Pan-African, multi-commodity resources company Mwana Africa says the sale of the first nickel concentrate is expected in approximately seven months from its Bindura Nickel Corporation (BNC) mine after the successful completion of a rights issue.
Report by Acting Business Editor Mwana’s principal operations and exploration activities cover gold, nickel, other base metals and diamonds in Zimbabwe, the DRC and South Africa.
In a statement last Friday Mwana said it had now completed the rights issue and placing required to recapitalise BNC and to recommence operations.
It said BNC had agreed satisfactory terms for the settlement of creditors and of liabilities relating to the retrenchment of some employees.
“The proceeds are sufficient to restart the Trojan Mine, although further funding will be required by BNC within approximately twelve months to provide sufficient working capital to take BNC through to being cash-flow positive,” Mwana said.
“Sale of first nickel concentrate is expected in approximately seven months, and BNC already has an offtake agreement in place with Glencore International for the sale of nickel concentrate from Trojan.”
BNC ceased production in 2008 when the company was placed under care and maintenance at the height of the country’s economic crisis.
The recapitalisation and restructuring of BNC was completed through the rights issue and followed by a placing, whereby certain creditors and staff accepted BNC shares in lieu of the balances owed to them by the company.
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BNC shareholders approved the rights issue at an Extraordinary General Meeting held in Harare in June.
New funds invested into BNC by way of the rights issue totalled $23 million, including $21million from Mwana Africa. Liabilities of approximately $11,5 million were converted into BNC shares by way of the placing.
Following the rights issue and placing, Mwana now holds 926 359 603 ordinary shares in BNC.
Mwana’s Freda Rebecca gold mine also in Bindura restarted operations in 2009 and achieved its target production rate of 50 000 ounces gold per annum in 2011.
