HomeBusiness DigestRioZim sees another loss for year 2012

RioZim sees another loss for year 2012

The group will however return to profitability in 2013, forecasting a profit of US$20,89 million.

Harpal said revenue was forecast at US$62,21 million and should have doubled to US$131,29 million in 2016.

Earnings before interest taxes, depreciation and armotisation (EBITDA) are forecast at US$2,21 million. Randhawa said the group would have cash but would still have losses.

“ENR will bear losses but have cash, while Renco will make a US$9 million profit. We will lose more than US$8 million, but next year the EBITDA and cash will have a correlation pointing to an improvement,” Randhawa said.

He said RioZim was renegotiating the tolling contract for nickel matte  it has with Botswana’s BCL, saying it was “designed for the group not to make money.”

He stressed that the major debt the group had stemmed from the ENR contract.

Before raising capital recently, RioZim owed banks and other creditors more than US$60 million but expects this to be  US$35 million by year end and zero next year.

The group was negotiating a restructuring of the major portion of the bank debt. Randhawa said they were putting together a syndicated loan facility to refinance all bilateral agreements under a common loan agreement.

“We will also re-negotiate terms and conditions with key creditors,” Randhawa said. 

Randhawa said the main objective for the company was to bring down the high cost of production. Currently, Renco was the only cash cow of the business, he said.

He said over a period of 120 days, the intention was to improve the efficiencies at Renco by opening up seven new faces, which should increase mine output closer to the rated plant capacity of 950 tonnes per day from the current levels of 750 tonnes per day.

The mine is currently producing approximately 55kg/month but with the coming in of additional capital this will increase to monthly production of 100kg for 2012, 105kg for 2013, 140kg for 2014 and 160kg for 2015.

He said the group is currently negotiating for another gold mine with a 5 million ounce resource, which will be put into a sub unit, RioGold.
In addition to this, Randhawa said his group had a tailings dump with 5 tonnes of gold.

The sub-unit would also be made up of Renco and Cam & Motor mines. Randhawa said the plan was for the group to put different lines of business into indigenous sub-units. The units will be 51% indigenised with the remaining 49% used to acquire capital.

He said the new dispensation would stabilise and improve operations at Renco and ENR by providing the necessary working capital and capital expenditure.

GEM Raintree  acquired a 24% stake in RioZim after shareholders passed a resolution in March in favour of the business consortium to underwrite a US$5 million rights issue.

The company was seeking approval from shareholders to raise US$10 million by way of a private placement, US$5 million through a rights issue and US$45 million via convertible debentures to Mauritius-based GEM Raintree, but the Securities Commission of Zimbabwe questioned the amount of disclosure on the deal, particularly the details relating to the debenture.

RioZim last week indefinitely called off its AGM. — Staff Writer.

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