Goldplat plc, the AIM listed gold producer, is pleased to announce its preliminary results for the year ended 30 June 2012.
Maiden dividend proposed of 0.6p per share totalling £1.01 million
52% increase in profit before tax to £5.24 million (2011: £3.43 million)
48% increase in operating profits to £4.53 million (2011: £3.05 million)
52% increase in net cash position of £4.57 million as at 30 June 2012 (2011: £3.01 million)
Market leaders in gold recovery in Africa - production from Ghana and South Africa totalled 31,354 ounces
Establishing a new gold recovery processing unit in Burkina Faso; registered a new trading company, Midas Gold SARL, and initial plant designs are underway
Achieved first gold pour at Kilimapesa Gold Mining Project in Kenya in January 2012
162% JORC compliant resource upgrade at Kilimapesa to 649,804 ounces at 2.44 g/t gold
Strong progress made to advance gold development portfolio in Ghana and Burkina Faso
Aim to delineate in excess of 1 million ounces of gold resources across Kenya, Ghana and Burkina Faso gold mining projects by the end of 2012
Goldplat CEO Russell Lamming said, "I am delighted to have joined Goldplat as CEO at such an exciting time in the Company's development. With record profits of £5.24 million before tax and gold production reaching 31,354 ounces, 2012 has been a truly exceptional year for Goldplat. In addition, the declaration of a maiden dividend represents a key milestone for the Company and highlights the considerable progress made by Goldplat to date.
"Looking ahead, I plan to build on the success of former CEO Demetri Manolis and continue to deliver on the Company's key strategy of building a highly profitable gold recovery and mining company in Africa. To this end, we will maintain growth and seek new opportunities for our highly profitable gold recovery businesses in Ghana and South Africa. Furthermore, I look forward to reporting on developments at our latest gold recovery venture in Burkina Faso, which we believe will be an excellent fit with our existing recovery operations.
"We remain committed to developing our gold mining projects in Kenya (Kilimapesa Gold), Ghana (Amunso) and Burkina Faso (Nyieme). We aim to increase production at our first gold mine, Kilimapesa Gold, towards the 10,000 ounce mark over the next two years and delineate in excess of 1 million ounces of resources across our whole development portfolio by the end of the year.
"With a robust treasury to support growth at our existing operations and fund future acquisitions, Goldplat looks set to hit its key targets and in turn realise value for shareholders."
This has been another excellent year for Goldplat, and our stated objective of building a cash generative, profitable, debt free gold producer focussed in Africa is being realised. We have reached multiple milestones during the period, including the first gold pour at the new Kilimapesa gold mine in Kenya, achieved record revenues from the gold recovery operations in Ghana and South Africa, and through defined exploration programmes, we are expecting to have in excess of a one million ounce gold resource in the near future. With revenues and margins continuing to improve, a net cash position of £4.573 million at the year end, and truly exciting projects being expanded and developed, we remain committed to building shareholder value and reflecting our strong operational performance in our market value, which we believe remains significantly below its fair level.
Our mining and exploration portfolio consists of the producing Kilimapesa Gold Mine in Kenya and the Anumso and Nyieme gold exploration and development projects in Ghana and Burkina Faso, which have near term resource upgrade and production potential.
While good progress is being made on these projects, our two gold recovery operations in South Africa and Ghana remain key to our profitability and cash generation, underpinning our share price. The success of these operations has enabled us to recommend a maiden dividend of 0.6p per share, totalling £1,030,000. To ensure increasing profits of the recovery business, we intend to establish a further operation in Burkina Faso, as described below. We have also taken important steps to expand our operations in South Africa, and in this context I should stress that we have been completely unaffected by the well publicised problems affecting mines in the Rustenburg area. Our record of no reportable accidents demonstrates the commitment of management and staff there, and remains a source of pride.
With a balanced portfolio of producing and exploration assets we expect to be able to finance the majority, if not all of our development work internally or through project finance, negating any need for further dilution on the corporate level, which we believe is important when considering our value against our peer group.
The Group reports a 53% increase in pre-tax profit for the twelve months to 30 June 2012 to £5,244,000 (2011: £3,428,000) and a 57% increase in after tax profit to £4,644,000 (2011: £2,956,000). Importantly, there was a contribution from three areas of the business and for the first time, the profits earned in Ghana exceeded those earned in South Africa. Basic earnings per share (pence) jumped to 2.77p against 2.12p for 2011, a 30% increase. These profit increases are even more impressive when taking account of the background of declining gold prices in the second half of the year, a trend which has now reversed with gold at near record levels.
