ASA to offload BNC stake to Zim company

By Natalie Chiwomadzi and Tendai Sahondo

ASA Resource Group (ASA) has agreed to sell its 74.73% shareholding in BNC to an undisclosed third party based in Zimbabwe, Business Connect can reveal.

In a cautionary statement published by, BNC board chairman Muchadeyi Masunda said the stake up taker is a Zimbabwean based mining firm involved in the production of ferrous metals, non-ferrous metals and precious metals.

“Shareholders are advised that the ultimate holding company of BNC, Asa Resource Group Plc (currently under Administration), 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 Zimbabwean based mining entity with interests in the mining and production of ferrous metals, non-ferrous metals and precious metals,” read the statement.

Masunda cautioned shareholders as the envisaged transaction may have a material effect on the price of the Company’s securities.

“Accordingly, shareholders are advised to exercise caution when dealing in the company’s securities until a full announcement is made,” read the statement.

BNC is currently reeling from poor global nickel prices which has halted most of its envisaged projects. The mining firm has since abandoned its nickel smelter projects which is currently 83% complete until prices improve.

Bindura recently reported a 23% gross profit decline to US$18.9 to US$14.5 million from US$18.9 million for the half year ended 30 June 2019. The decline in profit was attributable to subdued growth in turnover and an unprecedented increase the cost of sales.

Cost of sales increased by 14% year on year from US$34.7 million last year to US$39.5 million in the year under review, mainly due to an increase in local input costs.

BNC however realised a profit and total comprehensive income of US$13.5 million compared to US$5.8 million in the prior year for the year ended 30 June 2019. Annual turnover was up 1% to US$54 million in comparison to US$53.6 million in the prior year. This was attributed to an increase in global nickel prices that were pegged at an average of US$8 376 per tonne, compared to US$7 249 per tonne achieved in the comparative period last year. Nickel in concentrate sold amounted to 6 410 tonnes, compared to 6 470 tonnes sold in the comparative period last year.

Operating profit increased by 141% to US$21.3 million, compared to the prior year’s achievement of US8.9 million. This was mainly attributable to exchange gains recognised on the introduction of the Zimbabwean Dollar.


Related posts

Leave a Comment