Bindura Nickel Corporation (BNC) nickel production for the period April to June 2022 was 24 percent lower than for the same period last year largely as a result of low grade ore processed.
The Victoria Falls Stock Exchange (VFEX) listed nickel producer, in a trading update said tonnes ore milled increased by 16 percent in comparison to the corresponding period last year.
“This marks the transition to the low-grade high volume mining strategy which has been occasioned by declining massives volumes,” Mr Conrad Mukanganga, the group’s secretary said.
He said that tonnes ore mined for the quarter increased 13 percent in the same period due to the delayed commissioning of the Re-deep Project attributable to unforeseen technical challenges.
Ore head grade was 28 percent lower than the grade achieved in the same period last year, due to the declining missives strike length, which led to a reduction in the volume of missives, coupled with constraints on the rate of development due to underground mining mobile equipment.
Mr Mukanganga said that during the period under review, the high cost of maintaining the aged underground mining mobile equipment fleet as well as the increase in local operating costs, coupled with the lower nickel in concentrate production resulted in an increase in unit costs.
He said that the cash cost per tonne for the quarter was 58 percent up on the cost for the same period in prior year, while the all-in-sustaining cost per tonne increased by 55 percent.
According to BNC, the average London Metal Exchange (LME) nickel price of US$29,029 per tonne was 67 percent higher than the price of US$17,343 per tonne which was achieved in the comparative period the previous year largely due to global high demand.
For the quarter under review, nickel in concentrate sales were 14 percent lower than the same period last year due to a delay in the renewal of the off-take agreement, which expired early March 2022.
“A new two year contract was signed in early April 2022 and export shipments resumed in the following month,” said Mr Mukanganga.
He added that nickel prices are expected to be bullish for the remaining calendar of the year.
Mr Mukanganga said that the acquisition of new underground mining mobile equipment to replace the old and unreliable units is underway.
“In addition, while awaiting delivery of new equipment, the company is complementing the current fleet by hiring equipment from different service providers.
“Both the new and hired mobile equipment is expected to increase the availability of equipment and ultimately increase production,” he said.
BNC had its shares delisted from the ZSE on December 15, 2021 and became the fourth company to be listed on the USD-denominated stock exchange VFEX on the 17th of the same month.
Early in the year said that the company had an ambitious capital program that will be sustained through funds raised from the USD denominated Exchange.
VFEX is offering a raft of incentives including tax exemptions on capital gains and the ability to repatriate funds from a country where foreign exchange is in short supply to attract global capital.
Kuvimba Mining House Ltd, owns a majority stake in the nickel miner. – Herald