UK firm strikes deal to take over Zim nickel producer BNC

Trojan nickel mine: One of Asa Resources' Zim assets

A UK-based mining firm is to buy a controlling stake in Bindura Nickel Corporation (BNC), the country’s largest nickel producer said in a statement on Wednesday.

In a cautionary statement on Wednesday, BNC said a deal had been struck by its parent company Asa Resources for the sale of its majority shareholding in the company.

“Bindura Nickel Corporation is advising that the ultimate holding company of BNC, Asa Resource Group Plc, has entered into a Sale and Purchase Agreement (SPA) with a third party in relation to the 74.73% shareholding in BNC. The third party is a UK based nickel company with complimentary interests in Southern Africa,” BNC said.

The statement does not name the buyer, but Asa has been in talks with London and Johannesburg-listed Pan African Resources, which announced earlier in the year that it was in “exclusive negotiations with the joint administrators of Asa Resource Group”. These talks, Pan African said at the time, were around “acquiring certain of the assets and liabilities of the (ASA) group”, Pan African said, without giving details, warning there was no certainty any purchases would be concluded.

Asa Resources has been in turmoil since last year when it sacked its CEO and FD after they allegedly defrauded Freda Rebecca Mine, in which Asa holds 85%, of over $4 million. Asa has also faced a hostile takeover from Rich Pro, a Chinese firm allegedly tied to the sacked executives. In June, Asa cancelled its London listing after delays in fixing a deep cash flow crisis.

Last December, Asa said its administrators were in “constructive discussions” with potential buyers for the nickel business.

Asa, once known as Mwana Africa, holds interests in gold and nickel in Zimbabwe. Its two key assets are Freda Rebecca gold mine, the Trojan nickel mine and the Bindura nickel operation, which has a mill, a concentrator, a smelter and a refinery.

Last year, Asa had planned to incorporate the Trojan mine into the Bindura complex, but missed its deadlines due to weak nickel prices and rising costs.

Trojan generated 6,621 tonnes of nickel in 2017, down from 7,306 tonnes in the prior year.

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