BNC mulls huge capex plan after VFEX listing

BINDURA Nickel Corporation (BNC) has an ambitious capital programme the company intends to fund using resources to be raised from the US dollar denominated Victoria Falls Exchange (VFEX).

The company’s shareholders yesterday approved the proposed migration of BNC’s shares from the Zimbabwe Stock Exchange (ZSE) to VFEX at an extraordinary general meeting (EGM) yesterday.

Chairman, Muchadyi Masunda, told The Herald Finance and Business that all resolutions were approved unanimously at the EGM, especially the VFEX listing, paving the way for a smooth migration of shares.

“All resolutions were passed, therefore on Friday 17 December 2021, we will be heading to Victoria Falls to consummate the move, and by early next week, BNC shares will be trading on the VFEX,” he said.

The ZSE last Friday instituted a security halt in trading of BNC shares on the ZSE to allow for a smooth migration.
According to Mr Masunda, the group is excited about the prospects of listing on VFEX and intends to maximise on the opportunities for the benefit of shareholders.

“We are going to raise capital for development projects that include shaft deepening at Trojan Mine, re-develop the Hunters Road project and remove Shangani mine from care and maintenance,” he said.

The US$200 million Hunters Road project has remained at a pre-development stage for more than ten years with the company citing huge capital outlay required to implement the project as an impediment at a time global nickel prices were low.

Hunter’s Road has an indicated resource size of 200 404 tonnes of contained nickel and the deposit was discovered by means of a soil geochemical anomaly; initially explored through trenches.

Shangani Mine, which holds an estimated 65 000 tonnes of nickel ore has also remained under care and maintenance.
Mr Masunda said once all the mines start operating sustainably; the group would revisit the smelter project.

BNC has said it will rely on the continued stabilisation of the nickel prices for it to complete the smelter refurbishment project which has remained stagnated at 83 percent completion for several years due to lack of funding.

The smelter project which needed an estimated capital injection of US$26,5 million and was expected to be completed by the 2017/2018 financial year has been put on hold since 2019 with the miner taking a wait-and-see approach as its completion was hinged on increased nickel prices.

In 2015,the Group raised US$20 million through a bond issue to finance the restart of the smelter through a five-year bond with a coupon rate of 10 percent per annum and by 2017, the Company had used the raised funds to finance the project leaving it at 83 percent completion.

Over the years, the BNC has often said that they will only proceed with the completion of the smelter restart project when the nickel prices are around a threshold of US$16 500 per tonne.

VFEX is offering a raft of incentives including tax exemptions on capital gains and the ability to repatriate funds from a country where foreign exchange is in short supply to attract global capital.

Kuvimba Mining House Ltd, owns a majority stake in the nickel miner. For the half year ended 30 September 2021, BNC’s nickel in concentrate production was 2 553 tonnes, 13 percent lower than 2 929 tonnes produced in the same period last year.

At the EGM, other resolutions that were approved include giving directors’ responsibilities for the annual financial statements and giving scope of audited annual financial statements.-The Herald