RESOURCES concern RioZim Limited is redirecting its focus to find alternative power sources in a bid to stabilise production and bring the group out of its loss-making position.
The strategy comes as the group saw an 870% increase in cost of sales to ZWL$190,68 billion in the year ended December 31, 2023, from a 2022 comparative of ZWL$19,66 billion.
The growth in cost of sales drove the miner to widen its loss-making position to ZWL$95,8 billion in the year ended December 31, 2023, from a 2022 comparative loss of ZWL$20,04 billion.
In a statement accompanying the financial results for the year ended December 31, 2023, RioZim board chairperson Saleem Rashid Beebeejaun said the firm is prioritising stabilising the power supply at its Renco Mine.
“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,” Beebeejaun said.
“The future of the group looks positive as these initiatives are set to stabilise production and bring the group back to profitability.”
He said the group’s energy projects, mainly its 178 MW solar pipeline, were now at the funding stage after obtaining all the necessary regulatory approvals.
“The company is currently engaging various potential funding partners to reach financial closure. Our stakeholders will be kept informed of notable developments,” Beebeejaun said.
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The lack of capital to fund itself comes as the company’s liquidity dropped by just over ZWL$0,07 to nearly ZWL$0,22 to every Zimdollar of debt during the period under review, from the 2022 comparative. This was as a result of the firm’s trade and other payables rising by nearly 1 041% to ZWL$482,73 billion in the period under review, from the prior year.
Trade payables constitute money a company owes its vendors for inventory-related goods.
However, Beebeejaun said the firm experienced an upward review of nostro retentions by 15% which partially alleviated the foreign currency shortages the firm was experiencing during the period under review.
“The year began on a positive note, with an upward review of the nostro retention from 60% to 75%, which was a welcome boost to the group as this partially alleviated the foreign currency shortages,” he said.
“The increased nostro retention was complemented by favourable gold prices that experienced an upward trend from the beginning of the year thus contributing to the revenue growth for the year.”
The group’s revenue increased to ZWL$216,1 billion in the period under review owing to firmer gold prices, compared to nearly ZWL$20,6 billion recorded in 2022.
“The gold price maintained its growth trajectory from the beginning of the year and averaged US$1 913/per ounce (oz) for the year which was an 8% increase from the prior year’s average price of US$1 766/oz,” Beebeejaun said.
The group experienced persistent plant breakdowns at its Cam & Motor Mine resulting in the firm recording a volume increase of 1% from the prior year.
“Production for the year was 940kg, which was a 1% increase from the prior year’s production of 928kg,” Beebeejaun 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.”
Renco Mine reinforced its “low grade-high volume” strategy during the year, maximising its milled throughput and resultantly, production rose by 10% to 441kg from 402kg recorded in the comparative year.
Dalny Mine remained under full care and maintenance during the year, RioZim said.
Production for the year at the company’s associate, RZM Murowa (Private) Limited, declined by 3% to 414 000 carats compared to 426 000 carats recorded in 2022.
