Bindura Nickel returns to profitability

Published: 11 December 2013

Bindura Nickel's revenue for the six months to September amounted to $21.4 million after the mine sold 2,191t of nickel concentrate according to unaudited results for the interim period published by parent company Mwana Africa.

All 2,191t of nickel in concentrate sold was sold under the terms of BNC's offtake agreement with Glencore.

In the period, Bindura lifting of its care and maintenance posting a gross profit of $11.88 million and a pre-tax profit of $4.76 million from a loss position of $8.59 million in the year ago period.

The six month period to September has been characterised by the ramp up of production and the shift to the new mine plan, with record production months in both August and September. The impact of the new mine plan on costs is most clearly seen in the low costs of $9,689/t for the September 2013 quarter, down from $19,251/t in the June 2013 quarter.

The restart of operations at The Trojan Nickel Mine followed four years during which all of the BNC assets were on care and maintenance. In September 2012, BNC carried out a restructuring and recapitalisation involving $23m being invested into BNC which has allowed it to restart the Trojan mine. First sale of concentrate to Glencore took place in April 2013.

Following the successful restructuring of BNC and commencement of the restart programme at the Trojan nickel mine, BNC sold its first nickel in concentrate in April 2013. This first shipment of concentrate marked a major milestone in the restoration of the Company's nickel assets, following a four year period of care and maintenance.

In August 2013 Mwana and BNC announced that the Trojan mine plan had been revised to target the higher grade zones of the ore body, known as "massives". The occurrence of the massives enables higher grade ore to be mined and thus reduces the cost per tonne of nickel produced, significantly improving the prospects of the Trojan mine.

In October 2013, Mwana announced the completion of a competent person's review by SRK Consulting (UK) Limited of the updated Trojan mine plan, in which SRK confirmed that the plan is realistic and achievable. This enabled BNC to update Trojan's ore reserves statement to total proven and probable reserves of 3.168Mt at an average grade of 1.04% for 32,975 tonnes of nickel, a 28% increase to the previously reported Trojan reserves as at 31 March 2010 of 25,810 tonnes of contained nickel.
- businessdaily

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