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Trading on VFEX for Bindura Shares Temporarily Halted

The Victoria Falls Stock Exchange (VFEX), is a wholly owned subsidiary of the Zimbabwe Stock Exchange (ZSE) established to kick start the Offshore Financial Services Centre (OFSC) earmarked for the special economic zone in Victoria Falls.

Trading in Bindura Nickel Corporation (BNC) shares has been temporarily suspended on the Victoria Falls Stock Exchange (VFEX) following the placement of its key asset, Trojan Mine, under reconstruction.

This development occurs amidst operational difficulties faced by the resources group amid a decline in global nickel prices, which have fallen by approximately 25 percent year on year.

While the reconstruction order specifically targets Trojan Mine, Zimbabwe’s primary nickel producer, its repercussions extend to the entire group, leading to its suspension—a first for the US dollar-denominated exchange. Mr. Robert Mubaiwa, head of VFEX markets, conveyed this information to stakeholders, emphasizing the voluntary suspension of BNC shares effective from May 6, 2024, in light of the Reconstruction Order issued under the Reconstruction of State-Indebted Insolvent Companies Act.

The suspension, in accordance with the administration period outlined in the Government Gazette last week, is a result of the Reconstruction Act, which renders certain transactions void during the reconstruction process. Although the order primarily targets Trojan Nickel Mine Limited, BNC, as the parent company, is equally affected under Section 4 (3) (a) of the Reconstruction Act.

As a consequence, the administrator has sought voluntary suspension in trading of BNC shares on the VFEX, approved by the Securities and Exchange Commission of Zimbabwe (SecZim), following the group’s migration from the Zimbabwe Stock Exchange (ZSE) in 2021.

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Prior to this development, the group had cited ongoing challenges such as low nickel prices, high input costs—particularly electricity expenses—substantial mining depth, and low resource grade, all negatively impacting operations.

Despite the completion of the Sub-Vertical Rock (SVR) Project, which temporarily halted mining activities at BNC’s Trojan Nickel Mine (TNM) from September 22, 2023, the company continues to face various obstacles expected to delay the resumption of mining activities at Trojan.

Also read: ZiG Records Its Largest Decline Since Launch

In its trading update for the nine months ending December 31, 2023, the resources group reported a decrease in tonnes of ore mined to 177,179, down 37 percent from 281,560 tonnes achieved in the same period the previous year.

Similarly, tonnes of ore milled decreased by 42 percent to 163,674 from 281,135 tonnes recorded in the corresponding period last year. Nickel in concentrates produced also decreased by 40 percent to 1,314 tonnes compared to 2,192 tonnes recorded for the same period last year, attributed to lower milled tonnage and ore grade.

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