At the period end, the Group retained a strong cash balance of £4.573 million, a 52% increase compared to £3.010 million last year.
As a result of this and the cash generative nature of the business, the Board is recommending the payment of a maiden dividend of 0.6p per share, totalling £1.01 million. If approved, this dividend is expected to be paid on 16 November 2012 to shareholders on the register on 26 October 2012. The ex-dividend date is 24 October 2012. In future we intend to pursue a progressive dividend policy based initially on the profits and cash generation from our gold recovery business.
Gold Recovery Operations
Our gold recovery operations in Ghana and South Africa continue to deliver and remain market leaders in precious metal recovery from by-products of the mining process such as woodchips, mill liners, fine carbon, slags, sludges and waste grease. They once again posted record results during the period producing a total of 31,354 ounces of gold (2011: 28,185 ounces) and 7,976 ounces of silver, with 17,762 ounces of gold attributed from Ghana and 13,592 ounces of gold from our South African operations.
These businesses have significant stockpiles of material for processing, continue to grow and remain important to the business as they provide investment capital to advance our other exploration and mining projects, which negates the need to turn to other funding options. We have therefore focussed on maintaining each plant's operational efficiency with profitability remaining a key focus.
Gold Recovery Ghana Limited ('GRG') - Ghana
This has been another record period for GRG which operates a processing plant in Tema, in a Free Zone Status area, which has favourable accompanying tax benefits. The plant, which provides an economic method for mines to dispose of waste materials while at the same time adhering to various environmental obligations, has excellent relations with the Ghanaian Government and we see it as a hub for further growth within the region.
This successful period not only saw a marked increase in revenue and profitability but also a rise in by-products received for processing through clients including Goldfield Limited, AngloGold Ashanti Limited and Golden Star Resources Limited. Due to the increased level of by-products purchased, a second Fluidised Bed Incinerator was purchased and installed to increase capacity. Furthermore we continue to build on our contract base and have secured agreements with additional mining companies regarding acquiring gold bearing by-products.
The toll processing operation that GRG has in place with Adamus Resources ('Adamus'), a gold mining company in Ghana, whereby some by-product materials purchased by GRG is processed off-site at Adamus' processing site, also continues to perform well and is being improved by sourcing materials closer to its plant to reduce the transport costs. A second receiving area at Adamus' plant has been constructed, which has enabled GRG to increase the volumes of by-products delivered each month. In addition, tailings at Goldplat's brownfield Anumso gold mining project, also in Ghana, are currently being investigated as a potential source of material for Adamus.
Goldplat Recovery (Pty) Ltd - South Africa ('Goldplat Recovery')
Goldplat's gold recovery operation in South Africa has continued to perform strongly and has maintained its dominant position in South Africa in its business sector. To maintain its leading position, improve the plant's operational efficiency and maintain profitability, we initiated an investment programme, which we are already seeing the benefits of. A Fluidised Bed Incinerator project for processing fine carbon has now been commissioned and enables Goldplat Recovery to compete for the higher margin fine carbon business and reduce the current stocks of fine carbon.
In terms of processing by-product stockpiles, the Company is currently sorting a significant volume of gold bearing material accumulated from screening material delivered, which we believe will increase gold recovery at the plant going forward and positively impact Goldplat Recovery's bottom line. Additionally the procurement of new gold bearing materials is on-going and stocks of raw material are stable. New clients with higher grade margin material have been identified.
We plan to reprocess selected tailings from Goldplat Recovery's own operation. The laboratory and bulk samples have shown that this operation will be successful and we are now purchasing the required equipment. Once commissioned, this project should have a significant positive impact on the costs of transport and procurement of raw materials for Goldplat Recovery and hence improve profitability for years to come. In addition, the Company has significant reserves of coarse material that has been screened out of purchased material prior to processing. We have commenced the crushing and screening of this material to provide a viable grade fine fraction that can be processed for gold recovery and the coarse fraction for sale.
Due diligence is continuing based on an agreement with Central Rand Gold, whereby Goldplat Recovery will arrange for the mining of two of the shallow shafts at the Crown East and CMR Bird Reef mines in the West Rand area near Johannesburg in South Africa on a 5% net smelter return basis. We continue to sample at CMR Bird Reef, however our priority is Crown East where we have established safe access for a travelling way. We have also established a small hoisting capacity for equipment required underground and sample hoisting. We are busy opening up and developing to gain access to the main reef and main reef leader reserves.
The intention is that Goldplat will employ contract miners to supply ore to the Benoni processing plant, and that the mining right will be retained by Central Rand Gold. Under these arrangements Goldplat will not incur the onerous potential liabilities inherent in underground mining in South Africa.
