BINDURA Nickel Corporation (BNC) sunk a total of US$5.1 million into capital expenditure during the full year ended March 30, 2020 as it continues to undertake various capital projects at the mine.
In a statement accompanying financial results for the period under review, BNC indicated that the capital projects include shaft re-deepening, exploration drilling, as well as the smelter restart project, which was now at 83 percent completion.
“Total capital expenditure for the year was US$5.1 million, mainly in respect of the following projects: shaft re-deepening, new dump trucks, new LHDs, exploration drilling.
“The smelter restart project is still at 83 percent complete while the refinery and Shangani Mine remained under care and maintenance,” said the nickel producer.
In the full year under review, BNC sold 5 685 tonnes of nickel in concentrate compared to 6 410 tonnes in the comparative period in 2019.
The 11 percent decrease in sales tonnage was in line with production, which was lower than the prior year’s output.
Global nickel prices improved during the period under review, leading to an eight percent year-on-year increase in the average price realised by BNC for the sale of its nickel in concentrate.
Despite the improved price performance, annual turnover of US$52.4 million was one percent lower than the US$54 million realised in the comparative period last year.
“This was in sync with the decrease in sales tonnage referred to above. Cost of sales decreased from US$40.3 million last year to US$37.7 million in the year under review, mainly due to lower production.”
Gross profit increased by seven percent from US$13.7 million in the comparative period last year to US$14.7 million.
The nickel miner said this, to a large extent, is a reflection of the corresponding decrease in the cost of sales.
“However, operating profit decreased by 86 percent to US$2.8 million, compared to the prior year’s achievement of US$20.2 million.
“This profit erosion was mainly attributable to reduction in the net foreign exchange gains recognised on the introduction of the Zimbabwean dollar in the prior year amounting to US$17 million, versus US$0.5 million realised in the year under review.
“However, profit and total comprehensive income of US0.9 million, was higher than prior year restated amount,” said BNC.
During the period under review, the firm’s balance sheet reflects that total equity increased by 10 percent year-on-year.
Non-current liabilities of US$30 million decreased by four percent, mainly due to a decrease in the long-term portion of interest bearing loans.
Current liabilities decreased by 31 percent from US$20,5 million to US$14,2 million, mainly due to a decrease in the short-term portion of interest bearing loans and related party payables as a result of a write -off.
Current assets decreased by 18 percent, mainly driven by a decrease in trade and other receivables.
And in terms of the company’s Share Option Scheme (2016), 11 474 206 ordinary shares were issued to beneficiaries of the scheme during the year under review, resulting in the issued share capital increasing from 1 239 656 591 to 1 251 130 797 ordinary shares.