Operational Update

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

4 February 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 31 December 2018 (the 'Quarter' or 'Q2 2019').

Overview

  • 57% increase in gold equivalent ounces produced from the previous quarter to 9,648 ounces (Q1 2019: 6,138 ounces) and a 4% decrease year-on-year (Q2 2018: 10,022 ounces) demonstrating a return to planned production levels.
  • 16% year-on-year increase in gold equivalent ounces sold and transferred during the Quarter due to higher production to 10,178 ounces (Q2-2018: 8,794 ounces).
  • As was forecast at the end of the previous quarter, production levels at Goldplat Recovery during the period returned to normal levels with both the by-product sections as well as the carbon-in-leach ('CIL') circuits exceeding planned production. This was due to the sourcing of material from clients returning to normal as well as the focus on processing built-up inventory in the plant during the period.
  • Production at Gold Recovery Ghana improved on the previous quarter due to a number of local Ghanaian contracts being processed and increased sourcing from South America. During the Quarter a major West African client with substantial material available from a number of operations agreed to send a trial batch of material to Gold Recovery Ghana and this is expected to be processed during the current quarter, as soon as export logistics and legalities have been finalised.
  • Sourcing sufficient quantities of material for processing in Ghana remains erratic and an area of strategic priority.
  • At Kilimapesa, production was further reduced, according to plan. In the last update it was reported that a strategy had 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. Progress in respect of a possible transaction during the Quarter enabled management to take the decision not to proceed to care and maintenance to date.

Gerard Kisbey-Green, CEO of Goldplat, commented: "Overall the production numbers for the Quarter were good and importantly, showed a dramatic turnaround when compared to the previous quarter. Goldplat Recovery had a very good Quarter and this momentum has carried through to the current quarter. Although the situation in Ghana has improved, our teams are focussed on improving the predictability of sourcing material, including from within Ghana, elsewhere in West Africa as well as South America. Unfortunately, Kilimapesa continues to report poor results and the Company hopes to progress financing discussions to a point where plans can be shared with the market and our investors during the current quarter.

"While we reported very positive production and sales numbers for the Quarter, unfortunately we don't expect this to be sufficient to make up financially for the continued losses at Kilimapesa and poor first quarter of the financial year- this will be reflected in the Interim announcement scheduled for 25 February 2019."

Production for the Quarter

Goldplat Plc Consolidated 2nd Qtr 2nd Qtr 2nd Qtr 2nd Qtr 6 months 6 months
Dec-18 Dec-18 Dec-17 Dec-17 Dec-18 Dec-18
Equivalent Gold Equivalent Gold Equivalent Gold Equivalent Gold Equivalent Gold Equivalent Gold
Kg Oz kg oz kg Oz
Gold Equivalent Production
Goldplat Recovery 219 7 034 198 6 380 351

11 285
Gold Recovery Ghana 55 1 757 75 2 408 76 2 443
Kilimapesa Gold 27 857 38 1 234 64 2 058
Total 301 9 648 311 10 022 491

15 786
Gold Equivalent Sold
Goldplat Recovery 185 5 932 113 3 639 279 8 970
Gold Recovery Ghana 41 1 319 65 2 089 60 1 929
Kilimapesa Gold 36 1 174 47 1 498 71 2 283
Total 262 8 425 225 7 226 410

13 182
Gold Equivalent Transferred
Goldplat Recovery 55 1 762 49 1 568 75 2 411
Total 55 1 762 49 1 568 75 2 411
Gold Equivalent Sold and Transferred
Goldplat Recovery 240 7 694 162 5 207 354

11 381
Gold Recovery Ghana 41 1 319 65 2 089 60 1 929
Kilimapesa Gold 36 1 174 47 1 498 71 2 283
Total 317

10 187
274 8 794 485

15 593

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

  • 10% increase year on year ('YoY') to 7,034 ounces (Q2 2018: 6,380 ounces of gold and gold equivalents produced during the quarter).
  • During Q1 2019 production from both by product circuits as well as the CIL circuits was significantly below plan and it was reported that these levels were returning to normal during Q2 2019. Production levels during the Quarter showed an increase of 65% on the previous quarter (Q1 2019: 4,251 ounces).
  • 48% increase YoY of gold sold and transferred to 7,694 ounces during the Quarter (Q2 2018: 5,207 ounces) and an increase of 109% on the previous quarter (Q1 2019: 3,687 ounces).
  • Production from the by-product and the CIL sections was higher than expected due to the return to expected supply of material from clients, as well as a concerted effort to process inventory on site.
  • Large volumes of inventory, not including strategic stockpiles, were processed during the Quarter, monetising inventory previously "dormant" due to the nature of the material or economics of final processing. This clean-up has continued into the second quarter.
  • Test work on the large CIL stockpile material continued during the period with a trial campaign yielding opportunities for upgrading this material should it be decided to process all or part of the stockpile in the future.
  • The process to secure West Pit 3 for deposition is still awaiting finalisation with the Department of Mineral Resources 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.
  • Supply of material containing PGMs including woodchips and other by product material was enhanced with a contract being concluded with one of the major producers. This will allow a degree of flexibility going forward in processing either gold containing or PGM containing woodchips so as to optimising some of the lower grade circuits.

Gold Recovery Ghana Limited ('GRG'), Ghana

  • 27% decrease year on year of gold and gold equivalents produced during the Quarter to 1,757 ounces (Q2 2018: 2,408 ounces), production did however increase by 156% compared to the preceding quarter (Q1 2019: 686 ounces).
  • 27% decrease YoY of gold sold and transferred to 1,319 ounces during the Quarter (Q2 2018: 2,089 ounces).
  • Two contracts in Ghana were re-initiated during the Quarter and supply of small batches of material from South America continued.
  • A one-off small but very high-grade batch of material was also received from a South American client and processed during the Quarter.
  • Following prolonged negotiations with a major gold producer with operations in West Africa, the producer has agreed to deliver a trial batch of material to GRG once export logistics and legalities have been finalised.
  • Sourcing material for GRG remains erratic and difficult to predict and continues to be of the prime strategic focus areas for management.

Kilimapesa Gold ('KPG'), Kenya

  • KPG produced 857 ounces of gold and gold equivalents (Q2 2018: 1,234 ounces) with 1,174 ounces of gold sold (Q2 2018: 1,498 ounces) on KPG's own account during the Quarter.
  • The Company took the decision not to put operations on care and maintenance at the end of November 2018 despite continuing losses due to progress on discussions regarding securing funding.
  • Plant throughput has been decreased further and costs reduced in order to try to minimise losses during these financing discussions. Grades from the underground mine as well as from purchased tailings were lower than planned during the Quarter.

Anumso Gold Project, ('Anumso') Ghana

  • The initial expenditure of US$1.5 million that was required to be made by 31 October 2018 has been verified and Ashanti has exercised the initial option to take up 51% of Goldplat's interest in the project. Ashanti has notified Goldplat that they will not elect the Subsequent Option for an additional 24% of the project and the parties will, according to the agreement, form a Joint Venture to manage the project going forward. Details regarding structure will be announced once decided and concluded.
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