Bindura Nickel Reveals Comprehensive Recovery Plan

Bindura Nickel Reveals Comprehensive Recovery Plan

Despite riding through low nickel sales volumes and global low prices which heavily weighed down its financial performance, Bindura Nickel Corporation (BNC) is angling to end the 2024 financial year in a strong position.

To achieve a return to profitability, the Victoria Falls Stock Exchange-listed entity has outlined several strategies geared at improving its financial performance.

In the half-year ended September 31, the mining house saw revenue generated drop to US$18,5 million from US$32,5 million in the comparable period last year.

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“Revenue decreased by 43 percent from US$32,5 million reported in the same period last year to US$18,5 million on account of low nickel sales volume and low nickel prices during the period,” noted the company’s chairman, Mr Muchadeyi Masunda.

“Cost of sales decreased by 22 percent to US$24,7 million compared to US$31,5 million for the same period last year.

“The decrease in cost of sales was mainly due to a lower run-of-mine. Resultantly, the company recorded a gross loss of US$6,2 million compared to a gross profit of US$1,05 million reported in the same period last year.”

Mr Masunda added that a loss from operating activities of US$8 million was incurred compared to a loss of US$4,9 million in the first-half of 2022.

The loss is reflective of the low revenue recorded during the period. The total comprehensive loss for the period was US$6,7 million, compared to a total comprehensive loss of US$5,4 million for the same period last year.

Ore milled was 163,674 tonnes, which was 29 percent lower than the 230,248 tonnes milled in the same period last year due to lower mined volumes.

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Nickel in concentrate production for the half-year to September 30, 2023 was 1,314 tonnes, 31 percent lower than the 1,918 tonnes produced in the same period last year.

“The decrease was attributable to the lower ore mined and milled. Resultantly, nickel sales volume was 1,416 tonnes, 34 percent lower than last year’s sales of 2,146 tonnes.”

However, despite the challenging nickel price outlook, the mining house has strategically implemented measures aimed at ensuring a return to profitability and increased cash generation within the foreseeable future.

According to the financial report, the directors have assessed the group’s going concern position by considering the current trading activities, financial position and projected funding requirements of the group’s operating subsidiary, Trojan Nickel Mine Limited, for at least 12 months from the reporting date.

“While the group incurred a loss before taxation of US$8,9 million for the six months ended 30 September 2023 (full year 2023: loss of US$24,2 million), and as of that date, its current liabilities exceeded current assets by US$22,3 million (31 March 2023: current liabilities exceeded current assets by US$13,4 million), its ability to continue as a going concern hinges on its capacity to increase production and generate positive cash flows,” reads part of the report.   Chronicle

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