ZIMBABWE Stock Exchange-listed mining concern Bindura Nickel Corporation (BNC) has intensified its hunt for fresh capital to carry out an expansion programme at its mine, exploring alternative mining plans to improve cashflow in the short term.
Report by Business Reporter
BNC yesterday reissued a cautionary statement indicating that the company was currently struggling to raise capital to improve operating efficiencies at a time when the local market is facing liquidity constraints due to subdued economic performance.
The capital-intensive mining sector, according to the Chamber of Mines of Zimbabwe, requires up to $7 billion in recapitalisation.
Experts say the industry is hamstrung by obsolete equipment and frequent power cuts.
“Further to the company’s cautionary announcement of June 25 2013, shareholders are advised that the management of BNC is examining alternative mining plans with the objective of improving the short- term cashflow of the company and reducing the funding requirement,” the company said.
“These plans utilise the mining flexibility afforded by the presence of higher grade massive sulphide ore within the Trojan orebody. BNC is in the process of seeking short-term bridging finance to cover the funding shortfall, and continues to focus on the preservation and integrity of the business and its assets.”
Last month, BNC said despite making significant progress 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.
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BNC resumed production of nickel through its Trojan Mine and it has sold the first batch of nickel under phase one.
