Diversified resources group RioZim Limited (RioZim) is seeking shareholder approval to undertake extensive corporate measures – dispose assets, restructure debt, and access new financing – targeted at stabilising operations and restore viability.
The Zimbabwe Stock Exchange-listed miner has been facing persistent profitability challenges, largely attributed to constrained cash flows, elevated debt levels, inadequate capitalisation and ageing equipment, among other operational challenges.
The group told investors, in a circular this week, that the proposed measures – to be tabled at an extraordinary general meeting scheduled for 22 April 2026 – are targeted at “enhancing cash flow into operations” and “providing assurance to lenders”.
RioZim intends to dispose of selected non-core properties, one in Nyanga and another in the leafy suburb of Newlands, Harare, with minimum values set at US$165 000 and US$245 000, respectively.
The company is also seeking to sell certain mining assets, including the Mtandahwe Copper and Tungsten claims for no less than US$3 million, and the One Step gold claim for a minimum of US$1 million.
In addition, RioZim is requesting approval to secure a loan facility of up to US$35 million, to be backed by company assets.
The restructuring plan further includes the reorganisation of a US$60,8 million debt owed to joint-venture partner RZM Murowa.
This will involve relinquishing a 22,2 percent stake in the entity for US$23,9 million, alongside the transfer of four diamond claims valued at US$4,6 million.
The remaining US$32 million is expected to be written off.
“Many of the company’s mining claims and physical assets remain underleveraged. By pledging these assets to raise capital, the company can unlock value without immediate dilution of shareholder equity as would be the case in an equity raise,” RioZim said.
On the proposed borrowing, the company noted: “This structured and asset-backed approach minimises risk to the business while providing assurance to lenders, shareholders and other stakeholders that the borrowing is both measured and return on investment-oriented.”
If approved, the measures are expected to boost current assets by 14 percent, supported by a projected 250 percent increase in cash and cash equivalents to ZiG90,9 million.
At prevailing exchange rates, this equates to roughly US$3,5 million in liquid resources.
“The proceeds from these disposals will be used to partially settle long standing liabilities, easing pressure on the balance sheet…Most importantly improved financial position shall help preserve employment for over 1 000 employees and over 8 000 families whose livelihoods directly and indirectly depend on RioZim,” RioZim said.
However, total assets are forecast to decline by 27 percent to ZiG2,1 billion from ZiG2,9 billion.
Despite strong global gold prices in recent years, the mining group has lagged behind sector peers, with structural inefficiencies limiting its ability to benefit from favourable market conditions.
In a statement accompanying the group’s financials for the half year ended 30 June 2025, RioZim chairman Caleb Dengu said: “The operational difficulties stemmed from persistent undercapitalisation over the past three years, which severely constrained our ability to sustain production and invest in necessary infrastructure.”
Operational challenges have also included repeated equipment failures at the group’s Renco Mine, inconsistent ore supply at Cam & Motor, and the extended care-and-maintenance status of Dalny Mine, all of which have weighed on output. – TML