The company on Monday postponed its AGM scheduled for May 22 to an unspecified date, saying it needed to finalise its annual report and do possible adjustments and or reclassification resulting from the changes that the company went through in its bid to recapitalise its operations.
However, it has since emerged that the postponement had nothing to do with the annual report’s need to reflect the recapitalisation exercise but more to do with the figures over the external liability, which the auditors had refused to sign for.
At the EGM held in March, the group said it was not in a position to publish audited results because the auditors had expressed reservations with regards to the company’s going concern status.
Well-placed sources also said as the losses at the mining company continued to mount, workers were receiving salaries irregularly. Market commentators have questioned the ability of the recapitalisation partners to fund the revival of the company, given that only a small percentage of funding has been released to pay off the company’s debts, which were in excess of US$50 million as at the end of December 2011.
One of the main shareholders from GEM-Raintree, Nigel Earle, is said to be looking at raising US$200 million through a vehicle called Pan African Gold in the United Kingdom.
The Indigenisation ministry has also raised concern over the GEM — Raintree transaction, saying that it did not meet the requirements on indigenisation as laid out in the law.
New RioZim managing director Ashton Ndlovu was not available for comment as he was said to be away on an overseas business trip.
The RioZim share price has in the past week showed signs of weakness, with the counter bid and offered at 43c and 48c respectively, below its last trading price of 49c. At an analysts’ briefing held in March, the chairman of GEM said the capital-raising for the group opened an opportunity for the group to get back on track.
Chairman for GEM, Harpal Randhawa, was optimistic that the company could be turned around in a short space of time. The turnaround would be spearheaded by Renco (gold) Mine and Empress Nickel Refinery.
The group expects to earn US$75 million cash from ENR by next year, which will come mainly from the sale of metal stocks (US$55 million), shown in the balance sheet as receivables. Randhawa said the group expected US$10 million to come from an expected payment from Central Metal, which owes RioZim for unpaid tolling fees, while the difference will be generated from operations.
The group is projecting revenue this year of US$75,7 million, with the bottomline expected to come in at around US$2 million. The miner says that the profit is expected to grow to US$17.7 million in 2013. However, these projected figures were made based on a static gold price of US$1 650 per ounce.
— Staff writer.