NDAMU SANDU
Resources group, Bindura Nickel Corporation (BNC), is in frantic talks with third parties to raise US$200m to keep its Hunter’s Road claims and ward off moves by the government to repossess unused claims.
The ministry of Mines and Mining Development is pushing the “use it” or “lose it” policy to bust the speculative holding of claims in the industry amid revelations some investors have failed to develop their assets in more than 70 years.
In an operational review statement carried in BNC’s annual report, MD Batirai Manhando said the nickel miner had received notice from the Ministry to justify why it should keep its Hunter’s Road claims.
He said the company engaged the ministry in order to present its intentions with regard to the Hunter’s Road claims.
Shareholders are assured that the company still has plans to develop Hunter’s Road. However, the main issue is that the project requires capital expenditure of approximately US$200m, Manhando said.
“Consequently, the company is evaluating a number of funding scenarios, including the option of Joint-Venture partnerships with interested third parties.”
BNC has three subsidiaries— BSR Limited, Hunter’s Road Nickel Mine (Private) Limited (Hunter’s Road) and Trojan Nickel Mine Limited. Trojan is the only operating entity within the group.
BSR has been dormant since 2004 and Hunter’s Road is still at project stage.
Hunter’s Road Joint Ore Reserves Committee compliant measured and indicated resource size is 200,404 tonnes of contained nickel.
Last year, Mines and Mining Development minister Winston Chitando told a meeting of mining industry players that the government would push miners to develop their claims in a bid to stop speculative purposes which are rampant in the billion dollar sector.
Hunter’s Road is in the predevelopment stage and will be mined as an open pit mine as power and water are readily available, according to Manhando.
In its financial results for the year ended March 31 2020, tonnes milled decreased by 2% to 434 072 compared to last year in line with the mined ore tonnage.
The production of nickel concentrates decreased in FY2020 by 9% to 5, 720 tonnes compared to 6 289 tonnes last year.
The decrease was primarily due to a decrease in grade as Head grade was 7% lower at 1.53 % compared to 1.64% last year, BNC said.
BNC’s turnover declined 1% to US$52.4m in the period under review from US$54m realised in the comparative prior year despite an improved global price performance.
BNC’s operating profit decreased 86% to US$2.8m, compared to US$20.2m achievement in the same period in 2019.
BNC chairman, Muchadeyi Masunda attributed the profit erosion to reduction in the net foreign exchange gains recognised on the introduction of the Zimbabwe dollar in the prior year amounting to US$17m compared to US$0.5m realised in the year under review.
BNC, however, was back in the black after achieving a net profit of US$900,000 during the period under review from a loss of US$253m in prior comparative period.
Sotic International recently acquired a controlling shareholding in BNC following the exit of ASA Resources.
Last month, Sotic seized control of the group after snapping up 926775700 shares held by ASA at ZWL$3.7 per share.
