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ASA Resources nears BNC exit

ASA Resources nears BNC exit

ASA resources

Chinese investors ASA Resources will finally exit local nickel producer Bindura Nickel Corporation (BNC) after agreeing to dispose of its majority shareholding to a “Zimbabwe-based mining entity”. “Shareholders are hereby informed that the transaction involving the sale of 74,73 percent of BNC’s issued shares to the above-mentioned party has been successfully concluded,” said BNC in a renewed cautionary yesterday.

“The transaction may have a material effect on the price of the company’s securities.”

This is the latest, and perhaps final attempt, in a series of attempts by ASA Resources to sell off the nickel producer, which it acquired in 2015.

It is now likely that technicalities like exchange control approvals from the authorities are the remaining hurdles.

ASA Resources’ assets in Zimbabwe include Bindura Nickel Corporation, Freda Rebecca Gold Mine and an agribusiness venture.

It also has copper and diamond operations in Congo and South Africa, respectively, as well another nickel mine in Botswana and a base metal exploration in the Democratic Republic of Congo (DRC).

Throughout last year, an unnamed third party was said to be a United Kingdom-based nickel producer with complementary interests in Southern Africa.

BNC’s problems worsened after allegations of financial impropriety arose around the parent firm’s directors.

ASA then chairman and CEO Yat Hoi Ning was sacked from ASA in April 2017 following allegations of fraud, of figures ranging between $4 million and $15 million related to subsidiary gold producer Freda-Rebecca.

Ning was appointed executive chairman of ASA Resources mid-2015 after the rancorous removal of founder and then CEO of Mwana Africa, Kalaa Mpinga.

Also sacked at the time was BNC chairman Yim Kwan and Freda Rebecca financial controller Roy Shum.

The ASA Resource group had been struggling to pay creditors when debts fall due, indicative of problems lying deeper than the on-going shareholder spats.

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BNC has since halted its smelter construction project and is now completely focusing on the shaft deepening project as the miner aims to boost production in view of an anticipated increase in the global price of nickel.

The wait-and-see attitude on the smelter project is largely hinged on the price of the commodity.

Nickel prices have averaged US$12 000 per tonne since 2015 compared to the average London Metal Exchange (LME) price of US$16 000 per tonne forecast and the industry players are anticipating that the price could have significant uptick going forward driven by an upsurge in demand.

For the year to March 31, 2019 the nickel producer recorded a profit after tax of US$13,5 million, compared to the US$5,8 million prior year comparable.

Revenue for the period rose 1 percent to US$54 million from US$53,6 million in the comparable period last year_The Herald

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