Operational Update

Goldplat plc / Ticker: GDP / Index: AIM / Sector: Mining & Exploration

2 November 2018

Goldplat plc ('Goldplat' or 'the Company')

Operational update

Goldplat plc, the AIM quoted gold producer, with international gold recovery operations located in South Africa and Ghana and a gold mine in Kenya, is pleased to announce an operational update for the three months ended 30 September 2018 (the 'Quarter').

Overview

  • Reduction in gold production from the comparative period in the previous financial year and against annual targets due to the planned production decrease at the Kilimapesa Mine, effected by the closure of Plant 1, and by a decrease in volumes and grade of materials sourced for the two recovery operations:
    • Production for the Quarter of 6,138 ounces of gold equivalent represents a 40% decrease (Q1 2017: 10,227 ounces)
  • Decrease in gold equivalent ounces sold and transferred during the Quarter from the comparative period in the previous financial year due to reduced production during the Quarter and the sales from the first quarter of 2017 being augmented by a carry-over from a large contract produced during FY2016:
    • Gold equivalent ounces sold and transferred during the Quarter of 5,407 ounces represents a 62% decrease (Q1 2017: 14,374 ounces).
  • Good progress was made in terms of plans to secure funding to enable Stage 3 expansion and sustainable profitability at Kilimapesa, without further funding from the Group. A strategy has been implemented to put the mine on care and maintenance by the end of November 2018 should a transaction to secure funding not be in progress.
  • Previously reported problems with sourcing sufficient material for processing at Gold Recovery Ghana have continued into the first quarter of FY2019 as expected.  The expected turnaround began in the second quarter and management is confident of the outlook for the year.
  • Improvements seen at Goldplat Recovery in South Africa towards the end of September with regards to the quality of material have continued into the second quarter and the Company foresees a return to normalised production through the CIL circuits following a challenging environment during the Quarter.

Production for the Quarter

Goldplat Plc - Group 1st Qtr 1st Qtr 1st Qtr 1st Qtr Year ending Year ending
3 Months 3 Months 3 Months 3 Months 12 Months 12 Months
Actual Actual Previous Previous Previous Previous
Sep-18 Sep-18 Sep-17 Sep-17 Jun-18 Jun-18
Equivalent Gold Equivalent Gold Equivalent Gold Equivalent Gold Equivalent Gold Equivalent Gold
kg oz kg oz kg oz
Gold Equivalent Production            
             
Goldplat Recovery (Pty) Ltd   132   4,251   236   7,588   733   23,567
Gold Recovery Ghana Ltd   21   686   37   1,190   210   6,752
Kilimapesa Gold (Pty) Ltd   37   1,201   45   1,449   159   5,112
Total   191   6,138   318   10,227   1,102   35,431
             
Gold Equivalent Sold            
             
Goldplat Recovery (Pty) Ltd   94   3,038   285   9,170   655   21,059
Gold Recovery Ghana Ltd   19   610   81   2,604   249   8,010
Kilimapesa Gold (Pty) Ltd   35   1,109   38   1,224   159   5,112
Total   148   4,758   404   12,998   1,063   34,181
             
Gold Equivalent Transferred            
             
Goldplat Recovery (Pty) Ltd   20   649   43   1,376   162   5,219
Total   20   649   43   1,376   162   5,219
             
Gold Equivalent Sold and Transferred            
             
Goldplat Recovery (Pty) Ltd   115   3,687   328   10,546   817   26,278
Gold Recovery Ghana Ltd   19   610   81   2,604   249   8,010
Kilimapesa Gold (Pty) Ltd   35   1,109   38   1,224   159   5,112
Total   168   5,407   447   14,374   1,225   39,400