On a wider note, Rand Refinery, Goldplat Recovery's strategic partner, has expressed its intention to expand the cooperation between the two companies in South Africa, East and West Africa. The strategy is to utilise Goldplat's recovery operations to upgrade material to such a grade that it is viable for Rand Refinery to process the concentrated material in its works. Joint ventures will be considered if required.
Midas Gold SARL ('Midas') - Burkina Faso
Research undertaken by us in Burkina Faso has indicated that there are significant volumes of tailings at attractive grades available for processing. With this in mind, we plan to establish a new processing unit in Burkina Faso and have registered a new trading company, Midas Gold SARL, to operate it.
Midas is preparing a feasibility report of setting up the new processing unit and to this end initial designs have been drawn and equipment sourced. An appropriate site in the vicinity of Goldplat's brownfield Nyieme gold project also in Burkina Faso has also been selected, the coordinates of which are required to be included in the application for an operating licence.
Midas is preparing an Environmental Report which is the final document required in order to submit our mining licence application.
Importantly, the Company has good relations with the relevant Government institutions which would give approval to develop the plant, and it also has the support of the local Mayor for this new initiative.
Mining and Development
Kilimapesa Gold - Kenya
Progress at Kilimapesa Gold, our wholly owned high grade auriferous vein mine, located in the historically productive Migori Archaean Greenstone Belt in western Kenya continues at pace. Having received a 21 year Mining Lease in November 2011, the first gold project to be given a mining licence in the country since its independence in 1963, we completed the construction and commissioning of a processing facility including an elution plant to enable Kilimapesa to smelt and produce doré on site on an on-going basis.
Production of doré commenced in January 2012 and continues on a regular basis, with the gold sold to Rand Refinery Limited in South Africa. The plant is currently operating primarily on stoping tonnage sourced from the underground operations at Kilimapesa Hill, with grades and recoveries as forecast, averaging 5-6 g/t and +85% respectively. Self-financing ramp up at the mine remains on track, with annual production targeted at 10,000 ounces in the next two years. To aid this programme, a 500 Kva generator was bought to act as a power supply back-up in the case of grid power outages. The plant has been assembled, primarily in South Africa, for shipping to Kenya. The target date for commissioning the new plant was the beginning of 2013, but difficulties with shipping, clearance and onward transportation mean that commission may be slightly delayed.
Underground development is on-going, primarily focussed on extending the 1.2km strike length of the auriferous quartz veins over the Kilimapesa Hill. The current development programme at Kilimapesa Hill comprises three on-strike development ends on the auriferous quartz vein aimed at extending the exposure of vein to the east increasing the flexibility of the mining operation. The vein structures across Kilimapesa Gold have been historically worked in places and results indicate grade continuity.
Following extensive resource drilling, to expand the resource beyond the current underground development both along strike and at depth, we raised the total underground JORC-Compliant gold resource estimate to 8,292,613 tonnes at 2.44 g/t gold ('Au') for 649,804 ounces Au at a cut-off grade of 1 g/t Au. This represents a 402,320 ounces Au or 162% increase from previously published JORC-Compliant 3,133,613 tonnes at 2.46 g/t gold for 247,484 ounces Au announced in May 2012. Importantly the resource limits remain open and we aim to continue to extend the current known limits of mineralisation on strike and in depth.
From the 649,804 ounces Au a JORC-Compliant mineral resource, 531,631 ounces Au at an average grade of 2.43 g/t at a 1 g/t cut-off covers the 1.2km strike length over the Kilimapesa Hill target area. This is contained within three sub-parallel east-west trending quartz veins intruded into Archaean Banded Iron Formation and basaltic country rocks. The main mineralisation is contained within the quartz veins, which lie within a low grade halo in the bounding country rocks. Access to the orebody is via a northerly developed horizontal adit, that has intersected the east-west trending quartz veins on which reef drives and raises have been developed.
In particular, work has been carried out at the new Adit D, which lies 60 metres vertically below Adit B, and will contribute significantly to the increase of available ore at Kilimapesa Hill, as well as increasing mining tonnages as part of the ramp up to 10,000 ounces per annum. Underground development continues to progress well with an exposed and sampled combined strike length over the two main auriferous quartz veins of 425 metres. Selected rock chip sampling stretch values include 13.55 g/t over an average width of 1.27 metres across 54 metres of strike and 8.65 g/t over an average width of 1.50 metres over a strike of 57 metres.
