Goldplat plc, an AIM listed gold producer with international gold recovery operations located in South Africa and Ghana, has announced an operational update for the first quarter of the current financial year (1Q21), ended 30 September 2021.
The recovery operations achieved the same combined operating profit for 1Q21 as for 1Q20 of £1 403 000 (1Q20: £1 403 000), although the average gold price in USD decreased 6.7% for 1Q21.
The Ghana operations continue to perform well as a result of the steady supply of material and achieved an operating profit for 1Q21 of £839 000 (1Q20: £280 000). The South African operation achieved an operating profit for 1Q21 of £564 000 (1Q20: £1 123 000), reflecting a significantly lower gold price in Rand terms in the period.
The following events have contributed to the 1Q21 operating results:
- The continued supply from current clients in Ghana and Mali was further supported by batches of material received from South America.
- The company’s engagement with mine management and government officials on different levels has continued, with the aim of increasing our footprint to ensure regular supply. Specific progress in this regard has been made during the quarter in Cote d'Ivoire.
- To build on the company’s market strategy in South America over the last five years, a decision has been made to expand the opportunities by establishing a processing and storage site in Brazil, at an initial cost of US$300 000, to capture part of the lower-grade material market which is not feasible to export to its other operations and also to improve services Goldplat can provide in country.
- Goldplat continues to evaluate its options for processing of artisanal tailings material, including the possibility of finding a partner in country.
- Although the gold produced and sold year-on-year was similar, the average gold price in South African Rands (ZAR) for 1Q21 was 19.3% lower year-on-year, resulting in operating profits being lower by 50%.
- The carbon-in-leach (CIL) circuits' production improved y/y by 9%, on the back of capital investment in the previous financial period in a jigging plant and a further £50 000 (less than the planned £75 000) incurred on a gravity circuit during 1Q21 on its largest milling and CIL plant.
- Gold produced from our by-products operations decreased by 16% as a result in variability of supply from the mines.
- As part the company’s strategy to build partnerships in industry and to create longer term visibility of supply of materials and associated earnings, it has agreed with West Wits Mining Limited, as announced on 12 October 2021, to process material from their early mine programme through Goldplat’s plant on a toll treatment basis. The initial programme will last approximately six months with material processed through the largest CIL circuit, with the option to extend.
- During 1Q21, the company has built its strategic precious metals (PGM) material to a level to warrant capital expenditure of US$300 000 on a plant to extract its value. This new plant will also enable it to further develop its PGM recovery business.
- Unrealised profits contained in material remains high at £900 000 (30 June 2021: £1.1 million) and is partly due to the increase in gravity gold production and the longer sales cycle it takes to realise the profit. The company is focused on reducing the turnover time and the figure should return to normal levels, approximately £500 000, within the next two quarters.
- Goldplat’s application for the water use license was submitted in the last week of October 2021, and it should get feedback before the end of 2Q21. It continues to manage and extend the deposit of material within the group's current tailings storage facility with the help of consulting engineers.
- Towards the end of October 2021 an application was made to get environmental approval for the installation of a pipeline to a process facility in the area. This pipeline could provide the company with an avenue to pump and process its current tailings facility which contains approximately 82 000 oz of gold (see press release dated 29 January 2016). The approval process will take approximately 12 months.
The company’s cash balances remain strong at £2 340 000 at end of 1Q21.
The buy-back of the shares in Goldplat Recovery held by certain minority shareholders, as announced on 18 June 2021, was completed in October 2021, with the full lending facility of ZAR 60 million (approximately £3.1 million) drawn from Nedbank and all payments made to the respective minorities.
The company has agreed with Caracal Gold to take up the remainder of the initial share consideration on the sale of Kilimapesa at the initial listing price of Caracal Gold and as a result, Caracal Gold has allotted an additional circa 32 878 000 shares in lieu of a cash payment of US$450 000, increasing the Group's shareholding in Caracal to 9.2%.
Werner Klingenberg, CEO of Goldplat commented: “I am pleased to see us continue to consolidate our interests in West Africa and look forward to build on this in South America. This, together with improvements in our production units in South Africa, is providing us with a platform to build longer term profitable recovery streams. I am encouraged by the progress made on the PGM front. With initial consideration on the sale of Kilimapesa and majority of the restructuring within the Group completed, we will evaluate our options to return value to shareholders.”
Read the article online at: https://www.globalminingreview.com/finance-business/04112021/goldplat-reports-quarterly-update/