Listed diversified miner, RioZim’s revenue for the year to December 31, 2018 declined 15% to US$75.4 million from US$88.9 million previously as foreign currency shortages stifled operations during the period under review.
“The group’s underperformance was due to low production volumes in the second half of the year and the inability to complete planned capital projects due to foreign currency funding constraints, which would have sustained and increased production,” said management in a statement accompanying the results.
Gold prices averaged US$1247/oz during the period under review, faring slightly better than the levels of US$1242/oz.
RioZim posted an operating profit of US$2.4 million, 71% below the prior year’s operating profit of US$ 8.1 million.
The group closed the year with a net loss of US$2.3 million against a net profit US$8.1 million achieved in the prior year, which management partially attributed to “fixed costs incurred whilst operations were suspended for the gold business.”
EBITDA amounted to US$4.5 million, which again reflected a 66% decline from the prior year’s EBITDA of USD 13.4 million.
In terms of the performance of the group’s various subsidiaries, gold producer Cam & Motor produced 458kg in the first half of the year.
But due to falling recoveries and the temporary stoppage of operations, the gold mine closed the year with a total production figure of 758kg which demonstrated a 22% reduction from the prior year.
The decline in recoveries (65 % in 2018 vs 77% in 2017) was attributable to depletion of amenable oxide ores and an increase in refractory ore, which cannot be effectively treated with the traditional carbon-in-leach process.
“Although the mine milling performance was an improvement from the prior year, this did not translate to improved production due to the falling recoveries and ultimately this resulted in an increase in the production cost per ounce,” said RioZim.
“The Group is in the process of developing a Biological Oxidation (BIOX) Plant in order to treat the refractory ore reserves. Unfortunately, the scarcity of foreign currency held back the project in the year under review. Once operational, the BIOX Plant is expected to enable the Company to double its production output.”
Renco Mine produced 591 kg, 61% of which was produced in the first half of the year.
The total period’s production was a 22% reduction from the prior year.
“The depressed output in the second half of the year was attributable to under-performance in the milling section. The deteriorating ability to access adequate foreign currency in the second half of the year hampered the company’s efforts to procure consumables for the mine which resulted in low plant availability and reduced milling time.”
The Dalny Mine produced 442kgs, an 8% increase from the prior year on the back of improved milling.
The group said the shortages of foreign currency resulted in the delay of scheduled underground mining at the mine which would have further increased production.
Resultantly, the mine could not access the rich underground ore resource, leading to lower grades of 2.57g/t against grades of 2.65g/t achieved in 2017.
Empress Nickel Refinery The Refinery remained under care and maintenance throughout the year.
And Murowa Diamonds posted a profit of US$10 million as diamond production rose to 740 244 carats against prior year’s production of 732 045 carats.