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7/22/2019 RioZim EGM 2010
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fromRIO TINTO Southern Rhodesia1956-2004
toRIOZIM LTD
July 2004
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RioZim Rights Issue June 2010RioZim Rights Issue June 2010
Presentation Outline
z Brief History
z Current Operations
z Growth Projects
z Application of Rights Issue Fundsz Financial Projections 2010 - 2015
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RioZim Rights Issue June 2010RioZim Rights Issue June 2010
1973:
Exploration forcoal started inGokwe area
Mar57:
Acquiredmining rights atEmpress Nickel
1985:Refinery re-commissioned
1982:Empress MineClosed, Rencooffic ially opened.
1975:
Renco Minepurchased
1975:
Sengwa
explorationproject halted(Restarted in1985)
Sep68:Cam MineClosed, EmpressNickel Mineestablished
1959:
AcquiredCam & MotorMine at EiffelFlats
Aug56:
Rio Tinto(SouthernRhodesia)Incorporated
1969:
Tinto Industriesformed
Riozims History Goes Back Over Half A
Century Significant Milestones
1956 1960 1970 19891980
1982:
Electric ity SupplyCommissionadvises of shortfallfrom 1988
Rio Tinto Plc Era
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RioZim Rights Issue June 2010RioZim Rights Issue June 2010
2004:
Murowa Diamonds restructured toRioZim - 22%,
Rio Tinto Plc -78%
2004:
Restructuring results in conversion of Rio Tinto
Plcs ordinary shares in the company into onespecial dividend share
1995:Small Mining Operation atSengwa to supply portion oflocal coal
1994:
Mhondoro Platinuminterests sold to BHP/Delta
1994:
Tinto Industries disposed of
In 2004 Rio Tinto Plc Restructured its
Stake in RioZim - Transformation
1990
1997:
Discovery of Murowa
Kimberlites by joint ventureCompany between RioTinto PLC and RioZim
2000
2004:
Company name changed to RioZimLimited, a 100% locally owned entity
3rd Quarter04:
Murowa Diamonds commenced operations
2009
RioZim Era
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RioZim Rights Issue June 2010RioZim Rights Issue June 2010
The Terms of Separation
z Rio Tinto plc gave up 56% control in Rio Tinto
Zimbabwe for 28% control in Murowa originallycontrolled via Rio Tinto Zimbabwe
z Rio Tinto plc retained a special dividend share
in RioZim Ltd for 10 years to 2014.( No votingrights)
z Rio Tinto plc retained 50% shareholding in
Sengwa Coal and 78% shareholding inMurowa following the separation.
z RioZim became locally owned and controlled
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RioZim Rights Issue June 2010RioZim Rights Issue June 2010
RioZim Ltd SHAREHOLDING
Summary of Shareholding:
z RioZim Foundation 20%z Old Mutual Zim 20%
z Barclays Nominees 13%
z
Scaiflow Pvt Ltd 9%z Local Pension Funds 19%
z Local Nominees 8%
z Individuals (Zimbabweans) 6%
z Individual-Non Resident shareholders 5%
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RioZim Rights Issue June 2010RioZim Rights Issue June 2010
OUR VISION, MISSION AND VALUESVision
To be a large diversified regional company delivering shareholderwealth from natural resources.
MissionTo achieve success through:
Optimization of existing businessExploration for opportunit iesImplementation of world- classoperating standardsA culture of success
Recognit ion of our employeesand communit iesHigh standards of HSEmanagementGood corporate governance
Values
1. Integrity2. Fairness3. Accountabil ity4. Professionalism5. Transparency
6. Reliabil ity7. Diligence8. Commitment9. Team Work
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RioZim Rights Issue June 2010RioZim Rights Issue June 2010
ASSET PORTFOLIO
Ownership
100%
50%
22%
60%
MUROWADIAMONDS
SENGWA
RIOZIM
RMENTERPRISES
RIOZIM
PROPERTIES
ALL OTHER
CLAIMS ANDPROSPECTS
EMPRESS
NICKELREFINERY
RENCO
MINE
Ownership
100%
50%
22%
60%
MUROWADIAMONDS
SENGWA
RIOZIM
RMENTERPRISES
RIOZIM
PROPERTIES
ALL OTHER
CLAIMS ANDPROSPECTS
EMPRESS
NICKELREFINERY
RENCO
MINE
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CURRENT AND PROPOSED OPERATIONS
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Brief outline of operations
z Renco Mine
Started operations in 1982Production peaked in the years 1982 to 2000 at anaverage of 1600 kg per annum.
