New Zimbabwe.com

Funding problems hit Trojan Mine restart

BINDURA Nickel Corporation Limited (BNC) says it has failed to raise additional funding through debt, to finance phase two of the restart of its Trojan Mine.
The company attributed the difficulties to negative market sentiments associated with the falling nickel price, coupled with the challenging markets creating shortfalls to BNC.
“The board of Bindura Nickel Corporation Limited announces that despite making significant progress at BNC over the past year, including the completion of the financial restructuring in September 2012 and delivering the first nickel in concentrate in April 2013, the company has so far been unable to raise additional funding through debt to finance phase two of the restart of Trojan Mine,” said BNC.
“Additionally, whilst Freda Rebecca remains cash generative, its cash contribution to the group in recent months has fallen in light of lower gold prices.”
BNC said the board, together with the company’s largest shareholder, Mwana Africa Plc are considering strategic options to preserve the integrity of the investment.
“Shareholders are therefore advised to exercise caution and where they are in doubt to seek independent professional advice before dealing in the shares of the company until such time as the matters currently under consideration have been finalised,” the company added.
BNC suffered an operating loss of US$8 million for the year ending September 30 2012 from another loss of US$6,2 million suffer during the same period last year.
Cost of sales for the period is adjusted for reversals arising from provisions raised for the settlement of labour back pays at US$5,4 million and litigation cases at US$2,1 million that were previously provided are no longer applicable following the settlement with labour.
A provision for retrenchment of US$8,5 million was raised, 25 percent of which was settled in cash in October 2012 (a cash outflow of US$3,4 million inclusive of termination) and the balance taken as either deferred payment of US$3,6 million. The deferred amount is payable in December 2014 for employee creditors.
Long term liabilities increased by US$18,9 million year-on-year.
This was due to full utilisation of the US$10 million shareholder loan secured in September last year which amounted to US$10,4 million including interest and the reclassification of short-term liabilities to long term liabilities.Advertisement