The purpose of this press release is for the Board of RioZim Limited to update all shareholders and stakeholders of the status of the Company following the withdrawal of the Cautionary Announcement dated 10 October 2018.
The withdrawal of the Cautionary Announcement was premised on the commitment by the Reserve Bank of Zimbabwe made in November 2018 to provide the Company with adequate foreign currency to meet the its operational requirements and to enable the Company to resume operations after an involuntary stoppage in October 2018. As part of the commitments made to gold producers in November 2018 to support their operations, the Reserve Bank of Zimbabwe undertook to allow all gold producers to maintain 55% of their export earnings in their foreign currency nostro accounts and to increase export incentives on all minerals. Notwithstanding these commitments, the Board of RioZim Limited regrets to advise that the Reserve Bank of Zimbabwe through its wholly owned subsidiary Fidelity Printers and Refiners (Private) Limited has been failing to meet these commitments. As of date, the Company has experienced significant and persistent delays in payment of its foreign currency allocation for deliveries made to Fidelity Printers Refiners (Private) Limited since December 2018 and this has severely affected the viability of the Company’s operations and consequently, the Company has been recently forced once again, to involuntarily suspend operations across all three of its gold mines pending full payment of its foreign exchange proceeds which it requires in order to procure the necessary consumables needed to keep the gold operations running. As at the Company’s reviewed half year financial statements, the gold business contributed circa 90% of the Company’s total revenue. Therefore, the current stoppage in production has a material impact on the Company’s performance.
In the interim and as a result of the above, the Company is currently engaging the Reserve Bank of Zimbabwe, the Chamber of Mines and other authorities on how to expediently resolve this matter. In the event that these engagements are unable to yield any positive resolution to the matter at hand within the immediate future and production at all three gold mines remains suspended indefinitely, the Board shall proceed to duly notify all shareholders and the investing public by way of a formal cautionary announcement.