To date in excess of 37 tonnes (1,2M oz) of goldproduced
Production decline started in 2001 declining to750kgs
2008 production declined to 450 kg
Potential for growth to 1600 kg stil l existsNeeds investment in development and plantrefurbishment
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RioZim Rights Issue June 2010RioZim Rights Issue June 2010
EMPRESS NICKEL REFINERY
z Empress Mine life 1968 to 1982
z Refinery re-opened in 1985 after closure ofEmpress Mine in 1982 as a toll refinerz Toll refines matte from BCL and Tati mines in
Botswana for life of minez Contract is for 17 400 tonnes matte per annumz Can produce up to 700t nickel and 700t of
copper per month.z
Current monthly output around 500t nickel and480t copper due to input supply constraints.z Major constraints have been energy, water and
oxygen supplies
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RioZim Rights Issue June 2010RioZim Rights Issue June 2010
SENGWA COLLIERY
z 50 year renewable Special Grant to mine coal.z Granted in 1989z Proven ore reserves of 519 mil lion tonnesz Total reserves exceed 1,3 bill ion tonnesz
Small scale mining for the local industryparticularly tobacco was stopped in 2008z Output was up to 25 000t per month.z Resource utilisation very poor with a conversion
to value of 28,5% on a 21m seam.z Resource best used as a thermal fuelz Power station would use up to 100% of the seam
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SENGWA COLLIERY
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RioZim Rights Issue June 2010RioZim Rights Issue June 2010
Challenges and Mitigation
z Power
z Oxygen Supply
z Water Supply
z Skillz Working Capital
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RioZim Rights Issue June 2010RioZim Rights Issue June 2010
Growth Projects Post 2004z Cam & Motor Gold Mine
z
Renco Extensionz Darwendale Chrome
z Murowa Expansion
z Sengwa Collieryz Sengwa Power Station
z Chimakasa Nickel
z Kenilworth Gold Project
z Prospective Claims
z
Prospective EPOs.
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EIFFEL FLATS
Cam & Motor Gold Project
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Underground mine closed in 1968 after
producing 150 tonnes of gold (biggestproducer in the country)Cut-off grade was 8g/t and gold price was
$35 / ozFinal mine depth 6000 ft (~1800m)Great potential for significant open pit minewith subsequent underground operationCurrent exploration programme isconfirming the potential for a large low costgold producer
Cam & Motor Gold Project
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RioZim Rights Issue June 2010RioZim Rights Issue June 2010
Zimbabwe Gold Production(up to 1980)
020406080
100120140
160
Cam
&Mot
or
Globe&
Pho
enix
Rezen
deGroup
Sham
vaDa
lny
Wander
erGroup
Lonely
Mazoe
Gro
up
Golden
Valley
Arcturus
Muriel
Mine
Gol
dproduc
ed
(tonnes)
Cam & Motor Gold Project
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Cam & Motor Gold Minez New resource at the Cam & Motor
z
Resource defined +10 tonnes (320k oz) gold to a depth of 100mz Potential to increase to 16 t (500k oz) to a depth of 100m
z Potential exists for resource at greater depth(200m+)
z Good grade 4g/t
z
Open Pit operationz Pilot operation to start in 2011 and full plant 2013
z To produce 2000 kg (70 000 oz) p.a for 10years+
z Cost per ounce to be below $600
z To be funded from internal resources and borrowing
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RioZim Rights Issue June 2010RioZim Rights Issue June 2010
z Motor lode drilled 39 diamond dri ll holes.
z
Identif ied 1.35 mill ion tonnes at 4.07 g/t, openpittable down to 100m (5696 kg,177 000 oz)
z Resource open ended laterally and in depth
z Cam lode drilled 11 diamond drill holes.
