Victoria Falls Stock Exchange-Listed nickel miner, Bindura Nickel Corporation (BNC) spent US$ 3.5 million in the first six months of its 2023 financial year to September 2022 on replacing its old and obsolete underground mining equipment which should give impetus to its newly adopted low-grade, high-volume strategy.
The Company’s production performance has been negatively impacted by a decline in the footprint of the high grade massives resource which necessitated a rapid transition in the mining model from a low-volume, high-grade strategy to a low-grade, high-volume strategy.
“The Company continued with its on-going program to replace old and obsolete underground mining mobile equipment. Total capital expenditure for the period amounted to US$3.5 million,” the group said in its H1-23 financial update.
“The focus during the remainder of the year will be on recovering the Nickel in concentrate production deficit and managing costs. The equipment recapitalization program will have a positive impact on the ore volumes the Company can produce and the rate of development underground, thus addressing the grade challenges, and ultimately the cashflows generated from operations.”
Unfortunately, the transition is behind schedule due to a delay in the delivery of new underground mining mobile equipment which is a prerequisite to the realization of the new mining strategy.
The delay in the delivery of equipment was due to disruptions in the global supply chains, as a result of the protracted effects of the COVID-19 pandemic and the ongoing geo-political tensions related to the Russo-Ukraine conflict.
“The Company is expecting delivery of most of the acquired mining mobile equipment before the end of the calendar year 2022. The new equipment will enable the transition into the new mining strategy, leading to an anticipated upswing in ore volumes and a return to profitability in the second half of FY2023,” said the group.
The Group‘s nickel sales volume of 2,146 tonnes, was lower than last year’s sales of 2,549 tonnes. The average LME Nickel price of US$25,542 per tonne was however 40 percent higher than the previous year’s price of US$18,233 per tonne, reflecting the global increase in Nickel prices.
Total comprehensive loss for the period was US$5.4 million, compared to total comprehensive income of US$5.8 million for the same period last year, reflecting the negative impact of decreased nickel sales volume.
Revenue decreased by 8 percent from US$35.3 million for the same period last year to US$32.5 million, on account of low nickel sales volume during the period.
Cost of sales increased by 29 percent to US$31.5 million, compared to US$24.3 million for the same period last year.
“The increase in cost of sales was mainly as a result of the increase in depreciation charges on capitalisation of assets, increase in local operating costs which tend to be influenced more by the alternative market exchange rate, and the high cost of maintaining the old and obsolete mining equipment,” said the group.
