adminasked to approve the rights issue at an extraordinary general meeting on June 29.
After the meeting and assuming approval is received, the rights issue is planned to close on July 27. Mwana, through its subsidiary Zimnick Ltd, will underwrite the cash call.
“Completion of the rights issue is conditional upon, inter alia, satisfactory resolution of legacy creditor, staff retrenchment and backpay liabilities at BNC in such a way that makes the restart of Trojan viable,” said Mwana Africa in a statement on its official website.
BNC’s operations have been under care and maintenance since November 2008. Mwana Africa has been grappling with how to deal with indigenisation, as it owns 53 percent of the company.
The indigenisation policy requires foreign-owned companies, including mines, to turn over the majority stakes to black indigenous people.
BNC directors estimate approximately US$33 million is required to restart Trojan Mine, with about US$21 million taking the mine into production.
A further US$12 million will also be required to ensure that the firm gets into a positive cashflow position. The management is confident they can secure the remaining funding from alternative sources, including debt.
Mwana chief executive Mr Kalaa Mpinga said: “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.
“I look forward to updating shareholders on the result of the rights issue in due course.”
BNC is a Zimbabwe-based nickel mine listed on the Zimbabwe Stock Exchange and which owns the only integrated nickel mine, smelter and refinery operation in Africa.
BNC owns and operates the Trojan Nickel Mine, Shangani Nickel Mine and a smelter and refinery, all of which are currently under care and maintenance.
In addition to these assets, BNC also owns the potentially world-scale Hunters Road nickel project, situated in the Southern Greenstone belt of central Zimbabwe.
BNC management considers that economic and operating conditions in Zimbabwe have improved significantly and, having considered a number of potential restart scenarios, has decided to restart operations in phases, beginning with the Trojan Nickel Mine which will initially produce concen-trate.
In February 2011 BNC entered into an off-take agreement with Glencore, whereby Glencore would buy all of the concentrate produced at the Trojan mine.
Online Reporter