BUSINESS REPORTER
RioZim Limited posted a ZW$77.4m loss in the six months to June 30 from a profit position in the same period last year on low gold production and rising production costs despite favourable gold price, the resource firm has said.
In the same period last year, the gold and diamond producer posted a profit of ZWL$38.2m.
In a statement accompanying the company’s financial results for the half year period, board chairman Saleem Beebeejaun said gold production dropped to 586kg during the period under review from 962kg achieved in the comparative period last year.
“The low volumes were attributed to, among other challenges, acute power cuts which resulted in depressed milling throughput, persistent Mill breakdowns and lower grade ore from One Step Mine,” Beebeejaun said, adding the low output subdued revenue to ZWL$616.4m.
He said favourable prices of US$1,713/oz up from US$1,346/ oz partly offset the low volumes.
Gold output was up 11% at Renco to 288kg attributable to improved plant viability after resolving plant breakdowns experienced in the same period last year.
Output at Cam and Motor Mine dipped to 199kg from 489kg impacted by plant and machinery breakdowns. Output at Dalny Mine was 99kg down from 215kg attained in the same period last year on equipment challenges in mining and plant processing.
Beebeejaun said the Empress Nickel Refinery remained under care and maintenance during the period.
He said Empress Nickel Refinery had in the first quarter focused on furnace relining and accumulating feed material for matte production.
Murowa produced 250kcts down from 390kcts due to a decrease in the ore grade as the mine extracted ore from a lower grade pit.
Beebeejaun said the company was in the processing of selecting an engineering procurement construction company and discussions for funding are underway for the construction of solar projects at Cam & Motor, Renco, Dalny Mine and Murowa Diamonds Mine.
He said the funding will be the primary challenge facing the project.
The resources group said a framework agreement for the second phase of the Sengwa power station was signed with an investment partner.
The second phase entails expanding capacity to 2,800MW from 700MW.
“The company, in conjunction with its investment partner, is in discussions with a potential financier for a targeted highly structured financing arrangement for Sengwa Phase 1.
While these discussions have been promising, the impact of Covid-19 has delayed the conclusion of this engagement,” Beebeejaun said.
He said the Biological Oxidation (BIOX) was affected by lockdowns in Zimbabwe and South Africa which delayed the manufacture of key components as factories were closed.
Beebeejaun said funding of the project “remains a major stumbling block to project progression and commissioning”.
The BIOX plant will help in the processing of pure oxide ores to make good grades and high recoveries.
The firm said it still owed substantial amounts by the central bank for gold delivered despite intermittent payments which had enabled the group to produce and deliver billion.
