the Company has explored a number of funding alternatives and is pleased to have secured the Subscription proceeds at such an important time for the Company. The Board welcomes the support shown by its major shareholder and looks forward to benefitting further from association with CIMGC's banking and industry connections.

The net proceeds from the Subscription will provide general working capital for the Company, and, given progress made to date on cost cutting measures, is considered sufficient to meet Mwana's working capital requirements for the foreseeable future. The Subscription price of 1.57p represents a 10% premium to the 20 business day VWAP of Mwana's ordinary shares as at close of business on 2 September, the last practicable day prior to signing the subscription letters, and a 6.0% discount to the closing mid-market price of 1.67p as at close of business on 4 September 2013.

Mwana will continue to build shareholder value as a multi-commodity, multi-country diversified mining group, focused on Africa. Freda Rebecca Gold Mine is currently cash flow generative, and Mwana will continue to seek efficiencies and explore tailings retreatment opportunities to further enhance value at the mine. Zani Kodo, Semhkat and Bindura Nickel Corporation ("BNC") will remain within the Mwana portfolio; any further development of these projects will be done through project level funding, either in the form of joint ventures and/or debt finance, with the Semhkat copper project already benefitting from a joint venture with Hailiang (as previously announced). As previously announced, in light of the new resources statement at the BNC Trojan mine, the Trojan mine plan has been revised to target the higher grade zones of the ore body, known as "massives", which significantly improves BNC's cash flow and reduce its working capital requirements. The Board is committed to extracting maximum value for the Group from these assets.

In conjunction with the strategy outlined above, Mwana will continue with the cost cutting initiatives it has previously announced.

CIMGC has subscribed for 45,271,457 Subscription Shares and is currently a substantial shareholder in the Company, as defined by the AIM Rules for Companies ("AIM Rules"). CIMGC is therefore deemed to be a related party of the Company for the purposes of the AIM Rules. Ning Yat Hoi has subscribed for 84,983,260 Subscription Shares. He is currently the chairman of CIMGC and a director of the Company, and is therefore also deemed to be a related party of the Company for the purposes of the AIM Rules. With the exception of Ning Yat Hoi who is involved in the transaction as a related party and Hu Yuan Ching who is also connected to CIMGC, the Mwana Directors consider, having consulted with Liberum Capital Limited in its capacity as the Company's nominated adviser, that the terms of the subscriptions by CIMGC and Ning Yat Hoi are fair and reasonable insofar as the shareholders of the Company are concerned.

Following the Subscription, CIMGC will hold 287,695,739 ordinary shares and Ning Yat Hoi will hold 85,437,805 ordinary shares, representing 23.07 per cent and 6.85 percent of the Company's current issued ordinary share capital respectively. Following the Subscription, Ning Yat Hoi will thus be interested in 373,133,544 ordinary shares in the Company which will represent 29.92 per cent. of the Company's total voting rights after completion of the Subscription.

Application has been made for admission of the Subscription Shares to trading on AIM ("Admission") and it is expected that Admission will take place and that trading will commence on AIM at 8.00 a.m. on or around 12 September 2013. The Subscription Shares are being placed pursuant to the Company's existing authorisation levels as approved by shareholders at its last AGM on the 14th of September 2012, thereby leaving 112,580,059 shares available within the existing headroom. The Company is actively considering whether there will be further equity issuance within its existing headroom.

In accordance with the Financial Conduct Authority's Disclosure and Transparency Rules ("DTR"), the total issued share capital of the Company with voting rights following the Subscription will be 1,247,315,168 ordinary shares. 2,666,600 ordinary shares are currently held in treasury.

Mark Wellesley-Wood, Non-Executive Chairman of Mwana Africa PLC, said: "I am delighted with the support shown by CIMGC and Mr. Ning for the Company. Our focus now is on driving down costs and extracting maximum value for shareholders from our asset portfolio."
For further information contact:

Mwana Africa PLC
Brian Tuck, Company Secretary
Tel: +44 (0) 20 7654 5580

Nominated Adviser and Broker
Liberum Capital Limited
Tom Fyson / Ryan de Franck
Tel: +44 (0)20 3100 2000

Joint Broker
Peel Hunt
Matthew Armitt / Andy Crossley
Tel: +44 (0)20 7418 8900

Public & Investor Relations
Tavistock Communications
Ed Portman / Mike Bartlett / Simon Hudson
Tel: +44 (0)20 7920 3150
About Mwana Africa PLC

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 DRC and South Africa.

Mwana's Freda Rebecca gold mine in Zimbabwe, having restarted operations in 2009, produced 65,350 ozs of gold in the 12 months to March 2013.

In February 2013, Mwana announced that the gold mineral resource at its Zani Kodo project in Democratic Republic of Congo had increased to 2.6 million ounces.

In February 2013, Mwana announced it had signed a Joint Venture Agreement with Zhejiang Hailiang Company Limited to jointly explore some of its copper license areas in the Katanga Province of the DRC.

The restart of operations at The Trojan Nickel Mine (owned by Mwana's Zimbabwe subsidiary Bindura Nickel Corporation ("BNC")) followed four years during which all of the BNC assets were on care and maintenance. In September 2012, BNC carried out a restructuring and recapitalisation involving US$23m being invested into BNC which has allowed it to restart the Trojan mine. First sale of concentrate to Glencore took place in April 2013.
- Mwana Africa

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