RioZim BIOX plant to drive gold output The recently commissioned BIOX plant is expected to turnaround the group’s profitability and place it in a positive working capital position (File Picture)

Business Reporter

RioZim Limited, a Zimbabwe Stock Exchange (ZSE) listed miner, is confident of significant growth in gold output at Cam & Motor Mine following the commissioning of its Biological Oxidation (BIOX), which it expects to drive earnings going forward.

This year, the group’s financial performance was negatively impacted by low production at Cam & Motor Mine, which recorded lower than planned grades at the One-Step pit, which the Cam& Motor plant relied on for ore throughout the year.

Growth in gold output at RioZim, one of Zimbabwe’s largest bullion miners, is critical to the realisation of the country’s US$12 billion mining industry target by 2023. The yellow metal is expected to chip in with a weight US$4 billion.

The US$12 billion mining industry is a critical milestone towards the Government’s Vision 2030, by which the Southern African country is expected to be a prosperous, empowered, upper-middle-income society.

The ZSE listed resources group, which is also into the extraction of diamonds through its associate, RZM Murowa, has not been able to generate sufficient cash flows to settle short-term borrowings due to external parties.

RioZim said its current liabilities exceeded current assets by $2,75 billion in 2021 compared to $435,4 million in the previous year and as a result, the group reported a net loss for the period of $2 billion from a net profit of $452,7 million in the previous year.

Additionally, the challenging economic environment added to the strain and weighed on the group’s operations as costs continued to increase, exerting pressure on the group’s cash flows, and resultantly settlement of suppliers.

The group said there was no gold production at Cam & Motor Mine during the year which was a carry-forward from prior year as the Mine continued with the construction of its BIOX Plant Project throughout the year.

“The completion of the BIOX Plant which was scheduled for the second half of the year (2021) was delayed due to inadequate foreign currency and Covid-19 pandemic-induced challenges.

“Commissioning of the BIOX Plant Project would have enabled the resumption of mining operations at the Cam & Motor high-grade ore pits, “ said RioZim in their 2021 annual report.

However, not all hope is lost as the group pins its hopes on the implementation of the BIOX plant project.

“Production is forecast to increase at Cam & Motor after the commissioning of the BIOX plant, which will turnaround the group to profitability and a positive working capital position.

“The future of Cam & Motor Mine is hinged on the successful implementation and operation of the BIOX plant project which will enable the Mine to process its high-grade refractory sulphide resources. 

“This plant went into trial production in February 2022 and was successfully commissioned on the 14th of April 2022.

“The budgeted gold production is still lower than the actual gold production for the first quarter. 

“The future cash flow forecasts are dependent on the level of gold production from this BIOX plant,” said RioZim.

However, RioZim is also concerned that whilst production is budgeted to increase going forward, there is a material uncertainty that the budgeted production levels will be achieved.

But the group secured funding to complete the BIOX project at Cam & Motor Mine during the period.

All the major components and equipment were received on-site at year-end and installations were at completion stage with testing of the various components in preparation for commissioning having commenced. Commissioning of the BIOX Plant was completed on April 14 2022.

The group also forecasts to discontinue the haulage of low grade ore from One-Step mine to the Cam & Motor plant and migrate mining operations to the high-grade Cam & Motor pits, which will result in cost savings and contribute positively to the profitability and cash flows for the group.

RioZim is also looking at extensive exploration across the group aimed at upgrading its resources into reserves and minable resources, which will give more control on the grades and positively contribute to increased production.

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