Rio Zim slips into the red
Listed miner RioZim Limited, swung to a loss of ZWL42bn in the 12 months to December 31,2021, from a profit position of ZWL$453m reported in the previous year, largely due to subdued gold production.
Overall gold production for RioZim, which operates Renco Mine, Dalny Mine, One-Step Mine, Cam & Motor Mine, plunged 7% in the period under review.
Production at One-Step Mine, fell 18% to 351 kilogrammes (kg) in 2021 from 427kg reported in the previous year.
The low gold output was attributed to lower grades which dropped from the prior year.
At Cam & Motor Mine, there was no gold production during the year as the mine continued with the construction of its BIOX Plant Project throughout the year.
Output at Renco Mine stood at 561kg in the reviewed period , which was 3% lower than 580kg produced in the prior year as increased power cuts throughout the year decreased plant throughput.
Dalny achieved a 6% growth in gold production achieving 209kg of gold from
198kg produced in the prior year.
The growth in gold production was due to increased plant throughput as plant improvements carried out during the year successfully stabilised the plant.
More so the company also took a significant hit in the diamond business as production for the group’s associate, Murowa Private Limited, declined 28% to 414 000 carats from 579 000 carats produced in the prior
comparative year.
RioZim board chairman, Saleem Beebeejaun, expects the group to return to profitability this year following the commissioning of the Bio X plant last month.
“Production is forecast to increase at Cam & Motor after commissioning of the BIOX plant which will turnaround the group to profitability and a positive working capital position. The group forecasts to discontinue the haulage of low grade ore from One-Step to the Cam & Motor plant and migrate mining operations to the high grade Cam & Motor pits, which will result in cost savings and contribute positively to the profitability and cash flows for the group,
” Beebeejaun said.
He added:
“…The future cash flow forecasts are dependent on the level of gold production from this BIOX plant. Therefore,
whilst production is budgeted to increase going forward, there is a material uncertainty that the budgeted production
levels will be achieved.”
Beebeejaun said Murowa is focused on the completion of its Project Crown Jewel which entails increasing the current processing plant capacity to move to a ‘low grade high volume’ strategy in order to sustain production as it is currently processing low grades.
Despite having subdued production, revenue for the group increased 84% to ZWL$5.8 bn from ZW$3.1bn achieved in the previous year due to the depreciation of the local currency against the United States dollar.
Contributing to the revenue was the base metals business which generated ZWL$381m albeit operating under care and maintenance throughout the period.
About 210 tonnes of matte, 78tonnes of PGMs and 21tonnes of copper were produced from the refinery.
The company also reported that engagements with potential financiers for the 178MW solar project were ongoing albeit at a slower pace due to the complexities brought about by the Covid-19 pandemic.
For the 2 800MW Sengwa Power Station the company has put up various financing options to attract potential investors into the project.