Progress Report on Gold Recovery Operations

Overview

Goldplat plc, the AIM quoted gold producer in Africa, is pleased to provide an operations update for its two gold recovery businesses in South Africa and Ghana, which recover gold from by-products of the mining process, and an update regarding establishing a new gold recovery plant in Burkina Faso.
  • Gold recovery operations have performed well in H2 2012 - the Company expects to report an increase in operating profit compared to year ending 30 June 2011 (FY2011: £3,054,000)

  • South African gold recovery is performing strongly and in line with management's expectations:

    • A drive to improve the plant's operational efficiency and profitability has seen Goldplat Recovery acquire additional equipment

    • Procurement of new gold bearing materials is on-going and Goldplat Recovery's stocks of raw material are stable

  • Accessing a longer term project to reprocess tailings from the Company's Goldplat Recovery operation - potential to significantly impact profitability

  • Three month due diligence progressing well evaluating opportunity to recommence mining of Central Rand Gold's historical Crown East and CMR Bird Reef mine shafts

  • Ghana gold recovery operation is performing ahead of management's expectations

    • By-product contracts with Goldfield Limited, AngloGold Ashanti Limited and Golden Star Resources Limited continue to grow and generate significant revenues

    • Toll processing operation in place with Adamus Resources continuing to perform well

  • Establishing a new processing unit in Burkina Faso and has registered a new trading company, Midas Gold SARL

  • Preparing a feasibility report of setting up a new processing unit - initial designs have been drawn and equipment sourced

  • Total gold production for FY 2012 expected to exceed FY 2011 gold production of 28,185 oz

Goldplat CEO Demetri Manolis said, "Our gold recovery businesses in South Africa and Ghana continue to perform well and in conjunction with our first brownfield mining operation, Kilimapesa Gold in Kenya, moving into production in January 2012 we expect to exceed FY 2011 gold production of 28,285 ounces for FY 2012.

"With targeted profit increases for FY 2012, we remain committed to implementing our growth strategy focussed on building a mid-tier gold mining and gold recovery company in Africa. In order to fully utilise our vast knowledge base and take advantage of our leading position in the gold recovery sector, we have investigated options to establish new recovery plants in other countries. In line with this, we are establishing a plant in Burkina Faso, which we believe has significant volumes of high grade tailings available for processing. The initial plant design and equipment sourcing is underway and we look forward to providing an update on these developments with a view to commissioning a plant in the future.

"In turn, we also have two gold mining development projects in Ghana and Burkina Faso which are undergoing resource drilling programmes with a view to moving into gold production in the future. With these developments in mind, we look forward to reporting on our full year results later in the year."

Goldplat Recovery (Pty) Ltd - South Africa ('Goldplat Recovery')

Goldplat's gold recovery operation in South Africa has continued to perform strongly in the second half of the financial year (H1 2012 gold production totalled 7,040 ounces) and the plant is on target to hit management profit forecasts for the full year ending 30 June 2012.

A drive to improve the plant's operational efficiency and profitability has seen Goldplat Recovery acquire additional equipment. A Fluidised Bed Incinerator project for processing fine carbon has now been commissioned and is performing well. This 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 over the years from screening material delivered, which it believes 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 Goldplat Recovery's stocks of raw material are stable. New clients with higher grade margin material have been identified and negotiations are ongoing.

A longer term project is also being investigated whereby Goldplat plans to reprocess selected tailings from Goldplat Recovery's own operation. A feasibility study is in progress with laboratory and bulk samples having been processed successfully. 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 many years to come. The Company has significant reserves of coarse material that has been screened out of purchased material prior to processing. Goldplat is investigating 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.

An agreement has also been signed with Central Rand Gold, another mid-tier gold producer, whereby Goldplat Recovery will mine two of its 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. A three month due diligence period is underway and progressing well. At the CMR Bird Reef mine shaft sampling is underway and initial results look promising and at the Crown East mine the Company has gained access to the shaft and will start evaluation shortly. Goldplat will update on further developments in due course.

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.

Ghana: Gold Recovery Ghana Limited ('GRG')

GRG's gold recovery operation, which enjoys a tax free status until 2016, continues to perform above expectations in the second half of the financial year, and it is anticipated profits will exceed management for the full year to 30 June 2012. Gold production for 1H 2012 totalled 8,364 ounces.

As previously reported, GRG has by-product contracts with Goldfield Limited, AngloGold Ashanti Limited and Golden Star Resources Limited which continue to generate significant revenues for the Company. The by-products purchased through these contracts have increased so significantly over the past year that GRG has ordered a second Fluidised Bed Incinerator to increase capacity. The equipment has arrived in Tema and assembly has commenced.

The toll processing operation 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, is performing 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.

Additionally, negotiations regarding the procurement of further by-products from gold mines in Mali are still ongoing and are advancing well. The Company will update shareholders on this progress in due course.

Burkina Faso: Midas Gold SARL ('Midas')

Research undertaken by Goldplat in Burkina Faso has indicated that there are significant volumes of tailings at attractive grades available for processing. With this in mind, the Company has decided to establish a new processing unit in Burkina Faso and has registered a new trading company, Midas Gold SARL, to operate it.

Midas is currently 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.

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.

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For further information visit www.goldplat.com or contact:

Demetri Manolis, CEOGoldplat plcTel: +27 (0) 11 423 1203
Ewan Leggat/Katy Birkin Fairfax I.S. PLC Tel: +44 (0) 20 7598 5368
Felicity EdwardsSt Brides Media & Finance LtdTel: +44 (0)20 7236 1177

Notes:

Goldplat plc, which has a market cap of circa £20 million, is an AIM-listed profitable, debt free gold producer and mine development company focussed in Africa, which has a strong cash position of in excess of £4.59 million as at 31 December 2011. The Company has a solid portfolio of assets including two gold recovery operations in South Africa and Ghana, which recover precious metal from by-products of the mining process such as woodchips, fine carbon and waste grease. For the FY 2011 these operations produced circa 28,000 ounces of gold. Goldplat also has a producing gold mine in Kenya and two brownfield gold development projects in Ghana and Burkina Faso with near term resource upgrade potential from which it aims to delineate in excess of 1 million ounces of resources by H1 2012. In line with this, the Company has implemented defined exploration and development programmes across each of its projects with a view to developing multiple profitable mining operations in the near to medium term.