Mwana Africa says Zimbabwe Q1 gold output up, nickel plunges

HARARE, Aug 25 (Reuters) - Mwana Africa (LSE: MWA.L - news) 's Zimbabwe gold mine posted a 26 percent rise in production to 16,985 ounces in the first quarter but nickel output fell 34 percent due to lower ore grades and equipment upgrades, the company said on Tuesday.

Mwana Africa's Freda Rebecca mine is the largest single gold mine in Zimbabwe and its output in the three months to the end of June was up from 13,443 ounces during the fourth quarter, thanks to better gold ore grades.

The mine cut its costs by 24 percent to $1,093 per ounce, which made up for the decline in gold prices. Spot gold has rebounded nearly 8 percent from last month's low, but remains down 2 percent on the year.

Mwana Africa also owns the Trojan nickel mine in Bindura through locally-listed Bindura Nickel Corporation.

Nickel production at Trojan fell to 1,394 tonnes from 2,032 tonnes in the fourth quarter due to lower ore grades and interruptions to underground mining because of ongoing equipment upgrades.

"The result was slower mining rates, though these should improve sharply during the current quarter," Yat Hoi Ning, Mwana Africa's executive chairman, said in a statement.

Lower nickel production also resulted in a 39 percent decline in sales to 1,267 tonnes, the company said.

Bindura is Africa's only integrated nickel company with a mine, smelter and refinery. The smelter is undergoing an upgrade and is expected to be in operation in the first quarter of 2016. (Reporting by MacDonald Dzirutwe; editing by David Clarke)