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Zimbabwe: Firm gold price rescues RioZim.

Listed miner, RioZim Limited, says gold production volumes plunged 39 percent in the interim to June 2020 largely weighed down by power outages, frequent mill breakdowns, low grade ore and delayed payments for gold deliveries.

However, firm international gold prices partly offset damage caused by volumes decline.

The diversified miner, which also has interests in diamond, coal and nickel processing, said payment delays for gold deliveries to Fidelity Printers and Refiners, a unit of the Reserve Bank of Zimbabwe, had remained inconsistent albeit amid the payments being intermittent.

This, the miner noted, had resulted in stock outs of key raw materials required in the production of bullion.

The company said it was still owed a substantial amount and can only produce to the extent it has adequate inputs.

RioZim, which operates three gold mines namely Renco Mine in Masvingo, Cam and Motor in Kadoma and Dalny Mine in Chegutu, said output fell 39 percent to 986 kilograms in the half year period compared to the same period last year.

Power shortages negatively impacted mill throughput while persistent mill breakdowns and low grade ore from One-Step Mine also weighed down on performance, one of Zimbabwe’s biggest gold mines said this week.

The resultant low production, coupled with rising costs caused the group to incur losses of $77,4 million compared to $38,2 million in 2019, which came on the back of subdued revenue of $614 million.

“The low volumes were, however, partly offset by the favourable gold price, which averaged US$1,713 per ounce, an increase of 27 percent from US$1,346/oz in the same prior period,” RioZim said.

Production at Renco Mine, at 288 kg, outpaced the prior comparative period by 11 percent, largely driven by better plant availability.

Cam and Motor produced 199 kg, down from 489 kg last year. Plant and equipment breakdowns affected throughput and gold output.

“To address the equipment challenges, the company is in the process of various capitation activities, which include repairs, rehabilitation and replacement of components to enable the plant to achieve stable capacity,” RioZim said.

The gold mining entity said the future of the Cam and Motor Mine remains hinged on the completion of the Biox plant in order to access higher grade ore at Cam pits than is currency being processed from Step One Mine.

Dalny Mine produced 99 kg during the period under review, which is lower than the 215 kg attained in the prior comparative period, largely affected by equipment challenges in mining and processing operations, which is being rectified.

RioZim said the Murowa Diamond Mine in Shurugwi managed to produce 250 carats compared to 390 carats in the previous half year period, which spawned a share of loss from the associate of US$5,3 million.

“The decline in production was a result of a decrease in the ore grade, as the mine extracted ore from a lower grade pit. Given the decrease in ore grade, the company is working on expanding processing capacity to shift the operations to a low grade high volume model.

“This project has stalled due to insufficient foreign currency and unavailability of funding to fast track and complete the project,” RioZim said.

In the outlook, RioZim said there has been incremental relaxation of the lockdown restrictions, which has allowed improved movement of people and goods and the group anticipates that this will fast track its key capital projects.

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