RioZim upbeat of enhanced production
Diversified resources group, RioZim Limited is confident of enhanced production at its gold producer — Cam & Motor Mine — following the commissioning and implementation of its Biological Oxidation (BIOX) plant which will drive earnings for the entire group in the coming financial year and going forward.
Production is forecast to increase at Cam & Motor after the commissioning of the BIOX plant which will turnaround the group to profitability and a positive working capital position, the group has indicated.
During the past financial year, the group’s financial performance was impacted by low production at Cam & Motor Mine which recorded lower grades than planned from its One-Step Mine where the mine relied upon ore supply to the Cam & Motor plant throughout the year. As a result, the group has not been able to generate sufficient cash flows to settle short-term borrowings due to external parties.
According to the group, as of the reporting date, its current liabilities exceeded current assets by $2,750 billion compared to $435,4 million in the previous year and as a result, the group reported a net loss for the period of $2 billion from a net profit of $452,7 million in the previous year.
Additionally, the challenging economic environment added to the strain and weighed on the group’s operations as costs continued to increase, exerting pressure on the group’s cash flows, and resultantly settlement of suppliers.
The group highlighted that there was no gold production from Cam & Motor mine during the year which was a carry forward from prior year as the Mine continued with the construction of its BIOX Plant Project throughout the year.
“The completion of the BIOX Plant which was scheduled for the second half of the year was delayed due to inadequate foreign currency and COVID-19 pandemic-induced challenges. Commissioning of the BIOX Plant Project would have enabled resumption of mining operations at the Cam & Motor high-grade ore pits, “ said RioZim in its 2021 annual report.
However, not all hope is lost following implementation of the BIOX plant project.
“Production is forecast to increase at Cam & Motor after commissioning of the BIOX plant which will turnaround the group to profitability and a positive working capital position.
“The future of Cam & Motor mine is hinged on the successful implementation and operation of the BIOX plant project which will enable the Mine to process its high-grade refractory sulphide resources. This plant went into trial production in February 2022 and was successfully commissioned on the 14th of April 2022.
“The budgeted gold production is still lower than the actual gold production for the first quarter. The future cash flow forecasts are dependent on the level of gold production from this BIOX plant,” said RioZim.
However, the miner is also concerned that whilst production is budgeted to increase going forward, there is a material uncertainty that the budgeted production levels will be achieved.
Meanwhile, the group forecasts to discontinue the haulage of low-grade ore from One-Step mine to the Cam & Motor plant and migrate mining operations to the high-grade Cam & Motor pits, which will result in cost savings and contribute positively to the profitability and cash flows for the group.
RioZim is also looking at extensive exploration across the group aimed at upgrading its resources into reserves and minable resources, which will give more control on the grades and positively contribute to increased production.-ebusinessweeklu
