Trading in Bindura shares halted on VFEX
TRADING in the shares of nickel producer, Bindura Nickel Corporation (BNC) has been halted on the Victoria Falls Stock Exchange (VFEX) after its major asset, Trojan Mine, was placed under reconstruction.
This also comes as the resources group has been facing operational challenges amid subdued global nickel prices, which have dropped about 25 percent year on year.
Although the reconstruction order was issued against Trojan Mine alone, which is the country’s primary nickel producer, this would have an impact on the entire group, resulting in its suspension, which is the first suspension at the US dollar-denominated exchange.
“The Victoria Falls Stock Exchange Limited (VFEX) hereby notifies the investing public of the voluntary suspension from trading in shares of Bindura Nickel Corporation Limited (BNC or the Company) with effect from 06 May 2024 following the placement of its major operating subsidiary, Trojan Nickel Mine Limited, under a Reconstruction Order in terms of the Reconstruction of State-Indebted Insolvent Companies Act (Cap 24:27) (Reconstruction Act),” said head of VFEX markets Mr Robert Mubaiwa in a notice to stakeholders.
According to the VFEX, the suspension is for the duration of the administration period, which was announced last week in the Government Gazette.
“The Reconstruction Act has among other provisions, the following clause: “6 (d) every disposition of the property, including rights of action, of the company and every transfer of shares or alteration in the status of its members, made after the commencement of the reconstruction, shall, unless the administrator otherwise orders, be void” Although the Reconstruction Order was issued against Trojan Nickel Mine Limited, BNC as the holding company is equally affected with the order pursuant to Section 4 (3) (a) of the Reconstruction Act.
“As a result, the administrator has applied for the voluntary suspension in trading of BNC shares on the VFEX,” explained Mr Mubaiwa.
The Securities and Exchange Commission of Zimbabwe (SecZim) approved the suspension of the resources group which migrated from the primary bourse Zimbabwe Stock
Exchange (ZSE) in 2021.
Earlier, the group cautioned that ongoing low nickel prices, high input costs—particularly electrical expenses—substantial mining depth, and low resource grade persist in negatively impacting its operations.
The group highlighted that despite the completion of the Sub-Vertical Rock (SVR) Project, which caused a temporary shutdown of BNC’s Trojan Nickel Mine (TNM) from September 22, 2023, the company continues to encounter various challenges that are expected to cause delays in the resumption of mining activities at Trojan.
In a trading update for the nine months to December 31, 2023, the resources group reported tonnes of ore mined at 177 179, decreased by 37 percent in comparison to 281 560 tonnes achieved for the same period last year.
In line with the decrease in the tonnes of ore mined, the tonnes of ore milled at 163 674, decreased by 42 percent from 281 135 tonnes recorded in a similar period last year.
Nickel in concentrates produced, at 1 314 tonnes, was 40 percent lower than the 2 192 tonnes recorded for the same period last year due to lower milled tonnage and grade of mined ore.