RioZim Limited has attributed an improved profit performance of $9,4 million from $7,7 million to firmer metal prices on the international market but erratic power supply has reduced gold production.
The mining concern said a turnaround of the company’s fortunes in the short term is possible as it has managed to mitigate against external factors that have bedevilled operations since 2004.
According to the group’s financial results for the period ending December 31, gold production fell to 18 000 ounces from 22 762 ounces produced in 2009.
“Output declined in the second half due to severe load shedding that was only mitigated in mid December with the introduction of an uninterrupted and ring-fenced power supply.
“Nickel and copper production reduced slightly to 8 600 tonnes compared to 8 000 tonnes in 2009 due to force majeure declared by the mattle supplier, BCL, in the first half and plant breakdowns in the second half,” the group said.
Mining industry has been saying electricity supply remained the debilitating factor in the full recovery of the mining sector and analysts point that while standby generators could mitigate the effects, the downside was increased operating costs.
RioZim said it has allocated $13 million for review of resource model at Murowa Diamonds which is expected to be competed in the first half of the year.
However, Murowa Diamonds contributed “an operating loss of $0,9 million to the company’s results compared to a loss of $2,9 million in 2009”.
But the 178 126 carats produced in 2010 where higher that the 124 422 carats in 2009, the group said.
“However, only 141 000 carats were sold at higher average prices than the 162 000 carets sold in 2009,” the group said.
Going forward, RioZim said it has a variety of mineral recourses ready for exploration.
“The external factors that have bedevilled the current operations since 2004 have been sufficiently mitigated to give directors and management the confidence that a turnaround of the company’s fortunes is achievable in the short term.”
But “additional capital is required to provide the much-needed liquidity for current operations and new projects”.
RioZim said limited groundwork on the Darwendale chrome deposits confirmed the existence of inferred alluvial resources in excess of 6 million tonnes of ore.