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Goldplat plc, the AIM listed gold producer in Africa, announces an operations update for its two market leading gold recovery businesses in South Africa and Ghana and its Kilimapesa Gold Project in Kenya.
Trading Update:
Goldplat continues to operate profitably in the second half of FY 2014 (‘H2 2014’), and the operating profit is expected to show a substantial improvement compared to the previous six months ended 31 December 2013 (‘H1 2014’), which resulted in an operating loss of £694,000. Whilst it is anticipated that H2 2014 will more than eliminate the H1 2014 loss, and that the full year results will show an overall operating profit, it is expected that this operating profit will be materially below market expectations.
The primary reasons for this are the short-term and temporary suspension of toll treatment activity and a delay in sales of fine carbon contracts at the Company’s Gold Recovery operation in Ghana; and the continuing losses incurred at the Kilimapesa gold mine in Kenya whilst the Company identifies a joint venture partner to increase the milling capacity. The Company’s South African gold recovery plant continues to maintain robust and profitable operations during H2 2014.
Goldplat’s CEO Ian Visagie said, “We continue to remain focused on building our cash generative, un-hedged, debt free gold recovery company in Africa for the benefit of all shareholders. In line with this, our primary gold recovery operations in South Africa and Ghana continue to trade profitably, and as a result we remain highly confident that our final results for the year ended 30 June 2014 will still report an overall operating profit. Whilst temporary problems incurred at Ghana have impacted anticipated profit levels during H2 2014, I am confident that growth in our recovery operations will continue in the near term, and believe our ability to remain profitable in these circumstances underpins the strength and robustness of our diverse mining service offering.”
Operations Update:
Gold Recovery Ghana Ltd (‘GRG’) – Ghana
GRG’s gold recovery operation, which enjoys a tax free status until 2016, is located in the free port of Tema in Ghana and continues to generate revenues for the Company by recovering gold from by-products of the mining process.
As part of the Ghanaian Government’s effort to legalise all mining operations in Ghana, the Environmental Protection Agency (‘EPA’) of Ghana is continuing to increase pressure to better regulate the mining industry. This drive from the EPA resulted in a change in the application of regulation on toll-treatment at third party processors. Consequently, GRG’s agreement with Endeavour Resources (‘Endeavour’) to purchase tailings from artisanal and small scale miners, which are processed by Endeavour, has temporarily been suspended to allow GRG to obtain an additional permit from the EPA. The Company is confident that this will be secured in the near term to allow the toll-treatment to continue to operate at its standard capacity.
GRG’s has two other profit centres, which continue to perform strongly; a carbon-in-leach processing plant at Tema, which re-processes tailings, and an incinerator section, which recovers gold from fine carbon and rubber mill liners. In regards to the Company’s fine carbon contracts however there has been a delay in sales from Goldplat’s third party refinery. It is expected that the treatment and in-turn valuation of the Company’s fine carbon product will be completed shortly and that sales from the refinery will be completed post year end.
Goldplat Recovery Pty Limited (‘GPL’) – South Africa
Goldplat’s GPL recovery plant in Benoni, South Africa, which processes by products of the mining process, such as woodchips, mill liners, fine carbon, slags, sludges and waste grease, continues to generate revenues and operated profitably during H2 2014.
Kilimapesa Gold Mining – Kenya
Whilst Goldplat’s cash generative, niche, gold recovery businesses remain the Company’s primary focus, Goldplat continues to progress discussions with joint venture partners to advance the development of Kilimapesa.
