News Column

Riozim Seeks U.S $45 Million to Address Debt

May 28, 2014



MULTI-commodity miner RioZim Limited on Wednesday said it is negotiating for a US$45 million dollar facility to refinance the group's debt which now stands at US$40 million.

Speaking at the mining company's annual general meeting (AGM), managing director Ashton Ndlovu said negotiations with an international financier over the loan were at an advanced stage adding the cash would help increase the capacity utilisation and earnings once it has been made available.

"The group would be able to significantly cut back its average cost of funding, which had been reduced to 19 percent at the end of December 31 2013 from 21 percent in December 2012.

Ndlovu said the restructuring of the group into industry specific sector to attract investment into focused areas - gold, chrome, diamonds, base metals and energy - was almost complete.

An Italian group was looking at becoming a strategic partner in RioChrome and while RioZim still had pre-emptive rights over the diamond assets of Rio Tinto Plc.

Last year RioZim signed a partnership agreement with South African gold mining firm, DRD Gold, as it begun a restructuring exercise likely to split the group into several stand-alone units.

DRD Gold is a 50 percent partner in a greenstone belt project, Chizim Gold, in Zimbabwe.

The South African firm is, however, planning to relinquish its interest in this operation as it moves to become a fully-fledged dump reclamation company. The deal with RioZim appears to be in line with this strategy.

This month RioZim floated a tender seeking bids for contract mining at its Cam and Motor gold mine in Kadoma.

The company said the work put to tender included the open cast mining sequence of clearing, drilling and blasting, overburden mining clearing, drilling and blasting of ore and ore mining.

The Cam and Motor Mine is situated about 10km to the east of Kadoma and was once the largest producer of gold in Zimbabwe.


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Source: AllAfrica