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BNC, which is 52,9 percent owned by Mwana Africa Corporation, owns and operates Trojan mine, which has been under care and maintenance since 2008.
In a statement, Mwana Africa said shareholders would be asked to approve the rights issue at an Extraordinary General Meeting on 29 June and if approved the rights offer would close on 27 July.
The rights issue will be underwritten by Mwana Africa, through its subsidiary Zimnick Limited.
It said although $33 million was needed to recapitalise the mine, $21 million was adequate for the first year of operations while the balance would be raised through debt, among other instruments.
“The BNC directors estimate that the total costs of restarting the Trojan mine are approximately $33 million, with $21 million taking the Trojan mine into production and revenue generation in the first year of the restart and a further $12 million for the following year taking BNC to a cash flow positive position. The proposed BNC rights issue will fund the first $21 million of the funding requirements; the BNC directors are confident that they can secure the remaining funding requirements from alternative sources, including debt, and will be pursuing this following the rights issue,” said the statement.
Mwana Africa said it decided to restart operations in the country because of improved economic and operating conditions.
It said operations at BNC, which also owns Shangani Mine and a smelter, also under care and maintenance, would resume in phases, with Trojan Mine initially producing concentrate.
BNC also owns the potentially world scale Hunters Road nickel project between Gweru and Kwekwe.
Mwana Africa chief executive Mr Kalaa Mpinga said now was the right time to resume BNC operations.
“Economic and operating conditions in Zimbabwe have improved markedly over the past few years, and following the recent subscription by China International Mining Group Corporation into Mwana, the time is right to proceed with the phased restart of operations at BNC, beginning with mining at BNC’s Trojan Nickel Mine.”
Nickel prices have been firming on the international market in recent months. In April, nickel averaged $17 800 a tonne and hit a peak of $18 000, prompting the Development Bank of Southern Africa to call on the government to take a keen interest in the resumption of activities at BNC.
Online Reporter