Goldplat plc, the AIM listed gold producer, is pleased to announce its interim results for the six months ended 31 December 2009.
Operating profits up 54% to £1,225,000 (2008: £792,000)
Profit before tax of £1.15m (2008: £1.20m) due to sharp movements in exchange rates
South African and Ghanaian gold recovery plants production for six months totalled 8,309oz (2008: 12,084oz )
Kilimapesa Gold mining operation in Kenya progressing towards commercial gold production - mining lease application expected to be completed shortly
Acquired option over the prospective 246 sq km Nyieme Gold Project in Burkina Faso with the target to bring it into production
Continue to assess various acquisition opportunities across Africa to further strengthen gold portfolio
Goldplat CEO Demetri Manolis said, "These are exciting times for Goldplat as we continue to bolster our position as a gold producer in Africa . With the mining licence allowing us to make commercial gold sales at our Kilimapesa Gold mine close to finalisation, and a new gold mining project in Burkina Faso, an emerging gold district, we are realising our strategy of building a portfolio of production and exploration properties to become a mid tier gold producer. The development of a strong portfolio is paramount to our strategy and we are actively seeking other opportunities. What differentiates us is our ability to leverage our two gold recovery businesses in South Africa and Ghana , where we have continued to increase the production efficiencies which in turn has improved our cash flow from which to grow the Company. With these developments in mind, I believe 2010 will be a period of growth for the Company."
For further information visit www.goldplat.com or contact:
|Demetri Manolis, CEO||Goldplat plc||Tel: +27 (0) 11 423 1203|
|James Joyce||WH Ireland Limited||Tel: +44 (0) 20 7220 1666|
|David Porter||WH Ireland Limited||Tel: +44 (0) 20 7220 1666|
|Bill Sharp||Alexander David Securities Ltd||Tel: +44 (0)20 7448 9820|
|David Scott||Alexander David Securities Ltd||Tel: +44 (0)20 7448 9820|
|Felicity Edwards||St Brides Media & Finance Ltd||Tel: +44 (0)20 7236 1177|
|Isabel Crossley||St Brides Media & Finance Ltd||Tel: +44 (0)20 7236 1177|
It gives me great pleasure to report on Goldplat's progress as it moves towards fulfilling its objective of becoming a mid-tier gold producer focussed in Africa . During the period under review, our gold recovery businesses in South Africa and Ghana performed well, providing positive cash flow to fund the development of our gold mining project in Kenya towards production and acquire a new gold mining project in Burkina Faso .
Gold Recovery Businesses
Our two gold recovery plants in South Africa and Ghana are performing well, generating healthy revenues. For the six months to 31 December 2009 the recovery operation in South Africa produced 6,369 oz (2008: 7,814 oz) whilst our Ghanaian plant produced 1,940oz (2008: 4,270 oz).
As these figures demonstrate, the South African plant has performed in line with management's expectations, overcoming the problems facing South African gold producers from the strength of the South African Rand. In part this can be attributed to the work completed during 2009 to increase the plant's capacity and economic capabilities. Not only did we commission a larger mill and increase its flotation capacity, we also expanded the range of materials being processed and the techniques used. To this end, we designed and are currently installing an intensive cyanidation plant to leach the gravity concentrates and load gold onto carbon for elution, due to come on line shortly. This is expected to result in significant cost savings and improved cash flow. Additionally, Platinum Group Metal concentrates continue to be produced in small quantities, but these represent less than 5% of total precious metal production.
Income at the Ghanaian recovery plant fell slightly short of management expectations, mainly due to delays in the delivery of concentrates to the refiners. However, production has now increased and development is proceeding well. A new incinerator has been commissioned and has produced ash with grades exceeding 600 g/t gold from relatively low grade material. An intensive cyanidation plant is also being installed, which will enable us to sell our gold in bullion form and will, as with the South African recovery plant, result in cost savings and improve cash flow.
Our relationships with major producers as well as with the authorities in both South Africa and Ghana continue to strengthen - indeed, the Ghanaian Minister of Mines recently visited our plant in Tema and was impressed with the added value operation. These relationships are important to our businesses as we solidify their positions as key cogs in the whole cycle of producing minerals, particularly in terms of fulfilling environmental obligations.
Kilimapesa Gold, our gold mining project in south western Kenya within the historically producing Migori Archaean Greenstone Belt, is progressing towards commercial gold production. Goldplat's management have been working closely with the commissioner of Mines and Geology to finalise the mining lease application. The National Environmental and Management Agency have issued the licence for the Environmental Impact Assessment and all agreements with the local authorities have been completed. The final component, the cadastral survey, is underway and is expected to be completed shortly. The committee for approving the mines Mining lease, which is chaired by the Commissioner of Mines and Geology has given its approval pending the completion of this survey. Once this is officially approved, Kilimapesa Gold will be permitted to make commercial sales of gold, including gold currently held in stock, and production of gold will recommence.
In line with the Company's strategy of expanding its geographic footprint, at the end of the period under review, Goldplat announced that it had acquired an option over the prospective 246 sq km Nyieme Gold Project in Burkina Faso . Previous exploration generated exciting results and identified high-grade quartz vein structures over a 4 km trend so we now plan to commence a 2 ,500m diamond drilling programme and also carry out a surface geochemical and mapping programme to define the southerly extent of the veins. From this we hope to establish a JORC-compliant resource, which will form the basis of a production development programme if economically viable.
We continue to assess various acquisition opportunities across Africa to strengthen our portfolio, specifically looking at mining assets that would utilise the Company's knowledge and experience in the gold producing sector.
The financial results show a further strong trading period. The Operating Profit increased by more than 50% from the same period last year to £1.22m (2008: £792,000) and is the highest six month operating profit achieved by the Group. This is despite a charge in respect of share options of £118,000, with no comparable charge in the half year to 31 December 2008. In addition, the costs of seeking new projects and in particular investigating and evaluating the Nyieme gold project, have been charged before arriving at the Operating Profit.
Sharp movements in exchange rates, in particular the strengthening of the South African Rand, resulted in Finance Income and Costs being a net charge of £71,000 in the current period compared with a net credit of £409,000 in the comparable period last year. These movements are random and not connected to the actual trading performance, and, in the case of the 2008 credit, a large part of it was clawed back in the second half. For that reason the Profit before Tax for the six months is £1.15m (2008: £1.20m).
Looking forward, the future for both our recovery businesses looks bright. With good stock piles and a steady flow of materials for processing through contracts with a growing number of major mining companies as well as increased capacities and capabilities, we anticipate that revenues, in particular in Ghana , should rise accordingly.
On the mining front, we are excited about the prospects at Kilimapesa Gold that will, we hope, see the start of commercial production in the near future as well as our new mining venture in Burkina Faso , for which we plan a drilling campaign in 2010 with the aim to establish a JORC compliant resource in due course. With various other opportunities under review, the remainder of the year will no doubt be busy for us, so we look forward to regularly updating shareholders on our progress and thank them for their continued support.
23 February 2010
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