Mining giant, RioZim, recorded a 27 percent decline in gold output to 1,21 tonnes in the financial year ended December 2020 due to low-grade ore processed throughout the year.
In the 2019 financial year, the company produced 1,66 tonnes of gold.
In a chairman’s statement accompanying financial results for the period, RioZim said:
“The Company’s gold production declined by 27 percent from 1.66 tonnes achieved in the prior year to 1.21 tonnes. Throughout the current year, the Group’s flagship operation Cam & Motor Mine carried out mining activities from the nearby One Step Mine hauling low grade ore to the Cam & Motor plant for processing. This resulted in a drastic fall in gold production compared to the prior year when the Mine processed higher grade ore from its Cam pits.”
The company also noted that the gold price maintained a growth trend throughout the year recording a 27 percent 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.
RioZim added: “Revenue generated during the period was ZWL$3.1 billion in comparison to ZWL$577.1 million in the prior year. The exponential increase in revenue was a direct result of the depreciation of the local currency against the US dollar.”
Part of the statement also read that after a detailed consideration of the Company’s cash flow position, the Directors deemed that it was prudent not to declare Dividends for the period.
RioZim subsidiary, Renco recorded a strong performance with aggregate gold output of 580kgs – 4 percent above the prior year’s gold output of 556kgs.
“The increased gold output was at the back of higher milling throughput which was achieved as the Mine implemented its ‘high volume low grade’ strategy which yielded positive results,” added the statement.
However, another subsidiary, Dalny Mine’s gold production declined by 46 percent in the current year to 198kgs from the comparative period production of 364kg.
The mine suffered major breakdowns in the milling section of its ageing plant which directly impacted milled output and it also currently relies on near the surface open pitable ores which have lower grades that culminate in low production volumes.
“The medium to long term plan for the mine is to complete the de-watering and resuscitation of its underground shafts in order to access the higher grade ore that is deposited underground,” read part of the statement.
Furthermore, the statement highlighted that Cam & Motor Mine Production for the year closed at 427kg which was a sharp 42 percent decline compared to 738kg in the prior year.
RioZim stated that the depletion of oxide ore resources at the mine necessitated the migration of mining operations to their nearby One Step Mine from where they are hauling ore to the Cam & Motor processing plant.
Part of the statement also read that: “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.”
The mining company also said that progress on the BIOX project was negatively affected by the Covid-19 pandemic which brought the project to a standstill as key suppliers were affected by lockdowns and travel restrictions in the first half of the year.
RioZim added that the project activities resumed in the second half of the year albeit at a slow pace after lockdown measures were eased and despite the relaxation of lockdown measures, the movement of goods and people remained constrained due to the various Covid-19 restrictions and protocols that remained in place both locally and in South Africa where most of the equipment suppliers are housed thereby limiting the smooth flow of project activities.
“External funding for the project remained elusive throughout the year as lenders took a conservative approach in light of the uncertainties brought about by the Covid-19 pandemic. This left the company primarily dependent on internally generated funding,” read part of the statement.
Moreover, despite the funding and Covid-19 challenges, the company managed to steamroll the project to bring civil works to near completion and managed to take delivery of the bulk of the equipment by year end.
RioZim said installations commenced post year end and are progressing well and as at the reporting date, the company was engaged in discussions with potential lenders to secure the remaining funding requirements to complete the project and the company was hopeful of reaching financial closure.
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