By Business Reporter – Friday 9 August 2019
HARARE (Mining Index) – ASA RESOURCES Group (ASA), the ultimate holding company in Bindura Nickel Corporation (BNC) has announced that it will relinquish its 74.73 percent shareholding stake to a local Zimbabwean mining company.
ASA Resource acquired majority shareholding in BNC in 2003 taking over from Anglo American Corporation Limited.
In a cautionary statement released, BNC board chairman Muchadeyi Masunda commented:
“Bindura Nickel Corporation Limited is advising its shareholders that the ultimate holding company BNC, ASA Resource Group Plc (currently under administration), has entered into a Sale and Purchase Agreement (SPA) with a third party in relation to the 74.73% shareholding in BNC.”
“The third party is a Zimbabwean based mining entity with interests in the mining and production of ferrous metals, non-ferrous metals and precious metals.”
The abandonment of BNC by ASA comes a week after BNC released its results for the year ended 31 March 2019, in which despite sitting on over 400 000 tonnes of nickel reserves BNC has experienced lower nickel production, depleted nickel concentrate, declining head grade, a fall in its non-current liabilities, a drop in current assets and shrinkage in gross profit among other factors.
Last year, an unnamed third party was said to be a United Kingdom based nickel producer with complementary interests in southern Africa.
Masunda however cautioned shareholders to exercise caution when dealing in the company’s securities until a full announcement has been made.
BNC has great potential, with Trojan Mine sitting on 71 000 tonnes of nickel deposits, Shangani Mine 65 000 tonnes, Hunters Road 200 000 tonnes while the new Damba Silwane exploration opportunity has estimated reserves of 67 000 tonnes.
Shangani Mine has been on care and maintenance, Hunter’s Road is at pre-development stage while the Damba Silwane is still an exploration venture. With Trojan Mine being the only operational mine, nickel production was 5.3 percent lower from the previous year’s output.
The downward trend was also experienced in the half year results for year ended 30 September 2018 where nickel production at Trojan went down 11 percent year on year to 3.076 tonnes.
The nickel producer has also been unable to complete smelter project, which remains at 83 percent completion whose conclusion depends on funding and improvement in nickel price. ENDS//