Identified 490 000 tonnes at 2.97 g/t, openpittable down to 100m (1506 kg,47 000 oz)
z Resource open ended laterally and in depth
z Petrol lode Identif ied 709 000 tonnes at 4.04 g/t,open pittable down to 100m (3086 kg, 96 000 oz).
z Potential for more than 31 tonnes (1 mill ionounces) within 200m from surface
Cam & Motor Gold Project
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RioZim Rights Issue June 2010RioZim Rights Issue June 2010
Resources As At 1 May 2010Resources As At 1 May 2010
319 900
177 154
95 891
46 855
ounces gold
10 2853.902 552 391GRAND TOTAL
5 6964.071 353 049MOTOR (MEASURED,INDICATED AND INFERRED)
3 0864.04709 176PETROL (INFERRED)
1 5062.97490 166CAM (INFERRED)
Kg GoldGradeTonnesOREBODY
Cam & Motor Gold Project
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RioZim Rights Issue June 2010RioZim Rights Issue June 2010
z Mining Special Grant number 1585 issuedon 28 September 2009
z Key stakeholders engaged (Municipality,ZESA, Ministries, EMA, communities, NGOsetc)
z Potential for early production using nearbyprocess plant(s) being evaluated.
z Open pit mine design has started usingconsultants.
z Drill ing continues
Cam & Motor Gold Project
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RENCO MINE
Renco Extension
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Renco Mine Reserves And ResourcesAs At 1 January 2010
Kg GoldGradeTonnesMINERAL RESOURCES
87336,631 316 500Total measured and inferred mineral resources at 31December 2009
78356.811 149 830Inferred mineral resources as at 31 December 20098985.37167 120
Measured mineral resources as at 31 December
2009
24125.73420 960Proved and Probable Reserves as at 31 December2009
4926.5475 210Probable ore reserves as at 31 December 2009
19205.55345 750Proved ore reserves as at 31 December 2009
Kg GoldGradeTonnesORE RESERVES
Renco Extension
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RioZim Rights Issue June 2010RioZim Rights Issue June 2010
z
Current operations inhibited by hyperinflationand gold payment modalities over last 10 years+
z Plan is to maintain and progressively increase
current production rates while proving largerresources.
z Renco resource is capable of expansion laterallyand in depth.
z Plan is to define adequate resources to supply alarger plant producing >1500 kg per annum fromRenco orebody by 2015
RENCO MINE RESOURCE DEVELOPMENTRenco Extension
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RioZim Rights Issue June 2010RioZim Rights Issue June 2010
IMPLEMENTATION PLAN
z Prove more gold resources in lateralextensions to existing areas
z Prove more gold resources exist at depth.
z Develop and equip haulages to knownresources in lateral extensions of 450 and510 areas.
z Design and plan shaft deepening to 270 level(120m below present shaft bottom)
Renco Extension
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RioZim Rights Issue June 2010RioZim Rights Issue June 2010
Renco Extension
z 84 000 metres of development overthe next 4 years
zAreas of development already
identified
z To improve both grade and resource
z Production to stabilise at 1300kg(42 000 oz) per annum
z Cost per oz to stabilise at US$600
IMPLEMENTATION PLAN
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RioZim Rights Issue June 2010RioZim Rights Issue June 2010
RENCO BELOW 390LEVEL TARGET
RENCO EAST
TARGET
Renco Extension
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DARWENDALE CHROMEPROJECT
Darwendale Chrome Project
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Darwendale Chrome Project
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RioZim Rights Issue June 2010RioZim Rights Issue June 2010
z 1406 claims covering a total of 6742 ha.
Riozim in JV (60:40) with MaranathaFerrochrome.
z RioZim has previously producedchromium concentrates from alluvialdeposits along the Great Dyke
z Chrome seams have been mined forlumpy chrome previously (seams 3 7).
