After failing to secure an investor to take over the whole group, RioZim now plans a major asset sale to pay off its US$76.5 million debt.
The miner will dispose of its stake in Murowa Diamonds, along with selected properties and mining claims, and is also seeking approval for a US$35 million loan secured against its assets.
The biggest part of the plan targets a US$60.8 million debt owed to key shareholder, RZM Murowa. To reduce this, RioZim will give up its 22.2% stake in Murowa Diamonds, valued at US$23.8 million, and four diamond claims worth US$4.6 million.
It is also selling smaller, non-core assets, including the One-Step gold claim in Mhondoro and the largely unexplored Mtandahwe claim in Chipinge, which has potential for copper and tungsten. On the property side, RioZim plans to dispose of assets in Nyanga, Newlands and Msasa.
Originally, the company had sought large-scale funding, including a potential sale of the whole business. But the funding requirement proved too large. So, RioZim now plans to break up its assets into smaller, stand-alone investments to sell.
“Over 15 potential investors have expressed interest in supporting the company through a mix of equity and debt financing. Initially, the approach focused on raising funds at group level. However, the scale of the required injection proved too large for most investors to commit fully,” the company says in a notice on the Zimbabwe Stock Exchange.
Alongside the asset sales, the company wants approval to borrow up to US$35 million, using its remaining mining assets and claims as collateral. The loan would fund working capital and help restart operations, without issuing new shares.
RioZim operates the struggling Renco, Dalny and Cam & Motor gold mines.
At Cam & Motor, problems worsened after a change in the type of ore. The mine shifted from oxide ore, which is easier to process, to harder refractory sulphide ore. This type of ore needs a specialised processing method, BIOX, which uses bacteria to break down the sulphides and release the gold. RioZim installed a BIOX plant in 2019, but the company failed to raise the US$35 million needed to make the upgrades needed to make the plant run properly. – (NewZWire)
