RESOURCES group RioZim Limited’s liquidity shrank by nearly 8% in its half-year performance for the period ended June 30, 2024 amid a widening loss on a drop in gold production.
During the period under review, RioZim had ZiG0,20 for every ZiG of short-term debt, a drop from ZiG0,218 recorded in the comparable period last year.
Its loss widened to ZiG165,71 million in the period under review from ZiG110,48 million in the comparable period last year.
The loss could complicate matters for the resources group as it uses its own resources and borrowings where necessary to fund capital expenditure. Any loss hinders its ability to raise capital and liquidity.
“The group recorded a 27% decline in gold production for the six-month period to 306kg (kilogrammes) from 417kg achieved in the same period in the prior year. The low production was attributed mainly due to Cam & Motor Mine operating sub optimally on low plant throughput and depressed recoveries,” RioZim chairperson Saleem Beebeejaun said, in the group’s half year financial statement for the period ended June 30, 2024.
“These were brought about by mining and ore supply challenges to the plant due to lagging pit development. Renco mine also recorded lower gold production due to inconsistent plant performance. The gold price averaged US$2 165/oz (ounce) which was 13% in the positive from US$1 910/oz recorded in the comparative period.”
He said revenue for the period was ZiG282,5 million, a 20% decline from ZiG352,4 million recorded in the same period in 2023.
Amid the revenue drop, expenses and costs remained basically the same at ZiG190,54 million from the 2023 comparative.
At Renco Mine, the RioZim’s unit was focused on refurbishment of plant structures and various equipment within the plant as equipment breakdowns were persistent during the six-month period.
Beebeejaun said the plant did not operate efficiently, which negatively impacted throughput.
“Due to the lower plant throughput, Renco’s gold production decreased by 9% to 176kg from the 194kg recorded in the comparative period,” he said.
“Gold production for the six-month period dropped by 42% from 223kg recorded in the same period in 2023, to 130kg in the current period. The mine’s lower production was largely due to ore supply challenges to the plant.”
Beebeejaun said Dalny Mine remained under care and maintenance, leading to no gold production for the period as a result.
Under its base metals business, RioZim’s refinery remained under care and maintenance during the period.
Meanwhile, for chrome, the miner commenced mining activities with its private partnerships at its Darwendale claims after an amicable resolution was reached on the dispute that surrounded those claims.
Under diamonds, production for the period at the company’s associate RZM Murowa (Private) Limited increased by 2% to 216 000 carats compared to 212 000 carats recorded in the comparative period in 2023.
RioZim revealed that the increase in production was a result of improved grades.
Total assets were down to ZiG1,66 billion for the period under review, from a 2023 comparative of ZiG1,68 billion.
“The mining contractor commenced mobilisation at Cam & Motor Mine subsequent to period end which will see acceleration of pit development and guarantee adequate ore feed to the plant. The improvement in pit accessibility will provide better quality ore to the plant which will have a positive impact on gold recoveries,” Beebeejaun said.
“Gold production is, therefore, forecast to improve as these initiatives start to make an impact in the second half of the year. The exploration programme at the Murowa pits which was in motion as at period end continued into the second half of the year in an effort to bring back mining activities and extend the life of mine.”
He said processing of the tailings would continue as the mine had substantial material to sustain operations in the short to medium term, while resumption of in-pit mining activities remained a medium to long term project.
“Despite exchange rates being stable since the introduction of the ZiG, the future remains uncertain as the availability of foreign currency remains short of requirements,” Beebeejaun said.
“Subsequent to period end, the re-emergence of price inflation due to exchange rate was becoming noticeable.”
