After four years of inactivity, Bindura Nickel Corporation is racing to restart after the group successfully raised US$23 million through a rights issue to assist the recapitalisation of the mine. BNC's Trojan Mine, a smelter and a refinery have been on care and maintained since September 2008 as a result of a collapse in the global nickel prices and the country's harsh economic environment.

However, following dollarisation and an improved operating environment in Zimbabwe coupled with a recovery in the global nickel price, this was the right time for BNC to restart.

Since 2008, it has been difficult for the company to raise adequate capital for recapitalisation until in June this year when its major shareholder, Mwana Africa, offered to underwrite a US$21 million rights issue to assist the recapitalisation of the group. For the past four years, BNC largely concentrated on raising funds to keep the equipment in good state.

The care and maintenance was designed to preserve the condition of existing infrastructure to produce the cost and risk of returning to operations. The programme included dewatering of the mines, periodic tests of key machinery and monitoring of major plant structures.

At BNC's annual general meeting on September 22, 2011, shareholders approved US$10 million from Mwana Africa, the majority shareholder to undertake care and maintenance.

The loan facility from Mwana Africa was considered to be the most favoured in terms of tenor and interests rate, being 10 years at Libor plus 7 percent. On June 7, this year, BNC made a formal announcement of its intention to raise money through a rights offer.

An extraordinary general meeting was held on June 29, where shareholders approved the cash call and the placement of 384 million shares as part of back pay, retrenchment and liability settlement plan.

A condition to the rights issue proceeding was that a satisfactory resolution be reached with creditors and staff on settling their liabilities. While agreement was reached with creditors fairly early in the process, the negotiations with staff took longer and resulted in the rights issue closing date being postponed from the original target date of July 27 till August 31.

The agreement was eventually reached with employees allowing the rights issue to proceed. Part of the settlement solution with creditors and staff was that they could take shares in lieu of their liabilities. Staff and creditors now hold a combined 31,74 percent stake in BNC.

The placing of shares, a culmination of a difficult road the nickel miner has had to travel over the last few years, set the platform for the restart of its Trojan Nickel Mine based in Bindura.

The strategy is to restart operations in a phased manner with the first step being the restart of the Trojan Nickel Mine. A recent visit at the mine confirmed that significant progress had been made.

A lot of pre-start work has already been done both underground and on the surface plant. Drilling is in progress and the surface equipment including concentrator flotation has been adequately refurbished.

Major repairs have also been done on the main rock shaft bunton sets, main rock shaft ore, bin and waste conveyors, steel structures, electrical panels and electric cables, overhauling crushers and hot commissioning of the crushing circuit.

"It has been a very painful journey but we are almost there," said BNC chief operating officer Mr Batirai Manhando after the tour of the complex.

"This has been a collective effort. We had support from the shareholders, workers and the community."

His sentiments were similar to those made by chairman Mr Kalaa Mpinga at the company's AGM.

"We were in intensive care, but we are now on bed, and hopefully we will be out of hospital next year."

A report done by SRK Consulting in August 2010, found that the business plan for the restart of Trojan was realistic and achievable. The report did not cover the restart on the smelter and refinery.

SRK also confirmed a mineral resource of 3,53 kilo tonnes at mean grade of 1,29 percent which should yield 45 600 tonnes of nickel with potential to increase the resource at depth.

In the measured category, there were 1 710 kilo tonnes at a grade 1,36 percent which should yield 23 250 tonnes of nickel. Indicated resource amounted to 710 kilo tonnes which should produce 9 810 tonnes at a grade of 1,38 percent while the inferred resource amounted to 3 530 kilo tonnes and should see nickel output of 12 540 tonnes at a yield of 1,13 percent.

Inferred mineral resource is part of a resource for which tonnage, grade and mineral content can be estimated with a low level of confidence.

It is based on information gathered through appropriate techniques from location such as outcrops, trenches, pits, workings and drill holes which may be of limited or uncertain quality and reliability.

Indicated resource are simply economic mineral occurrences that have been sampled (from locations such as outcrops, trenches, pits and drill holes) to a point where an estimate has been made, at a reasonable level of confidence, of their contained metal, grade, tonnage, shape, densities, physical characteristics.

Measured resources are those that have undergone enough further sampling that a competent person has declared them to be an acceptable.

After the restart, BNC is targeting an annual production of 7 000 tonnes of nickel in concentrate.

It will take three years to grow to this level of production. Additional capital of US$9 million would be raised once the company resumes production. BNC has already entered into an offtake agreement with Glencore who will purchase all the nickel concentrate produced by Trojan.

Anglo America sold its 53 percent stake in BNC in 2003 to Mwana, and since then the company struggled in an unstable macroeconomic environment where mining companies found it hard to operate as a result of retention levels imposed on exports by the Reserve Bank of Zimbabwe.

Apart from Trojan, BNC also owns the Shangani Nickel Mine and Hunter's Road Nickel concessions.

BNC lost 88 percent of its value when it first traded on February 25 at US25c.