BNC expects output to pick up next month

BINDURA Nickel Corporation (BNC) says it expects production to increase in the next two months following the replacement of the damaged Sub-Vertical Rock (SVR) winder bull gear.
The nickel miner’s ore mined for the quarter ended June 30, 2023 increased eight percent to 117,249 tonnes from 108,632 tonnes in the comparative period underpinned by the introduction of new underground load, haul and dump (LHD) equipment.
The Victoria Falls Stock Exchange-listed miner said during the quarter, the run-of-mine ore was still low due to the deterioration of the SVR winder bull gear, which subsequently resulted in a 70 percent decline in SVR capacity. BNC noted that the decline in SVR capacity also constrained development work planned for the quarter as ore hoisting was prioritised over waste hoisting, causing a delay in the unveiling of planned mining areas.
“The replacement of the damaged SVR winder bull gear during the period September to October 2023 is expected to boost production. In addition, it is anticipated that a combination of the old, new, and hired mobile equipment will increase the availability of equipment, which will result in an increase in production and thus, revenue and profitability,” BNC said in a trading update.

The miner said ore head grade, at 1,02 percent nickel, was two percent lower than the 1,04 percent nickel grade achieved in the same period last year, due to the unavailability of high-grade massive ore sources.
BNC said the concentrator plant performance was, however, compromised by intermittent breakdowns driven by the unavailability of critical spares for various components of the plant.
During the quarter, nickel in concentrate produced, at 823 tonnes, was nine percent lower than the 902 tonnes produced in the same period last year, reflecting the adverse impact of the lower grade of ore processed.
“Unit costs increased during the period under review at the back of the high cost of maintaining aged underground mining mobile equipment and the increase in local operating costs, which was driven by exchange rate disparities. In addition, the lower nickel in concentrate production had a negative impact on unit costs,” BNC said.
While the all-in-sustaining cost, at US$18,812 per tonne, increased by 15 percent from the same time last year, the cash cost for the quarter was two percent lower.
During the quarter, the average London Metal Exchange (LME) nickel price of US$21,933 per tonne was one percent higher than the US$21,783 per tonne that was forecast for the quarter.
“Despite the mineral driven boom in export earnings, the Zimbabwean economy has continued to experience significant headwinds such as hyperinflation and exchange rate disparities, amongst other factors,” the company said.
Sales of nickel in concentrate for the period, at 799 tonnes, were 19 percent lower than the 989 tonnes sold during the same period last year.
“The sales decrease was in line with the decline in production. As a result of the disproportionately high operating costs and low production, the company incurred a loss for the quarter,” BNC said.
Pessimism over the unfavourable macroeconomic situation and rising nickel supply is projected to cause a downward trend in LME average nickel prices in the quarter ending September 30, 2023.
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