RioZim suffers drop in gold production
DIVERSIFIED mining group, RioZim, has recorded a nine percent decline in gold production to 333 kilogrammes in the quarter ended September 30, 2020 from 366 kilogrammes during the corresponding period last year.
The mining group attributed the decrease in total gold output during the period under review to low production at its Cam and Motor Mine, which contracted by eight percent from prior comparative period.
This was because the mine continued with processing low grade ores from its One Step mining unit throughout the quarter.
In a trading update for the quarter under review, RioZim noted that power supply was fairly stable during the quarter.
“The group continued to process lower grade ores from its One Step Mine to sustain operations at the group’s Cam and Motor Mine.
“Due to the low production at Cam and Motor, the group’s gold production for the quarter trailed by nine percent from the comparative period last year,” it said.
However, the prevailing high gold prices on the international market reduced the negative impact of lower volumes of the business. The gold price maintained its upward trajectory averaging US$1 879 per ounce (oz) for the quarter, which was 29 percent above the average price of US$1 457/oz for the same period last year.
“This helped to partly absorb the negative impact of the low production and increased costs during this period,” said RioZim.
During the period, the group also reported a slow down in output at its Dalny Mine due to incessant breakdowns of aging equipment at the plant.
“Dalny Mine suffered multiple breakdowns from its ageing plant, which negatively affected production throughput.
“Consequently, production fell by 37 percent compared to the same period in 2019,” it said.
Only Renco Mine posted a positive gold output as the operation exceeded its 2019 comparative period production by five percent owing to improved milling throughput.
The mine benefitted from its ‘high volume low grade’ strategy, which was implemented throughout the quarter and resulted in increased gold production.
RioZim said the delays on the payment of its gold receipts by the Reserve Bank of Zimbabwe (RBZ), carried on throughout the quarter and this severely strained the working capital and cash flows of the group and greatly hampered production.
The company continues to engage the RBZ for a resolution of its delayed receipts. Turning to its diamond operation, Murowa Diamonds, RioZim said output declined by two percent compared to third quarter in 2019.
“The reduction in diamond production was attributable to processing ore from K1 pits, which are of low grade whilst in the same period last year, the mine was processing from high grade K2 pits,” it said.
RioZim is also continuing to pursue various funding options for its Biological Oxidation (BIOX) project although the prevailing operating environment has been compounded by the uncertainties brought about by the Covid-19 pandemic, as lenders and financiers are taking a conservative approach on lending.
In May this year, the group announced that it has resumed the construction of the US$17 million BIOX plant at Cam and Motor Mine in Kadoma.
It is anticipated that construction of the BIOX plant will see RioZim beneficiate its precious minerals through processing pure oxide ores to make good grades and high recoveries generating more foreign currency.-chronicle.co.zw