Goldplat Recovery (Pty) Ltd ('GPL'), South Africa

  • 44% decrease year on year ('YoY') of gold and gold equivalents produced during the Quarter to 4,251 ounces (Q1 2017: 7,588 ounces).
  • 65% decrease YoY of gold sold and transferred to 3,687 ounces during the Quarter (Q1 2017: 10,546 ounces). The 10,546 ounces of the previous period had included sales of gold produced during FY2016 but not sold during that year.
  • Production from the by-product section was lower than budget due to the lower supply volumes from clients.
  • The CIL circuits gold production was also lower when compared to the last quarter of FY 2018 due to a reduced overall head grade and metallurgical recovery.
  • Supply of by-products from clients started increasing towards the end of the Quarter and the Company is confident this will improve in the second quarter.
  • Test work on the large CIL stockpile material continues and a trial campaign is scheduled for the second quarter to determine feed grade and recoveries following onsite pre-treatment.
  • The process to secure West Pit 3 for deposition is still awaiting finalisation between the Department of Mineral Resources and another third party before GPL can move forward to finalise the design and other requirements.
  • The alternative option for reprocessing and final deposition of the Tailings Storage Facility (‘TSF’) continues to be evaluated and a decision on the way forward is expected by the end of the second quarter.
  • Several trials for the platinum mines commenced during the Quarter and more is planned for the second quarter in line with Goldplat’s strategy to expand the PGM side of the business.

 Gold Recovery Ghana Limited ('GRG'), Ghana

  • 42% decrease year on year of gold and gold equivalents produced during the Quarter to 686 ounces (Q1 2017: 1,190 ounces). This was mainly due to lack of feed material from local clients as they chose not to deliver during the period.
  • 77% decrease YoY of gold sold and transferred to 610 ounces during the Quarter (Q1 2017: 2,604 ounces).
  • Sources for significant volumes of material have been identified during the second quarter. Contracts are still being finalised and export logistics and regulatory issues still need to be agreed. The potential volume from these sources would allow GRG to achieve its annual target, provided the material is delivered over the next four to six months.
  • GRG attended a mining conference in Burkina Faso during the Quarter. The directors of GRG met with the Minister of Mines and fruitful discussions took place to position GRG as a West African business partner and service provider for Burkina Faso mining companies.
  • Sourcing material from South America for GRG continues and regular shipments are still taking place.

Kilimapesa Gold ('KPG'), Kenya

  • KPG produced 1,201 ounces of gold and gold equivalents (Q1 2017: 1,449 ounces) with 1,109 ounces of gold sold (Q1 2017: 1,224 ounces) on KPG's own account during the Quarter
  • Planned tonnage through the plant was exceeded by 6% during the Quarter, however the delivered mine grade was lower than planned.
  • A decision has been made to put Kilimapesa mine on care and maintenance if a suitable partner for the required expansion is not found by the end of November 2018. There has been good progress in finding the funds necessary to expand production to a sustainably profitable level, which would require no further funding from the Group.
  • The renewal application for the exploration permit has been submitted.

Anumso Gold Project, (‘Anumso’) Ghana

  • On 12 January 2018, Goldplat agreed to extend the option period within which Ashanti can acquire 75 per cent. of Goldplat's interest in the Anumso Gold Project to 31 October 2018.
  • The parties to the agreement will now enter into a process of confirming the initial expenditure of US$1.5 million that was required to be made by 31 October 2018.
  • Once this is confirmed Ashanti is expected to submit written notice of exercise of the initial option. Further announcements of progress will be made in due course.

Gerard Kisbey-Green, CEO of Goldplat, commented:
"Management remain confident that the ongoing focus on sourcing of sufficient quantities and quality material for the recovery operations and the continued focus on all identified Group strategic initiatives will yield improved results going forward despite the very difficult quarter for Goldplat reported on today.  Sourcing funding for Kilimapesa and curtailing the funding burden at Kilimapesa by the Group is of the highest priority and we look forward to significant progress in this regard during the current period."

Gerard Kisbey-Green CEO Goldplat plc Tel: +27 (71) 8915775
Colin Aaronson / Daniel Bush Grant Thornton UK LLP (Nominated Adviser) Tel: +44 (0) 20 7383 5100
James Joyce / Jessica Cave WH Ireland Limited (Broker) Tel: +44 (0) 207 220 1666
Charlotte Page / Susie Geliher St Brides Partners Ltd (Financial PR) Tel: +44 (0) 20 7236 1177