Local mining giant, Rio Zim Limited last year recorded a net profit of US$7.5 million up from an operating loss of US$150 000 posted in the prior year.
By Jeoffrey Ncube
According to the company end of year financial statement, despite the challenging and uncertain operating environment, the group revenue increased by 15%.
Board chairperson, Lovemore Chihota said the group’s revenue grew despite Empress Nickel Refinery remaining under care and maintenance.
“The group`s revenue grew by 15% to US$65.2million up from US$56.5million in 2015, despite Empress Nickel Refinery (“ENR”) remaining under care and maintenance.
“The Group closed the year with a net profit after tax of US$2.5million (2015: US$8.8million loss) for the first time since the introduction of the multi-currency system,” he said.
Chihota said the Group benefited from relief provided by the debt restructuring carried out in 2016, which resulted in net finance costs reducing.
“The Group benefited from the relief provided by the debt restructuring carried out in 2016, which resulted in net finance costs reducing by 20% to US$5.4million (2015: US$6.7million).
“Given the capital intensive industry in which the Group operates, we further look forward to the introduction of facilities and policies that avail long term affordable funding, as access to such funding remains a challenge,” said Chihota.
He highlighted that in October 2016, the new Cam & Motor gold processing plant was cold commissioned with full production commencing in 2017.
“In October 2016, the new Cam & Motor gold processing plant was cold commissioned with full production commencing in 2017.
“Throughout the year, the Company continued to haul ore from Cam & Motor Mine for processing at a rented nearby plant. Cam & Motor’s gold output almost doubled in 2016, increasing by 90% to 856kgs from 450kgs in the prior year,” said Chihota.
He added that the group’s associate, Murowa Diamonds is recovering on the back of a number of initiatives implemented in 2016.
“The Group’s Associate, Murowa Diamonds (Private) Limited is recovering on the back of a number of initiatives implemented in 2016.
“These include the rolling out of a new mining plan, doubling the plant’s processing capacity and investment in owner mining, these steps have resulted in a sharp drop in RioZim’s share of loss for the year from US$2.2million in 2015 to US$267 thousand in 2016,” said Chihota.