DEBT-LADEN miner RioZim Limited plunged deeper into financial distress after posting a staggering after-tax loss of ZiG628,47 million during the year to December 31, 2024, a six-fold increase from the prior year, as collapsing production and mounting debts crippled operations.
The loss was from a prior year comparative of ZiG107,71 million.
Consequently, despite a 25% surge in global gold prices to US$2 389 per ounce (oz) during the period under review, the group failed to capitalise on the increase, with output nosediving 54% to just 428 kilogrammes compared to the previous year’s figures.
On Tuesday, RioZim announced it was in talks to secure working capital of US$20 million from a potential investor.
This comes as the firm faces debt obligations of at least US$191 million.
“The group achieved gold production of 428kgs, which was a 54% decline from the prior year’s gold production of 940kg. The fall in production was mainly attributed to low plant uptime at both Cam & Motor and Renco mines,” RioZim chairperson Saleem Rashid Beebeejaun said.
“Cam operated on one mill throughout the year after the second mill was decommissioned, which constrained plant availability due to reduced milling capacity and lack of redundancy.
“At the Renco Mine plant, reliability gradually deteriorated due to failing plant structures as the plant has aged.”
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He said the reduced plant availability at both mines resulted in low plant throughput and subdued gold output.
“The average gold price rose by 25% to US$2 389/oz in the current year from the prior year’s average price of US$1 913/oz, which partially cushioned against low production,” Beebeejaun said.
“The group’s revenue for the year declined to ZiG475,5 million against ZiG795,7 million recorded in the prior year. The low revenue was in line with subdued production for the year.”
RioZim controls Renco, Cam & Motor, Dalny and RZM Murowa (Pvt) Limited. It also owns Empress Nickel Refinery.
RioZim’s liquidity position also deteriorated.
Its total liabilities exceeded assets by more than ZiG838,43 million as of December, effectively rendering the company technically insolvent.
In April, the Zimbabwe Diamond & Allied Minerals Workers Union petitioned the High Court of Zimbabwe to place the firm under corporate rescue, citing deep insolvency and governance failures.
“The capital raising initiatives progressed subsequent to period end as the group seeks to recapitalise the company,” Beebeejaun said.
The miner is scheduled to refurbish a plant at Renco Mine with the objective of replacing old and worn out components of the plant structures, a major source of plant inefficiencies and production losses.
“The mine will further commence the development of a new tailings facility, which is a necessity to support the mine’s future expansion plans,” Beebeejaun said.
“At Cam & Motor mine, the installation of a second mill is a priority to restore the mine’s design capacity on throughput while simultaneously providing redundancy.
“Significant repair and maintenance work is also scheduled to refurbish the critical sections of the plant, which are currently a bottleneck to optimum plant performance.”
Despite these challenges, the RioZim chairperson remained upbeat, stating “with the conclusion of the capital injection into the company, the future of the group looks set to bounce back to profitability and positive cash flows.”