At the Vim/Rutha and Red Ray target areas 21 holes for a total of 921 metres and 13 holes drilled for a total of 650 metres have been drilled at each target respectively. A maiden resource has been declared over the Red Ray area of 118,173 ounces Au at an average grade of 2.48 g/t at a cut-off of 1 g/t. A further drilling programme has been completed at Red Ray designed to extend the resource strike limits to 2.5km - assay results are pending with an update scheduled for Q3 2012.
Anumso Gold Exploration (previously the Banka Gold Project) - Ghana - 90% interest
In line with our strategy of developing brownfield sites, we continue to advance the 29 sq km Anumso Gold Exploration licence, located in the highly prospective Amansie East and Asante Akim South Districts of the Ashanti Region of the Republic of Ghana, 10km southwest of Newmont's 14 million ounces Akyem gold deposit. The current non-JORC compliant resource is 262,107 ounces of gold to a depth of 100 metres, however, we believe there is significant potential to upgrade and increase this with infill drilling and increase the depth of drilling to 250 metres.
Previous diamond core drilling programmes defined significant high grade gold intersections located within a broad low grade mineralised zone along a 4 km strike with surface outcropping. Results include best intersections of 0.8m at 13.2g/t gold and 1m at 11.30 g/t of gold and historical mine records suggest artisanal miners were exploiting a gold resource estimated to be at a grading of up to 26.9 g/t gold.
A 33 hole 6,125 metre drilling exploration programme commenced on 22 November 2011 aimed at converting and supplementing the existing gold resource to a JORC compliant status. The drilling programme is now complete with all the assay results due in October 2012. Importantly, the continuation of mineralised Tarkwaian conglomerates has been confirmed, underlining the prospectivity of the project. The final results will be collated and a suitable action plan communicated.
Nyieme Licence - Burkina Faso
The 246 sq km Nyieme project is located in the prospective Birimian Greenstone Belt in southern Burkina Faso, West Africa. A 3,100 metre drilling programme was undertaken in 2011, which defined a resource of 1,395,000 tonnes at 2.06g/t gold for 92,589 ounces. This focussed on the Nyieme Village high grade zone, which was extended at depth and to the north. Multiple additional anomalous zones were identified up to 15 metre thick. Additionally, four newly discovered mineralised zones were identified in the A1 zone, 1.5km south of the Nyieme Village Zone.
Goldplat is now constructing a work programme to target additional areas of economic potential. This will include drill testing the northerly extension of the Nyieme Village Zone, the gap between the Nyieme Village Zone and the A1 Zone, and the four zones at the A1 Zone, which remain open to the north and south. It also aims to drill test the depth extensions of the zones at A1 Zone, investigate the D Zone for a possible new zone and drill artisanal workings located 3 km to the south of the A1 Zone. Further exploration work will be conducted on the extension of considerable artisanal workings immediately south of the Nyieme Licence as well as other targets that were highlighted after the initial early 2011 soil sampling programme. In addition, a regional structural mapping and geophysical programme is being considered.
We are also in discussions with other licence holders within the Nyieme project vicinity regarding joint venture and consolidation opportunities to increase our geographic footprint in the country.
Goldplat is developing into a very exciting, robust gold company that is profitable, debt free and has a realistic growth trajectory which I believe will significantly enhance shareholder value. With revenue generated from three separate areas, I am confident that our growth will continue and we will build on our current value. If you evaluate us on a cash basis we are currently trading on a PE of approximately 6 which is a huge discount to our peers, and the payment of dividends distinguishes Goldplat further still from other companies in the junior mining sector. We have a strong asset base and are looking to reinforce our business through the enlargement of our gold recovery business and the Kilimapesa mine in Kenya, as well as by the definition of further ounces and the bringing into production of our extremely promising brownfield sites.
Once again our management and staff in all the countries where we operate deserve the thanks of the Board and shareholders for their dedicated and successful efforts on behalf of the Group.
Finally and by no means least, I would like to thank Demetri Manolis for his exceptional work in building Goldplat into the company it is today. He has achieved what he set out to do and has decided to hand over the reins to Russell Lamming, who brings with him, international finance and mining experience. Demetri will stay as a consultant to the Company and I look forward to working with him and Russell to ensure that the success and growth of Goldplat is maintained over the coming years.
