Strategic Review and Trading Update
Goldplat plc, the AIM listed gold producer in Africa, announces an update on its strategic review undertaken by new CEO, Russell Lamming, which is focussed on identifying and realigning Goldplat's business model to primarily concentrate on its strong cash generating capabilities of its gold recovery operations in South Africa and Ghana and the growth potential of this business across the continent.
Accordingly, in order to eliminate losses caused by continued operational constraints (see RNS announcements dated 10 January 2013 and 4 March 2013) and the current uncertain gold price environment, the Company has put the Kilimapesa Gold Mine in Kenya ('KGM') on a care and maintenance programme until the project economics can justify the reopening of the mine. KGM has retrenched a further 50 employees and is now maintaining the mining operation on a skeleton staff. The processing plant will continue to process stockpiles of ore at the plant to cover the costs of the care and maintenance programme.
In terms of the Company's gold recovery operations, which recover gold from waste products of the gold mining process, Goldplat has also completed a review of Gold Recovery Ghana ('GRG'), its Ghanaian operation in Tema. Following this process the Company is looking to re-focus its recovery model to replicate its successful South African operation, which secures waste-products predominantly from blue chip mining customers. Accordingly, due to the continued margin pressures sustained primarily from purchasing materials from artisanal and small scale miners, the Company has stopped procurement of material for GRG's Carbon in Leach ('CIL') plant and is in the process of closing this section down and will remain so until material that meets the Company's margin criteria is sourced on a sustainable basis. Notwithstanding the closure of the Tema CIL plant, GRG continues to procure material to supply the Nzema mine in Ghana as per its tolling agreement that processes tailings off site with Endeavour Resources. On a wider level, the incinerator section, which processes fine carbon from the major gold producers, is operating well notwithstanding the refractory failure in one of the fluidised bed incinerators (see RNS announcement dated 1 May 2013), which is currently being re-commissioned. As a result of the matters set out above and the continued low gold price the Board advises that EBITDA for FY2013 is likely to be materially lower than market expectations.
The Company's South African gold recovery operation continues to produce strong cashflows with particular emphasis on fine carbon processing which has expanded significantly over the past six months with new supply contracts recently signed with major South African gold producers. New capital projects are also underway to continue increasing gold recovery production including the recent commissioning (March 2013) of an additional tailings retreatment CIL plant, which will help process five years of tailings on site; and the purchase of a second rotary kiln which is still on target to be commissioned in July 2013 and is expected to increase the processing of high grade wood chips currently estimated at seven years.
Goldplat's CEO Russell Lamming said, "The strategic review launched when I took over the role of CEO in September 2012, is focussed on creating long-term sustainable value for shareholders while continuing to generate cash. It is always disappointing to suspend any operation but it is of paramount importance that we make sure that all our operations are profitable and do not represent a drain on the resources of the rest of the Company. With regards to Kilimapesa, we will continue to assess the viability of the operation and engage with all the stakeholders including the local community and the Kenyan government to map the way forward. In Ghana, GRG will look for alternative sources of CIL material that meet our margin criteria and continue discussions with the gold majors to build the traditional recovery business in west Africa."
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For further information visit www.goldplat.com or contact:
|Russell Lamming, CEO||Goldplat plc||Tel: +44 (0) 781 0870 587|
|Ewan Leggat/Katy Birkin||SP Angel Corporate Finance LLP||Tel: +44 (0) 20 3463 2260|
|Felicity Edwards/ Charlotte Heap||St Brides Media & Finance Ltd||Tel: +44 (0)20 7236 1177|
Goldplat plc, is an AIM-listed profitable, debt free gold producer and mine development company focused in Africa, which has a strong cash position of GBP1.95 million as at 31 Dec 2012. 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 2012 these operations produced circa 31,354 ounces of gold. Goldplat also has a gold mining and exploration development portfolio in Kenya, Ghana and Burkina Faso.
Goldplat is a profitable, African gold recovery services company . . .More info...
Goldplat has two profitable gold recovery businesses in South Africa and Ghana . . .More info...
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