BNC extends $20m bond issue period

bncBusiness Reporter
BINDURA Nickel Corporation’s $20 million fixed term bond issue is still open following extension of its floatation from last week’s closing date to end of next month.

Subscription had initially been scheduled to close on the 23th of this month, but will now close on February 27, 2014 to allow investors more time to buy the security. BNC company secretary Mr Conrad Mukanganga last week said BNC’s board approved changes to the timetable for application of subscription and receipt of the applications to end of February to give the investors more time.

“The timetable has been changed at the request of prospective bond holders who require more time for their internal processes following the Christmas and New Year holiday periods,” he said. The bond issue opened for subscription on November 24, 2014.

Mr Mukanganga said other than changes to the timetable, as announced, terms and conditions of the bond and information memorandum remained unchanged.

BNC floated the $20 million bond facility to raise funding required by the company to restart its smelter refinery; mothballed at the of the height of economic meltdown in 2008.

Mining operations were also suspended at the time. Rehabilitation and refurbishment of the smelter requires $26,5 million and BNC had earlier said half the amount would be borrowed and the balance raised internally.

An independent study of accelerated restart plan the smelter was completed last year by Hatch Gobal. The study was a technical and economic assessment of potential refurbishment and restart of the smelter complex.

The plans to refurbish the plant and process concentrates, according to results of the study, were confirmed to offer significant financial and strategic benefits to BNC.

Key benefits include reduction in transport costs related to selling concentrates and potential to increase revenue by producing and selling higher-value nickel leach alloy.

“We can grow our revenue stream by moving rapidly up the value chain from current production and sale of concentrate, with the associated transportation saving cost of this, to production and sale of higher value nickel leach alloy,” said Mwana chief executive Mr Kalaa Mpinga.

“BNC is a 76,3 percent owned subsidiary of the AIM listed multi-commodity mining group. Based on the results of the independent study, the company plans to have the BNC smelter in operation in the first half of this year, and contributing to cash flows by 2016.

Further, opportunities for the company exist beyond the smelter restart, including potential to increase volume through development of BNC’s Hunters Road Mine Project.

They also include investment in adaptation of the smelter to treat platinum group metals, contingent on securing platinum group metal feedstock; and restart of the BNC refinery, currently on care and maintenance, to treat nickel leach alloy and PGMs.

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