BNC profit up 26pc

HARARE - Bindura Nickel Corporation (BNC)’s profit increased 26 percent to $2,8 million during the half year ended September 30, 2018 from $2,2 million reported during the previous comparable period on the back of improved global nickel prices.

The listed miner reported a nine percent increase in revenue to $26,2 million from $24,1 million recorded in prior year as nickel prices responded to the favourable market sentiment that was driven by steep rises in demand in the electric motor vehicle industry.

Muchadeyi Masunda, the listed miner’s chairperson, yesterday said total equity increased by six percent while non-current liabilities of $25,9 million declined seven percent.

“Current liabilities increased by eight percent from $32,8 million to $35,5 million mainly due to an increase in trade and other payables which in turn increased mainly as a result of a surge in local input costs,” he said.

An average nickel price was 40 percent higher to $9 001 per tonne compared to the $6 422 per tonne realised during prior year.

Sales of nickel concentrate declined 14 percent to 2 980 tonnes compared to 3 485 tonnes reported during prior year.

Masunda said the reduction is due to a decline in production as well as logistical challenges experienced in moving outbound material.

Nickel production was 3 076 tonnes lower than the 3 460 tonnes output reported in prior period in line with lower year on year head grade and recovery.

Ore milled was up 22 percent to 206 451 tonnes during the review period compared to 171 578 tonnes milled in the same period last year due to an improvement in the availability of mining equipment following capital investment in the area.

Head grade was 1,87 percent during the review period compared to 2,19 percent reported during the same period last year.

The all-in sustaining cost of producing nickel in concentrate increased by 24 percent year on year from $5 567 to $6 900 per tonne, driven by lower production and rise in local costs.

“The industrial relations atmosphere was reasonably calm throughout the year. We continue to explore ways of skills retention, including a productivity related bonus scheme as well as non-monetary initiatives such as creating an environment for employee growth and employer recognition,” Masunda said.

BNC’s $21,5 million smelter project, which was expected to be completed last year, is 83 percent complete.

“The project’s completion has been put on hold pending an improvement in the nickel market fundamentals. It only becomes viable to pursue smelting of at least $16 200 per tonne.

“Stakeholders are assured that as soon as price fundamentals have improved accordingly, the board will ensure that the project is completed,” Masunda said.

In 2015, the troubled miner raised $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. A total of 26,5 million was required for the smelter restart project.

Masunda said the company is in compliance with the covenants of the bond trust deed as amended and agreed with the bond holders.

Earlier this year, BNC managed to secure a $5 million asset financing facility with a local bank to finance capital projects and the facility is secured by property title deeds with an interest rate of 10 percent per annum.

The miner said all commitments to bondholders as at September 1, 2018 amounting to $3,3 million were honoured.

 

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