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Bindura mulls rights issue to fund Trojan nickel mine restart

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Bindura Nickel Corp, which owns the Trojan nickel mine in Zimbabwe, is contemplating a rights issue to fund the restart of the mine – Africa’s only existing integrated nickel mine, smelter and refinery – according to local reports.

It is unclear how much money Bindura would seek to raise from an issue on the Zimbabwe Stock Exchange, where it is listed, but according to The Independent and The Herald, a consulting report estimated Bindura’s capital requirement for Trojan to be in the region of $26 million.

The company could not be reached for comment.

Bindura’s majority stakeholder, Mwana Africa, would support a rights issue to speed up the restart of Trojan, analysts said.

“Mwana is keen to get Bindura going,” said Chris Welch, research analyst at Ocean Equities. “It is a quality asset, and it’s heart breaking to see such a good asset idle at the worst possible time. I think Mwana would certainly support a rights issue by Bindura.”

Investors on the Zimbabwe Stock Exchange would certainly be interested in a nickel asset like Trojan, and Bindura is decidedly one of the largest companies listed inside the country, Welch added.

A spokesman for Mwana told Metal Bulletin that he was not aware that Mwana would be underwriting a rights issue by Bindura. He could not immediately get hold of company officials, who are in Zimbabwe at the moment.

In April, Mwana secured $35 million in a share sale, with some of the money earmarked to help fund the restart of Trojan, which is planned for July

Mwana has had a difficult time securing offshore funds to support its southern African projects. The company has now put its Hunter’s Road greenfield project on the backburner because it is struggling to attract investors. But Welch believes the company is turning a corner with investors.

“Zimbabwe is still interesting to a small number of investors, even if it’s for the more specialised,” said Welch. “If you want a Zimbabwe play in your portfolio, Mwana has to be there.”

The restart of Trojan could only be positive news for Mwana, he added.

The Trojan mine has a hoisting and treatment capacity of 1.1 million tpy, smelter capacity of 17,000 tpy, and 14,500 tpy of refinery capacity.

Bianca Markram
editorial@metalbulletin.com

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