RioZim says the delays on the payment of the company’s gold receipts by the Reserve Bank of Zimbabwe, carried on throughout the third-quarter which severely strained the working capital and cash flows of the group and greatly ‘hampered’ production.
“The Company continues to engage the RBZ for a resolution of its delayed receipts,” the miner said in a trading update.
Inflationary operating environment, the miner said, persisted into Q3 2020 and still continues to drive up the cost of production and erode operating margins.
“Even though the foreign currency auction system has played a significant role in stabilizing the interbank exchange rate, prices of materials continued to trade at a premium to this rate.”
Power supply was fairly stable during the quarter. RioZim continued to process lower grade ores from its One Step Mine to sustain operations at the group’s Cam and Motor Mine.
“Due to the low production at Cam and Motor, the Group’s gold production for the quarter trailed by 9% from the comparative period last year,” RioZim stated.
The gold price maintained its upward trajectory averaging US$1 879/oz for the quarter, which was 29% above the average price of US$1 457/oz for the same period last year.
“This helped to partly absorb the negative impact of the low production and increased costs during this period.”
Gold production at Cam and Motor went down by 8% from the same period last year when the mine produced from high grade ores at its Cam pits.
Dalny Mine suffered multiple breakdowns from its ageing plant, which negatively affected production throughput. Resultantly, output fell by 37% compared to the same period in 2019.
Renco mine saw its gold output exceeded its 2019 comparative period production by 5% owing to improved milling throughput.
“The mine benefited from its ‘high volume low grade’ strategy which was implemented throughout the quarter which resulted in increased gold production,” the group said.
The Empress Nickel Refinery remained under care and maintenance throughout the quarter.
Diamond production at Murowa declined 2% compared to Q3 2019. This was attributed to processing ore from K1 pits which are of low grade whilst in the same period last year, the mine was processing from high grade K2 pits.
The firm is also pursuing various funding options for its BIOX project despite a difficult operating environment which has been compounded by the uncertainties brought about by the Covid-19 pandemic as lenders and financiers are taking a conservative approach on lending.
Civil works and steel fabrications for the BIOX plant project progressed timidly during the quarter.
“Delivery of structural and steel components from the project’s contractors in South Africa faced significant delays due to lack of foreign currency funding.”