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Business Reporter

RIOZIM Limited anticipates gold production to increase by 50 percent this year largely driven by its Cam and Motor project, which is now in full production. The diversified mining group registered an 85 percent increase in gold output in 2015 at 1 200 kilogrammes, after it commissioned Cam and Motor.Cam and Motor is expected to do better in its first year in full operation. About 80 percent of own equipment has been procured from China.

RioZim has been using a nearby rented plant to process its ore, which yielded 458kg in 2015 as output increased to 1 200kg from 658kg the prior year.

The new processing plant will be commissioned in the last quarter while a contract for a floatation plant, required towards year end, has been signed.

Group chief executive officer Mr Noah Matimba told journalists after RioZim’s annual general meeting yesterday that production will be better this year.

Average gold production is anticipated to increase from 100kg per month to 142kg per month while total output is forecast at 1 699kg this year.

The CEO said gold output, from its only operational unit, is performing ahead of 2015 driven by the newly commissioned Cam and Motor Mine, in Kadoma.

Mr Matimba said production has also been buoyed by improved performance at Renco Mine in Masvingo, the group’s traditional flag bearer.

“In terms of performance outlook we continue to perform better, generally, compared to 2015.

‘‘ Currently, we are only doing gold, as the only production unit.

“The nickel and copper refinery is under care and maintenance because we have been unable to get material from our sole supplier,” Mr Matimba said.

“So we have been 100 percent reliant on our gold production, as we said, is performing better than prior period given that the first half of 2016 saw full production of our second mine, Cam and Motor,” the CEO added.

As was expected, Cam and Motor has significantly enhanced RioZim’s gold output and the mine’s full potential is set to be seen at the end of this year.

“If you compare to 2015, we anticipate that we will come out 50 percent or so better; a lot better than 2014 and this is driven by fact that our second mine Cam and Motor would have operated for a full year,” he said.

Cam and Motor went into production in the second quarter of last year, as such, the eagerly awaited project was in production for eight only months.

RioZim raised $10 million through rights issue last year to fund the project. RioZim’s traditional flag bearer, Renco, is also doing better than last after its plant and equipment were recapitalized to enhance its condition.

Mr Matimba said that RioZim’s 22 percent associate, Murowa Diamond, is being resuscitated to resume production after controlling shareholder, Rio Tinto Plc, had closed it on account of poor performance.

“As an associate company we are pleased with developments there and we anticipate that in the second half of 2016 Murowa will be producing a decent level of carats and as an investment we are looking forward to good return.”

Mr Matimba said in 2015, RioZim accounted for a loss of $2,2 million from Murowa.

RioZim expects better financial performance this year, after interest and administrative costs went down by 26 percent and 15 percent, respectively, in 2015. The group’s loss for the year to December 2015 fell 52 percent to $8,2 million as gold operations posted good profits, despite the fall in bullion prices.

The group restructured debt valued at $33,8 million with various banks and the Zimbabwe Stock Exchange listed mining group and an exchange that saw it issuing redeemable preference shares at 9 percent interest per year.