BNC seeks US$50m for revival

in addition to entering into a US$10 million convertible loan facility with its major shareholder, Mwana Africa.
The US$10 million would be for sustaining care and maintenance at its Trojan Mine, which began three years ago when it closed down. The US$50 million will be for reviving mining operations.
Following the release of the SRK report which found the business plan for the restart of operations at Trojan both realistic and achievable, the mining company has continued missing funding deadlines.
BNC chairman Kalaa Mpinga recently blamed empowerment laws for scuttling its plans to raise capital. Mwana Africa owns 53 percent of BNC.
“The corporation has embarked on a funding exercise in March 2011. The fund-raising initiative received a very positive response and was in an advanced state when the Indigenisation and Economic Empowerment Regulations were promulgated on March 25,” Mr Mpinga said.
Once funding is secured, the group expects to restart operations at Trojan, initially at a rate of 10 000 tonnes a month and ramping up to 70 000 tonnes over a period of a year.
Once a steady rate has been achieved at Trojan, BNC expects output to rise to 870 000 tonnes of ore per year at an average head grade of 0,9 percent.
The group has already signed an offtake agreement with Glencore International AG, the world’s biggest commodity trader.
Under the agreement, BNC will sell all nickel concentrate produced at Trojan to Glencore.
BNC, which also owns Shangani Nickel Mine and the Hunter’s Road concessions in the Midlands Province will convene an annual general meeting in three weeks to consider the proposals.
The development of Hunter’s Road, which requires US$100 million, is on hold. The measured and indicated resource at Shangani is pegged at a total of 6,9 kilo tonnes and A grade ore at 0,46 percent nickel, which would yield 31 820 tonnes of nickel.
Hunter’s Road should see output of about 243 230 tonnes with 45,06 kilo tonnes at an average grade of 0,54 percent.
BNC, which boasts being the only integrated nickel mine, smelter and refinery complex in Southern Africa, has the potential to become a processing centre for materials produced throughout the region.
Trojan and Shangani have a hoisting treatment capacity of 2,1 kilo tonnes per years.
Mwana Africa has been grappling with ideas on how to deal with indigenisation given that it owns 53 percent of the group.
Government recently rejected the indigenisation plan of its local gold unit, Freda Rebecca, and advised it to amend and submit a proposal which is in line with the country’s indigenisation and empowerment laws.