ZIMBABWE Stock Exchange-listed mining concern Bindura Nickel Corporation (BNC) has failed to raise additional funds to finance a planned expansion programme at the group’s nickel mining operation due to the weakening price of the metal on the international market, the company has said.
Report by Business Reporter
BNC in a statement yesterday said despite making significant progress at BNC over the past year, including the completion of the financial restructuring in September 2012 and delivering the first nickel concentrate in April 2013, the company was struggling to raise funds to resume operations at Trojan Mine Phase II.
“The company has so far been unable to raise additional funding through debt, to finance phase two of the restart of Trojan Mine as previously anticipated,” the company said.
“The difficulties are attributable to the negative market sentiment associated with the falling nickel price coupled with the challenging capital markets and this has created a funding shortfall at BNC.”
BNC mine resumed production of nickel through its Trojan Mine and it has sold the first batch of nickel under phase one.
The company sold the concentrate to Glencore under an agreement in April.
BNC in September 2012 raised $23 million through a rights issue while $11,5 million was converted into BNC shares.
As of June 2013 BNC had a total of 1 210 213 657 issued shares and a market capitalisation of $36 million.
BNC is one of the four listed mining companies on the stock exchange since 2009 when the country introduced the multicurrency system.
Before this, BNC placed Shangani, Trojan Mines and the Bindura Smelter and Refinery under care and maintenance in November 2008 due to operational challenges in Zimbabwe and a decline in nickel prices.
BNC’s other unit Freda Rebecca gold mine restarted operations in 2009 and achieved its target production rate of 50 000 ounces of gold per annum in 2011.