Darwendale Chrome Project
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RioZim Rights Issue June 2010RioZim Rights Issue June 2010
Darwendale Chromez Alluvial Chrome resource of more than
20 million tonnes
z Underground narrow seams provideadditional resource
z Low cost technology for processingalluvial deposits available
z Short plant lead times
z Good prices for concentrates on theinternational market.
z Plan to produce 30 000 tonnes ofconcentrate per annum from 2012
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RioZim Rights Issue June 2010RioZim Rights Issue June 2010
IMPLEMENTATION PLAN
z Evaluate and prove alluvial chrome resources bypitting, sampling and metallurgical testwork.
z Install modular plants capable of treating 300 000tonnes per annum. Each plant will produce about
30 000 tonnes per annum of concentrates.
z Evaluate potential for mining of the chrome seamsusing modern equipment and techniques.
z Evaluate the potential for PGMs in the areacovered by the claims
Darwendale Chrome Project
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RioZim Rights Issue June 2010RioZim Rights Issue June 2010
Murowa Expansionz Expansion project feasibility
update 2010/2011z Expansion to 2 million tonnes per
year
z Current project not optimum(300k cts pa)
z
The expanded project willoptimise the exploitation of theresource.
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RioZim Rights Issue June 2010RioZim Rights Issue June 2010
SENGWA COLLIERY
Sengwa Colliery ProjectSENGWA COLLIERY
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z Special Grant for the supply of coal fuel to apower station since 1989.
z Proven ore reserves of 519 mill ion tonnesz Total resources amount to 1.3 billion tonnesz Coal most suitable as thermal fuel for a purpose
built power station on site.z Calorific value 17 20 MJ/kg (as mined)z Ash content 22 - 29%z High ash fusion temperature (>1400C)z Low strip ratioz Low sulphur content (0,4%)
Sengwa Colliery Project
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RioZim Rights Issue June 2010RioZim Rights Issue June 2010
z Opportunit ies in the SADC power supplymarket abound.
z Power project (2400 MWe) being pursued,a letter of support from Ministry of Energynow issued.
z
Letter of approval and support from theMinistry of Economic Planning andInvestment Promotion
z Exploration in the northern coal field
exposed other significant resourcesz Other opportunities for coal usage being
pursued.
Sengwa Colliery Project
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z Original mine plan and costing done in 1996.
z Mining methods and equipment havedeveloped since then.
z Cost of mining coal is a major input into thecost of electrical power.
z The original mine plan will need to bereviewed and new cost estimates generatedfor the Fuel Purchase Agreement
z The original Environmental ImpactAssessment and Environmental ManagementPlans will also need to be reviewed.
Sengwa Colliery Project
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RioZim Rights Issue June 2010RioZim Rights Issue June 2010
Sengwa Power Station
z Coal resource of 1.3b tonnesz Capable of sustaining 2 or 3 large power stationsz Plan for a 2400MWe power station by 2014z Letters of Support from Government obtainedz An independent consortium formed to promote the
power station projectz Project feasibil ity update to commence in Q3 2010z Demand for power is huge internally and in SADCz Requires signif icant long term financial outlay
(+US$3b) syndicated debt and equity
z RioZim Ltd to be a minority player in the powerstation project
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CHIMAKASA NICKEL
Chimakasa Nickel Project
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z Diamond dril ling done in the 1970s
z Drilling then produced an inferred resourceof 240M tonnes containing 0,27% Ni.(650 000 tonnes nickel in situ)
z Mineralogical work done at that time
indicated that the nickel was in magnetiteand not suitable for feed into the nearbyEmpress Nickel Mine operation.
z Recent geophysical work and diamond
drilling confirmed the grade and mineralogyof the resource.
Chimakasa Nickel Project
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IMPLEMENTATION PLAN
z Diamond drilling to increaseknowledge of the resource andprovide sufficient fresh samples for
metallurgical testwork.z Evaluate potential for other base
metals and PGMs.z Develop metallurgical process
flowsheets to produce a ferro-nickelproduct.
Chimakasa Nickel Project
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Kenilworth Gold Project
KENILWORTH
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z Anomalies defined during diamondexploration programme.
z Site is near the Maligreen Gold Mine.z Geochemical sampling post 2004 confirmed
a potential gold anomalyz Geophysical reconnaissance in 2009 and
2010 assisted in defining structures overlainby Kalahari sands.
z Intention is to enter into a suitable dri llingprogramme to further evaluate the potentialfor economic exploitation.