For further information visit www.goldplat.com or contact:
|Russell Lamming, CEO||Goldplat plc||Tel: +27 (0) 11 423 1203|
|Ewan Leggat/Katy Birkin||Fairfax I.S. PLC||Tel: +44 (0) 20 7598 5368|
|Felicity Edwards/ Charlotte Heap||St Brides Media & Finance Ltd||Tel: +44 (0)20 7236 1177|
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2012
|Cost of sales||(20,178)||(15,239)|
|Results from operating activities||4,527||3,054|
|Net finance costs||11||717||(51)|
|Profit before tax||5,244||3,428|
|Profit for the year||4,644||2,956|
|Profit attributable to:|
|Owners of the Company||4,467||2,728|
|Profit for the year||4,644||2,956|
|Other comprehensive income|
|Other comprehensive loss for the year, net of tax||(1,625)||(128)|
|Total comprehensive income for the period||3,019||2,828|
|Total comprehensive income attributable to:|
|Owners of the Company||2,842||2,600|
|Total comprehensive income for the year||3,019||2,828|
|Earnings per share - continuing operations|
|Basic earnings per share (pence)||24||2.77||2.12|
|Diluted earnings per share (pence)||24||2.53||1.90|
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED 3O JUNE 2012
|Property, plant and equipment||14||4,112||3,903|
|Intangible assets||15||8,90 9||6,920|
|Proceeds from sale of shares in subsidiary||17||219||383|
|Trade and other receivables||21||5,863||6,584|
|Cash and cash equivalents||22||4,575||3,127|
|Equity attributable to owners of the Company||23,721||20,823|
|Obligations under finance leases||25||39||62|
|Deferred tax liabilities||28||418||457|
|Loans and borrowings||25||2||117|
|Obligations under finance leases||25||109||157|
|Trade and other payables||29||6,179||4,477|
|Total equity and liabilities||31,407||27,032|
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2012
|Attributable to equity holders of the Company|
|Exchange reserve |
|Balance at 1 July 2011||1,671||11,401||183||7,568||20,823||676||21,499|
|Total comprehensive income for the year|
|Total other comprehensive income||-||-||(1,625)||-||(1,625)||-||(1,625)|
|Total comprehensive income for the year||-||-||(1,625)||4,467||2,842||177||3,019|
|Transactions with owners of the Company recognised directly in equity|
|Contributions by and distributions to owners of the Company|
|Issue of ordinary shares||8||48||-||-||56||-||56|
|Total contributions by and distributions to owners of the Company||8||48||-||-||56||-||56|
|Changes in ownership interests in subsidiaries|
|Non-controlling interests in subsidiary dividend||-||-||-||-||-||(111)||(111)|
|Total transactions with owners of the Company||8||48||-||-||56||(111)||(55)|
|Balance at 30 June 2012||1,679||11,449||(1,442)||12,035||23,721||742||24,463|
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2012
|Cash flows from operating activities|
|Results from Operating Activities||4,527||3,054|
|Loss on sale of property, plant and equipment||-||8|
|Equity-settled share-based payment transactions||-||102|
|Reversal of gold inventory||201||-|
|Foreign exchange differences||(1,035)||-|
|- trade and other receivables||721||(4,718)|
|- trade and other payables||1,688||2,011|
|Cash generated from operating activities||5,418||777|
|Net cash from operating activities||5,483||16|
|Cash flows from investing activities|
|Proceeds from sale of property, plant and equipment||38||16|
|Acquisition of mining rights||(2,085)||(1,140)|
|Acquisition of property, plant and equipment||30.2||(1,164)||(680)|
|Net cash used in investing activities||(3,838)||(3,195)|
|Cash flows from financing activities|
|Proceeds from issue of share capital||56||5,179|
|Proceeds from sale of interest in subsidiary undertaking||-||27|
|Finance leases raised||-||119|
|Payment of finance lease liabilities||(138)||(107)|
|Net cash flows (used in)/ from financing activities||(82)||5,218|
|Net increase in cash and cash equivalents||1,563||2,039|
|Cash and cash equivalents at 1 July||3,010||1,018|
|Effect of exchange rate fluctuations on cash held||-||(47)|
|Cash and cash equivalents at 30 June||22||4,573||3,010|
The financial information contained in this announcement does not comprise full statutory accounts.
The financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the EU. The financial statements have been prepared on the historical cost basis.
The Board is recommending the payment of a maiden dividend of 0.6p per share, totalling £1.01 million. If approved, this dividend is expected to be paid on 16 November 2012 to shareholders on the register on 26 October 2012. The ex-dividend date is 24 October 2012.
The Annual General Meeting of the Company will be held at the Hilton Hotel, Seven Hills Road South, Cobham, Surrey KT11 1EW on Monday 29 October 2012 at 11.00 am.
The report and accounts for the year ended 30 June 2012 will be posted to shareholders 5 October 2012 and will be available on the Company's website at www.goldplat.com on this day.
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