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BNC pins hopes on feasibility study

BINDURA Nickel Corporation (BNC) has pinned its hopes on feasibility studies for its US$200 million Hunters Road mine and the finalisation of its smelter, businessdigest has learnt.

Melody Chikono

The mine is sitting on approximately 200 000 tonnes of nickel, but BNC CE Batirai Manhando says this will require running a sizeable funding tab to conduct tests that will result in the corporation realising in excess of 12 000 tonnes of nickel per annum.

Optimal production at all BNC mines is expected to feed into the planned smelter and help lower costs.

Speaking at BNC’s analysts and media briefing in the capital on Wednesday, Manhando said a number of macro-economic fundamentals on both the local and global scenes were key to unlocking this massive project.

Local macro-economic conditions have forced BNC to halt its smelter project, which is now 83% complete. Management says it has not realised value from the project due to cashflow deficits arising mainly from the outturn on the LME nickel price.

The price has averaged US$12 000 per tonne since the project commenced in 2015 compared to the average LME price of US$16 000 per tonne forecast.

However, Manhando sees the price see hitting US$70 000 per tonne in the next three year driven by an upsurge in demand.

“Hunters Road will need about US$2 000 000 for us to be able to do the tests we want to do. We are going to be doing some work for us to define some metallurgical plan we would take advantage of the three years. We will then do a feasibility study to determine whether we are able to produce 10 000 to 1200 tonnes in terms of the smelter. We hope that in in the next three years we will be able to do so,” he said.

He added that the company had identified possible suitors who were willing to partner BNC in return for an offtake deal.

The average LME nickel cash settlement price fell by 5,6 % in 2019 to US$12 388 per tonne compared to US$13,278 in 2018.

In the full year to March 31 2019 (FY19), BNC spent US$5,4 million in capex investments for the installation of steel works for the loading station , sub vertical rock winder mechanical and electrical control upgrades , decommissioning of the services in the Service Winze shaft and civil works for the 44/0 Level spillage handling hoist.

BNC’s basic earnings during the period rose to US$1,1 from US$0,5 cents per share while EBDITA rose 1 222% to US$25,6 million compared to US$ 11,5 million in the prior years.

Revenue rose marginally by 1% year-on-year to US$4 million, while profit after tax went up 11 % to US$13,5 million on last year’s figure of US$ 5,8 million.

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