Kenilworth Gold Project
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RioZim Rights Issue June 2010RioZim Rights Issue June 2010
Outstanding EPOs
14400918.10.05CoalMasvingoSpecial Grant 56/05
450003/10/2006Au & CuHarare40/06
376652/6/2004
Au, Cu, Ag, As,
& MoMasvingo156/04
614808/12/2005Au, Ni, Cr, PGM
& CuGweru100/05
609115/26/2005Au, Ni, Bi & CuMasvingo36/05
599275/3/2005Au, Ni, Pt & CuGweru31/05
1540211/19/2004DiamondsGweru286/04
298809/23/2004Au, Ni, CuHarare248/04
438334/11/20032/18/2003DiamondsMasvingo10/03
518995/30/20031/28/2003DiamondsGweru05/03
367645/2/20038/23/2002DiamondsGweru29/02
Area(Ha)
DateGazetted
DateSubmittedIn Respect Of
MiningDistrict
EPO APPLICATIONNo.
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RioZim Rights Issue June 2010RioZim Rights Issue June 2010
Financial Summary
z Application of Rights Funds
z Gold Division Turnoverz Gold Production
z Production Costs
z
Group Earnings Summaryz Profit Sensitivity to Gold Price
z Group Profit Contribution
z Total Comprehensive Profit attributable toOwners
z Return to Shareholders
z Total Equity and Debt
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RioZim Rights Issue June 2010RioZim Rights Issue June 2010
Application of Rights Issue Funds
Debt repayment 13 800
Refurbishment 9 000-Renco Gold Mine 4 000-Empress Nickel Refinery 5 000
Exploration 1 000New projects 14 500
-Darwendale Chrome 2 500-Sengwa Coal 1 000-Chimakasa 1 000-Cam and Motor 5 000-Kenilworth 1 000
-Renco exploration 4 000Transaction costs 1 700Total 40 000
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RioZim Rights Issue June 2010RioZim Rights Issue June 2010
24
28
32
36 37 36
0
12 11
61 61 61
24
40
43
97 98 97
0
20
40
60
80
100
120
2010 2011 2012 2013 2014 2015
US$million
Renco
Cam & Motor
Total
Gold Division Turnover
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RioZim Rights Issue June 2010RioZim Rights Issue June 2010
Gold Production Oz
24664
31000
37000
42091 42091 42091
0
13000 13000
69816 69816 69816
24664
44000
50000
111907 111907 111907
0
20000
40000
60000
80000
100000
120000
2010 2011 2012 2013 2014 2015
oz
Renco
Cam & Motor
Total
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RioZim Rights Issue June 2010RioZim Rights Issue June 2010
914
741
627
579 579 591
0
843 843
579 579 591
1027
950
900 900 900 900
0
200
400
600
800
1000
1200
2010 2011 2012 2013 2014 2015
US
$
Renco
Cam & Motor
Gold Price/oz.
Production Cost/Oz Vs Selling Price/Oz
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RioZim Rights Issue June 2010RioZim Rights Issue June 2010
0.5
5
8
32
16
22
1918
01
34
17
30
32
56
0
10
20
30
40
50
60
2010 2011 2012 2013
$millions
Gold Divis ion
Base Metals
Chrome
Total
Group Earnings Summary
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RioZim Rights Issue June 2010RioZim Rights Issue June 2010
Profit Sensitivity to Gold Price
0
45
10 10 10
0
89
20 20 20
0
5
10
15
20
25
2010 2011 2012 2013 2014 2015
US$million
10%
20%
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RioZim Rights Issue June 2010RioZim Rights Issue June 2010
Group Profit Contribution
0.5
5
8
32 3130
16
22
1918
17 17
01
34
5 5
0
2 2 2
11 11
17
3032
56
6463
0
10
20
30
40
50
60
70
2010 2011 2012 2013 2014 2015
US$m
illions
Gold Division
Base Metals
ChromeMurowa Diamonds
Total
Total Comprehensive Profit
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Total Comprehensive Profit
Attributable To Owners
4
12
10
33
44 44
0
5
10
15
20
25
30
35
40
45
50
2010 2011 2012 2013 2014 2015
US$m
illion
TCPAO
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RioZim Rights Issue June 2010RioZim Rights Issue June 2010
Equity & Debt profile 2010-2015
-100
-50
0
50
100
150
200
2010 2011 2012 2013 2014 2015
US$millio
ns
RioZim Shareholders
Outside ShareholdersDeferr ed Tax & LTPs
Exter nal Debt
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RioZim Rights Issue June 2010RioZim Rights Issue June 2010
The End