Mining

BNC grapples with falling ore grade

PHILLIMON MHLANGA

Listed nickel miner, Bindura Nickel Corporation (BNC), is grappling with deteriorating mineral ore grade owing to an increase in the mining of disseminated ore as opposed to massives deposits.

This presents fresh challenges for BNC as its head grade deteriorated by 0.11 percentage points to 1.53% during the 12 months to March 31, 2020 from 1.64% recorded in prior comparative period.

As a result, the slump in ore grade caused by a decrease in ore milled.

A total of 434 077 tonnes of ore was milled during the reviewed period, a 2% decline from 443 876 tonnes recorded in the same period in prior year.

“The 2% decrease was due to a decrease in grade.

The decrease in grade was due to an increase in the mining of disseminated ore as opposed to massives, following the investment in new mining equipment,” BNC board chairman, Muchadeyi Masunda said.

“Recovery remained constant at 86.3%, year-on-year”.

The nickel production of 5 720 tonnes was 9% lower than last year’s output of 6 289 tonnes attributed to the lower ore grade and lower milled tonnage achieved respectively yearon-year.

Masunda said the cost of producing nickel in concentrate increased to US$7 606 per tonne during the reviewed period from US$6 610 per tonne in comparative prior period, mainly due to the decrease in production as well as the incessant increase in the prices of local inputs, which was fuelled by the sourcing of scarce foreign currency on the parallel market by local suppliers for the importation of inputs.

Sales fell to 5 685 tonnes of nickel in concentrate compared to 6 410 tonnes sold in the prior comparative period.

This was in line with production which was lower than the prior year’s output, Masunda said.

BNC’s turnover declined 1% to US$52.4m in the period under review from US$54m realised in 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.

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, is back in the black after achieving a net profit of US0.9m during the period under review from a loss of US$253m in prior comparative period.

Total assets for BNC stood at US$94m from US$97m.Total equity increased by 10% year-onyear.

Current assets decreased by 18%, mainly driven by a decrease in trade and other receivables.

Total non-current liabilities decreased 4% to US$30m, mainly due to a decrease in the long-term portion of interest bearing loans.

Current liabilities decreased 31% to US$14.2m from US$20.5m, mainly due to a decrease in the short-term portion of interest bearing loans and related party payables as a result of a write -off.

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