RIOZIM is set to raise money from existing shareholders to resuscitate mining activities at Cam & Motor Mine which has been closed for the past 46 years.
In a cautionary notice yesterday, RioZim said its board and management anticipate the resuscitation of the gold mine “will significantly improve the prospects of the business and may have an impact on the share price”.
“To this end, the company will seek funding from shareholders. The finer details of the proposed rights issue will be provided in due course,” RioZim said.
The mine was once the largest producer of gold in Zimbabwe and produced in excess of 150 tonnes of gold in its entire life.
The mine was closed in 1968 with price at $35 per ounce while it was operating at depths of 1 800 metres that the company deemed was no longer viable.
At that stage, the mine cut-off grade was 8 grammes per tonne and it was considered likely that there could be significant resources adjacent to the old workings that would now be economic to mine.
RioZim commissioned an exploration programme to search
for the expected lower grade zones surrounding the mined ore bodies.
The new Cam & Motor facility was supposed to be opened last month.
Its projected production will be 4 000 ounces per month.
RioZim owns the Renco Mine in Masvingo, Empress Nickel Refinery and has a 22% shareholding in Murowa Diamonds.
In the half-year ended June 30 2014, RioZim saw its losses widening to $7,5 million from $2,85 million in the same period last year attributed to lower production at its two mines and reduced gold and copper prices.
In a statement accompanying the group’s financial results, board chairman Elisha Mushayakarara said the lower production at Empress Nickel Refinery and Renco and effects of lower gold and copper prices compared to the prior year resulted in the group’s turnover declining by 31% to $39,9 million.
In the same period last year, group turnover was $56,8 million.