Bindura Nickel faces profit decline due to extended shutdown at Trojan Mine

Bindura Nickel Corporation (BNC) is warning shareholders and investors of a significant drop in profitability for the rest of the financial year.

This comes after a critical piece of equipment at their Trojan Nickel Mine (TNM) suffered a breakdown and required replacement.

The breakdown, detailed in the company’s annual report for 2023, involved the deterioration of the Sub-Vertical Rock Winder (SVR) bull gear.

While a replacement gear was procured and a project initiated to address the issue, unforeseen technical challenges have delayed completion. As of the announcement date, TNM has been shut down for six months, significantly impacting production.

BNC cites this extended shutdown, coupled with low global nickel prices, as the main reasons for the projected decline. The company expects to record a loss after tax for the six months ending March 2024, 8% higher than the loss experienced in the same period last year.

In light of this situation, BNC advises shareholders and the investing public to exercise caution when dealing with the company’s securities.

They recommend consulting professional advisors before making any investment decisions. The company plans to provide a further update by the end of April 2024.

“In recognition of the foregoing, the Board of Directors of BNC would like to inform the shareholders of the Company, potential investors, and the public, of the projected material decline in the Company’s profitability for the rest of FY2024 due to the protracted shutdown, coupled with the low nickel prices prevailing on the global markets. The decline in profitability may also have a material effect on the value of the Company’s securities.

“Based on a preliminary assessment of the consolidated financial results, the Company is projected to record a loss after taxation, during the six months ending 31 March 2024, which is 8% higher than the loss recorded in the comparative period last year.

“Accordingly, shareholders and the investing public are advised to exercise caution and to consult their professional advisers when dealing in the Company’s securities, until another announcement is made by the end of April 2024,” the company said.

The BNC is a member of Kuvimba Mining House Ltd, a state mining company which was recently taken over by Zimbabwe’s state sovereign wealth fund, the Mutapa Investment Fund.