BUSINESS REPORTER
Listed miner, Bindura Nickel Corporation, reported a lacklustre performance in the 12 months to March 31, 2023, largely as a result of numerous operational issues like low ore grade and outdated equipment.
Revenue declined to US$49.5m in the period under review from US$74.2m in the prior year due to reduced sales volume which was attributable to the lower production.
Bindura suffered a US$18.5m loss in the reviewed period from a profit of US$8.06m realised in the prior comparative period.
The fact that the miner’s current liabilities exceeded its current assets rendered it technically insolvent.
Current liabilities for Bindura stood at US$25.4m compared to US$38.8m current liabilities. This means, the miner could find it difficult to pay its obligations as they fall due.
“The mine was adversely affected by low underground mining mobile equipment availability due to obsolescence.
“Production was also negatively impacted by an unexpected change in the ore body, leading to a severe decline in the high grade massives resource footprint,” Bindura board chairman, Muchadeyi Masunda said in a statement accompanying financial results for the year to March 31, 2023.
He said the transition in the mining model from a low-volume, high-grade strategy to a low-grade, high volume strategy, was behind schedule due to the delay in the delivery of ‘new underground equipment’.
“Unfortunately, the transition is behind schedule due to the delays in the delivery of the new underground mining mobile equipment which is a prerequisite to the realisation of the new mining strategy,” he said.
The company experienced additional operational challenges which exacerbated the situation which included the following factors sub-vertical rock winder (SVR) breakdown, which was declared a force majeure event, resulting in the loss of October and November 2022 production months.
Also limited hoisting capacity due to the damaged SVR bull gear which is expected to be replaced in August 2023 and the SVR Winder continues
to run at 60% of its capacity until the damaged bull gear is replaced in August 2023.
Protracted electrical power outages and general grid instability beginning in the month of February 2023, resulting in severe direct production losses, equipment damage, and recovery inefficiencies was also a major challenge.
Masunda said ore hoisted during the reviewed period declined 11% to 418,587 tonnes compared to 463,338 tonnes achieved in the prior comparative period.
Ore milled stood at 418 020 tonnes, reflecting a 9% lower than 461130 tonnes.
Head grade declined to 0.96% from 1.30% for the prior year while recovery efficiency was 77.9% versus 85.0% for last year.
Nickel in concentrate production also declined by 37% to 3180 tonnes from the previous year’s 5,082 tonnes.
Cost of production increased by 76% to US$21 841 per tonne from US$12,410 per tonne for the prior year.
Masunda said the increase in cost of production was mainly due to the decrease in nickel production, the high cost of maintaining the old and obsolete underground mining mobile equipment and the increase in power tariffs during the year.
