BNC staff settlement plan on course

million rights issue to the end of August, after it initially failed to receive enough acceptance of the retrenchment and back-pay settlement plan offered to workers.
The offer includes the option of deferred cash, houses and BNC shares to settle severance and back-pay                        costs.
This week, Chief operating officer Mr Batirai Manhando said 99 percent of the employees had accepted the company’s settlement plan. He said the rights issue would enable BNC to resume operations at the Trojan Nickel Mine. 
“The only outstanding issue had been with staff,” he said. “And with agreement now being reached with staff, the rights issue can proceed.”
Mr Manhando said the response from creditors had been “very positive”. BNC operations were placed under care and maintenance in 2008, owing to low international nickel prices and an economic crisis in the country characterised by hyperinflation and exchange control regulations.
After restart, BNC sees production increasing, over a three-year period, to 7 000 tonnes of nickel in concentrate per annum at its Trojan Mine. Management said repairs to date have covered the main rock shaft bunton sets, main rock shaft ore, bin and waste conveyors, crushing plant steel structures, electrical panels and electric cables, overhauling crushers, conveyors and screens and hot commissioning of the crushing circuit.
Work on the main steel structures in the milling section remains to be done. Mr Manhando said the rights issue was sufficient to get the Trojan mine up and running but that further funds would need to be raised after production resumes taking the company through to being cash flow positive.
BNC has been trying to secure funding to restart its Trojan Nickel Mine through a US$21 million rights issue, which commenced on June 7. The rights offer, which               was originally scheduled to close on July 27, requires resolution of staff and creditor liabilities before it can proceed. 
However, BNC had not received sufficient agreement from employees in time and the rights issue had to be extended to August 31to give workers more time to respond to the company’s offer. BNC struggled to pay staff salaries at the end of July when it became clear that the rights issue was going to be delayed.
Mr Manhando said the group had run out of cash and was forced to suspend all activities that are not essential to keep its mines dewatered by August.
“Had the rights issue been concluded in July as planned we would not have had the cash crunch we experienced,” he said. The company’s shareholders approved all resolutions required to implement the envisaged transaction which were put to the vote at an extraordinary general meeting held in Harare late June.
Mwana Africa who is underwriting the rights issue has confirmed their commitment to the rights issue and to BNC.