RioZim gold production remains resilient

RIOZIM Limited’s gold production reached 940kg in 2023, marking a modest rise from 928kg in the previous year despite production costs and persistent plant breakdowns negatively affecting operations.

The company has said its energy projects, particularly the 178MW solar projects, have progressed to the funding stage after receiving all required regulatory approvals.

The diversified mining firm is in discussions with several potential funding partners for its energy projects, aiming to achieve financial closure. The solar plants will supply electricity to RioZim’s mines namely Renco, Cam and Motor and Dalny.

Outlining the financial results for the Group, for the year ended December 31, 2023, board chairman, Mr Saleem Beebeejaun said despite the challenging operating environment, the Group’s gold production remained resilient, recording a one percent growth from the previous year.

However, despite the notable growth in production and favourable gold prices, the financial performance was weighed down by the macro-economic environment, which remained turbulent and challenging.

Mr Beebeejaun noted that the period was characterised by the rising cost of production driven by an inconsistent power supply and spiralling exchange rates, which subsisted throughout the year.

“Production for the year was 940 kg, which was a slight one percent increase from prior year production of 928kg,” said Mr Beebeejaun.

He said the subdued production volumes were due to persistent plant breakdowns largely experienced at Cam & Motor Mine, which struggled with breakdowns in its milling section resulting in reduced throughput.

Dalny remained under full care and maintenance during the year.

The gold price maintained its growth trajectory from the beginning of the year and averaged US$1 913/oz for the year, which was an eight percent increase from the prior year’s average price of US$1 766/oz.

The improvement in gold production and gold prices increased the Group’s revenue during the year to ZW$216,1 billion compared to ZW$20,6 billion achieved in the prior year.

The increase in exchange rates in the current year also contributed to the enormous increase in revenue in ZW$ terms compared to the prior year.

Mr Beebeejaun said Renco Mine reinforced its “low grade-high volume” strategy in the current year, ultimately maximising its milled output.

This yielded positive results as production rose by 10 percent to 441kg from 402kg recorded in the comparative year.

He noted that the firm is focused on stabilising the power supply at Renco, which remains a production obstacle for the mine.

“To curb this problem, the mine continues to invest in additional generator capacity to limit the impact of power cuts on production.

“Renco Mine is also reviewing its power supply arrangements and will consider all opportunities and alternatives possible that will result in improvement in the power supply to the mine,” said Mr Beebeejaun.

Gold production fell by five percent in the current period to 499kg compared to 527kg achieved in the previous year.

During the period under review, Dalny remained under care and maintenance yielding no gold production for the year. The mine is working on regulatory approvals for its envisaged small-scale operations to generate cash flows, which will partially fund the care and maintenance costs and reduce the overall cash flow impact to the Group.

RioZim diamond business, RZM Murowa, saw a three percent decrease in production this year, down to 414 000 carats from 426 000 carats in 2022.

In terms of energy issues, Mr Beebeejaun indicated that the 178MW solar projects are now at the funding stage.

He added that the company is presently engaging various potential funding partners.

“Power supply remains a major threat to production at Renco Mine and resolution of this issue will go a long way in bringing production to plan.

“The company is focused on finding alternative sources of power supply including adding generator capacity, among other initiatives,” said Mr Beebeejaun.

RioZim has interests in various mineral assets including gold, chrome and diamond.chronicle