BINDURA Nickel Corporation (BNC) subsidiary, Trojan mine, is now target high-grade nickel ore known as the ‘massives’ as prices of the metal continue to weaken, the company revealed this week.
BNC’s holding company, Mwana Africa, said the move would see the cost per tonne of nickel produced coming down, making the operation more economic in current conditions.
Producers worldwide are under pressure from low nickel prices which have been blamed on subdued demand from alloy-makers amid signs of weakness in sectors of China’s economy that are heavy users of the metal.
In a statement Mwana Africa said: “BNC has sold over 1,000 tonnes of nickel since the first concentrate was sold in April 2013 following the restart at Trojan.
“Management is already successfully applying the new mine plan at Trojan and is confident that the new plan will significantly improve BNC’s cash flow and reduce its working capital requirements.
“BNC is in the process of seeking debt finance from Zimbabwean banks for the reduced working capital requirement.”
Last month Mwana Africa said it had launched a cost cutting programme at both corporate and project levels in response to weakening commodity prices, which have squeezed cash flows and damaged sentiment towards junior miners.
Group CEO Kalaa Mpinga said the firm would emerge stronger mining group in the coming financial year.
Results for the twelve months to March 31 showed that group revenue was up 34% to US$109.2 million.
Gold sales from the Freda Rebecca mine totalled 65,350 ounces and average cash costs reduced 13.6% in the year to US$897 per ounce.
However, a US$43.7mln impairment to the BNC project, due to low nickel prices, meant the company made a loss of US$43.5mln.
Mwana spent US$15.3mln on exploration during the year and raised US$32.4mln of new capital. At the end of the period it had US$15.2mln of cash.
Said Mpinga then: “A considerable amount has been achieved by the Mwana group over the course of the past financial year including increasing the production rate at Freda Rebecca by 37% to over 65,000oz and successfully concluding the recapitalisation and restructuring of BNC, which in turn led to the restart of the Trojan Nickel Mine and, post period, sale of first concentrate to our off-take partner, Glencore Xstrata.Advertisement

“Whilst we have, as a result of a steep decline in the nickel price, decided to impair BNC in our accounts this year, current reviews of BNC’s mine plan may result in some reversal of this impairment in the future.
“Our results show a profit before impairment of US$0.5m, which is the first since 2007 and a notable achievement by the company.
“Post the financial year end our share price has suffered from a combination of weakening commodity prices, which have negatively impacted our cash flows at group level, and a decline in general market sentiment to junior miners.
“In response to these challenges we have announced a cost cutting exercise at corporate and project levels; this, together with securing necessary funding and the underlying quality of our projects, will see Mwana emerging as a stronger mining group in the coming financial year.”