BNC said it is now seeking borrowing powers to raise up to US$50 million from shareholders to revive operations, in addition to entering into a US$10 million convertible loan facility with its major shareholder, Mwana Africa, which owns 53% of BNC
“The corporation embarked on a funding exercise in March 2011. The fund-raising initiative received a very positive response and was in an advanced state when the Indigenisation and Economic Empowerment Regulations were promulgated,” Mpinga said.
The US$10 million would be for sustaining care and maintenance at its Trojan Mine, the US$50 million would be for reviving mining operations.
Following the release of the SRK report which found the business plan for the restart of operations at Trojan both realistic and achievable, the mining company has continued to miss funding deadlines.
Once funding is secured, the group expects to restart operations at Trojan, initially at a rate of 10 000 tonnes a month and ramping up to 70 000 tonnes over a period of a year.
Once a steady rate has been achieved at Trojan, BNC expects output to rise to 870 000 tonnes of ore per year at an average head grade of 0,9%.
The group has already signed an off take agreement with Glencore International AG, the world's biggest commodity trader. Under the agreement, BNC will sell all nickel concentrate produced at Trojan to Glencore.
BNC, which also owns Shangani Nickel Mine and the Hunter's Road concessions in the Midlands Province will convene an annual general meeting in three weeks to consider the proposals.
The development of Hunter's Road, which requires US$100 million, is on hold. The measured and indicated resource at Shangani is pegged at a total of 6,9 kilo tonnes and A grade ore at 0,46 percent nickel, which would yield 31 820 tonnes of nickel.
Hunter's Road should see output of about 243 230 tonnes with 45,06 kilo tonnes at an average grade of 0,54%.
BNC, which is the only integrated nickel mine, smelter and refinery complex in Southern Africa, has the potential to become a processing centre for materials produced throughout the region.
Post published in: Business