RioZim operations threatened by losses

Source: RioZim operations threatened by losses – The Standard

GOLD miner RioZim Limited’s operations are under threat as the firm has just 27 cents to every dollar of debt after it widened its losses by 59% to $8,71 billion in the half year ended June 30.

During the period under review, the firm saw an increase of 642,42% to $18,89 billion in administrative expenses from a 2022 comparative of $2,54 billion, which widened its loss-making position.

In the half year ending June 2022, RioZim recorded a loss of $5,46 billion.

In a statement accompanying the results, RioZim chairman Saleem Rashid Beebeejaun said rising costs of inputs weighed heavily on the firm.

“Revenue for the period was $49,96 billion in comparison to $4,76 billion recorded in the same period in the prior year,” Beebeejaun said.

“The increase in revenue was partly a result of increased gold output as well as exchange rates variation from the comparative prior period.

“The group incurred a net loss for the period of $8,7 billion.

“Despite the growth in output in the current period, the cost base of the group remained high due to the rising cost of inputs.”

The rising cost of inputs led to a cost of sales of  $41,66 billion during the period under review, this was significantly up from the 2022 comparative of $4,6 billion.

“The group’s gold production recorded a 6% growth to 417kg from 393kg attained in the comparative prior year period.

“The growth in gold production resulted from increased volumes at Cam & Motor Mine driven by the recently installed BIOX Plant,” Beebeejaun said.

“Metal prices were favourable during the period as the gold price rose by 4% from an average price of US$1 834/Oz in the same period in prior year to an average price of US$1 910/Oz in the current period.”

Gold production at RioZim’s Renco Mine was up by 11% to 194kgs during the period from a 2022 comparative of 174kgs.

The growth was attributed to a shift to a ‘high throughput low grade’ strategy.

Dalny Mine operated under care and maintenance throughout the period with the mine’s future dependent on resuscitation of underground operations after the open pit resources were exhausted in prior years.

Cam & Motor Mine, Beebeejaun said after a successful completion and commissioning of a BIOX plant at Cam & Motor Mine in the prior year, the miner focused on optimisation and increased production to plant capacity.

“As a result of the ramping up exercise, production leap frogged by 6% to 223kg from 211kg achieved in the comparative prior year period,” he added.

Under RioZim’s base metals and chrome business, the Empress nickel refinery remained under care and maintenance throughout the period.

Murowa diamond mine, the group’s associate, recorded an 84% increase in production from 115 000 carats achieved in half year 2022, to 212 000 carats in the current period.

“This marked growth in production was stimulated by the recently installed 500 TPH Plant which was commissioned in the second half of the previous year,” Beebeejaun said.

 “Power supply remains a significant threat to the business as this will curtail plant running time.

“The group installed back up power generators to mitigate the production losses occasioned by power cuts however, this comes with an increased cost of production.

“The dynamic and challenging macro-economic environment remains an impediment to business growth and continues to have a negative effect on the operating performance of the group.”

Total assets were recorded at $748,9 billion as of June, up 732,53% from the end of last year owing to a revaluation of the group’s assets in line with the depreciation of the local currency.