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BINDURA Nickel Corporation is reportedly close to sealing the US$4,5 million bridging finance facility with unnamed domestic banks for the second phase of the restart of Trojan Mine.
Expectations had been that BNC would announce progress on the facility at the company’s annual general meeting a fortnight ago but the nickel miner remained tight lipped on the issue.
However, in August this year BNC categorically stated that it “is in the process of seeking (US$4,5 million) debt finance from Zimbabwean banks for the reduced working capital requirement.”
The US$4,5 million short-term bridging finance is central to the implementation of the company’s revised mining plan and funding needs for the second phase of the restart of Trojan Mine.
BNC chief operations officer Mr Batirai Manhando could neither confirm nor deny the speculation saying while the issue was being pursued vigorously nothing had been finalised yet.
“We have not finalised yet, but something is brewing and at this stage we will not comment on that. Once we have signed we will come to the market with the story,” Mr Manhando said.
BNC recently completed the internal review of the revised mine plan at its Trojan Mine to target the higher grade zones of the ore body, known as “massives”, following the recent fall in the nickel price.
Prices of nickel plunged on the international market due to increased supply as new projects came on stream while the use of pig iron as a substitute for nickel in steel production increased.
This disrupted BNC forecast cash inflows at a time the nickel producer struggled to raise about US$16 million the company required for the next phase of the Trojan Mine production ramp up.
The occurrence of the massives enables higher grade ore to be mined and thus reduces the cost per tonne of nickel produced; hence less fresh capital is required for the second phase of Trojan start.
BNC management is already successfully applying the new mine plan at Trojan and is confident the plan will significantly also improve its cash flow apart from reducing working capital needs.
The restart of operations at the Trojan Nickel Mine (77 percent owned by Mwana’s Zimbabwe subsidiary, BNC) followed four years during which all BNC assets were on care and maintenance.
In September 2012, BNC carried out a restructuring and recapitalisation exercise involving US$23 million being raised and invested into BNC which has allowed it to restart the Trojan mine. First sale of concentrate to global commodities trader Glencore International took place in April 2013.
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