Listed resources group RioZim is grappling with low ore grades which saw a 27% drop in gold production to 1.21 tonnes in the year to December 31, 2021 from 1.66 tonnes in the prior year.
“The company will build on its exploration drive from the prior year in order to upgrade and increase confidence levels on all resources across all our mines in light of the declining grades at Renco, One Step and Dalny mines,” RioZim chairman Saleem Beebeejaun said.
Gold production at Dalny Mine declined 46% to 198 kgs from 364kgs reported in prior year attributed breakdowns in the milling section of its ageing plant which directly impacted milling output.
Dalny currently relies on near the surface open pitable ores which have lower grades that culminate in low production volumes, Beebeejaun said.
“The medium to long term plan for the mine is to complete the dewatering and resuscitation of its underground shafts in order to access the higher-grade ore that is deposited underground,” he said.
Production at Cam & Motor Mine stood at 427kgs compared to 738kgs reported in 2019, reflecting a 42% decline.
Beebeejaun said the depletion of oxide ore resources at Cam & Motor Mine necessitated the migration of mining operations to the nearby mine called One Step Mine. Ore is hauled to the Cam & Motor processing plant.
However, the ore is of lower grade, Beebeejaun said.
“The ore resources at One Step Mine have significantly lower grades than those at the Cam & Motor pits and this negatively affected production output. The Mine is however, focused on completion of its BIOX plant project which will enable the resumption of mining and processing of high grade refractory sulphide ores from the Cam pits,” he said.
Production at Renco Mine bucked the trend and increased 4% to 580kgs from 556kgs reported in 2019 on the back of higher milling throughput which was achieved as the mine implemented its ‘high volume low grade’ strategy which yielded positive results.
RioZim’s associate, Murowa Diamond Mine, produced 579 000 carats of diamonds during the reviewed period from 685 000 carats in 2019.
The lower production was attributed to the processing of low-grade K2 resources after the high grade k1 resources had been depleted in 2019.
The associate continued to contribute positively to the group’s profitability with a share of profit of ZWL$494.8m from ZWL$ 22.9m in the prior year.
The gold price during the period under review maintained a growth trend throughout the year recording a 27% growth from the prior year’s average price of US$1 395 per ounce, to an average price of US$1 765 per ounce in the current year which counteracted the impact of lower production volumes.
However, revenue for the group went up to ZWL$3.1bn during the reviewed period from ZWL$577.1m reported in prior year. The exponential increase was attributed to a direct result of the depreciation of the local currency against the US dollar.
The resources group also swung to profit of ZWL$908m from a loss of ZWL$138m in 2019.
The Empress Nickel Refinery remained under care and maintenance throughout the period under review and the refinery however, continued with cash generating projects to partially fund the care and maintenance costs whilst maintaining the integrity of the plant.
The company’s chrome claims in Darwendale are still under a legal dispute and the companies await finalisation of the court case.
In the energy business, the company obtained independent power producer licenses for the solar power projects for each operating location and the company is progressing with selecting an EPC contractor whilst awaiting finalisation of Power Purchase Agreements with ZETDC, Beebeejaun said.
Business Times