Trading and Operational Update

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

30 July 2018

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

Trading and Operational Update

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

Trading update

Goldplat is pleased to announce that consolidated profit before tax for the Company is expected to be in line with market expectations for FY 2018, notwithstanding the fact that Kilimapesa Gold Limited ('KPG') had a poor final quarter financially which is expected to result in a similar loss to that of FY 2017 at the mine. The Company expects to publish its annual financial results in September 2018.

As disclosed in the announcement made on 21 May 2018, Kilimapesa Plant 1 was shut down during Q4 of the financial year. Current operational and financial indicators show that Kilimapesa is now operating at close to breakeven at an operational level. However, substantial losses were incurred during April and May 2018 due to operational and processing issues. The Board of Goldplat has approved a process to seek an investment partner for KPG so as to enable existing shareholders to realise value from the operation without having to invest any more capital. Although discussions in this regard have begun with a number of interested parties, the focus remains on getting Kilimapesa to produce profitably in the short term. 

Production for the year ended 30 June 2018

  • 35,431 gold equivalent ounces, representing a 17% decrease over the previous year, were produced during FY 2018 (FY 2017: 42,857 ounces), albeit at higher margins. Production at both Goldplat Recovery (Pty) Ltd ('GPL') and Gold Recovery Ghana ('GRG') were lower whereas production at Kilimapesa increased by roughly 50% when compared to FY 2017
  • 39,400 gold equivalent ounces were sold and transferred during FY 2018 (FY 2017: 40,285 ounces). The level of gold sold and transferred during FY 2017 was higher than production for the period primarily to due to sales of stock carried over from the previous year.

Production for the Quarter

Overall production of 8,219 ounces of gold and gold equivalents were achieved during the Quarter as shown in the operations overview below:

Goldplat Plc Consolidated 4th Qtr ending 4th Qtr ending Year ending Year ending Year ending Year ending
Jun-18 Jun-18 Jun-18 Jun-18 Jun-17 Jun-17
Equivalent Gold Equivalent Gold Equivalent Gold Equivalent Gold Equivalent Gold Equivalent Gold
kg Oz kg Oz kg oz
Gold Equivalent Production
Goldplat Recovery 158 5,066 733 23,567 915 29,418
Gold Recovery Ghana 61 1,963 210 6,752 312 10,031
Kilimapesa Gold 37 1,190 159 5,112 106 3,408
Total 256 8,219 1,102 35,431 1,333 42,857
Gold Equivalent Sold
Goldplat Recovery 180 5,787 655 21,059 702 22,570
Gold Recovery Ghana 93 2,978 249 8,010 259 8 327
Kilimapesa Gold 31 1,012 159 5,112 100 3,215
Total 304 9,777 1,063 34,181 1,061 34,112
Gold Equivalent Transferred
Goldplat Recovery 34 1,089 162 5,219 192 6,173
Total 34 1,089 162 5,219 192 6,173
Gold Equivalent Sold and Transferred
Goldplat Recovery 214 6,876 817 26,278 894 28,743
Gold Recovery Ghana 93 2,978 249 8,010 259 8,327
Kilimapesa Gold 31 1,012 159 5,112 100 3,215
Total 338 10,866 1,225 39,400 1,253 40,285

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

  • Gold production at GPL during the Quarter of 5,066 ounces of gold equivalent was in line with expectations for the operation in the absence of any one-off large contracts being sourced
  • Focus continues on optimising the recovery of gold from the Tailings Storage Facility ('TSF'), which contains a total of 81,959 ounces of gold, earmarked for future reprocessing. During the Quarter an alternative option for reprocessing and final deposition of the TSF was explored, yielding encouraging results, where the rate of reprocessing can be significantly increased. This alternative option will be further investigated in parallel with the existing plan of reprocessing the TSF onsite and final deposition into West Pit 3.
  • During the financial period, the Company procured 190,000 tonnes of raw material for the Carbon-In-Leach ('CIL') containing circa 16,000oz of gold. Continued metallurgical test work is being conducted to determine the optimal route through which to process this material in future.

Gold Recovery Ghana ('GRG'), Ghana

  • GRG produced 1,963 ounces of gold equivalent during the Quarter, which included a consignment from a long-standing client in East Africa.
  • The current stock of raw material available to process is low, but good progress was made during the Quarter on finalising contracts with newly identified sourcing opportunities in West Africa to replace the reduced volumes of material available in Ghana as a result of mines in-country reducing output in recent years.
  • GRG continues to receive small batches of material from numerous suppliers in South America and is currently investigating an opportunity to assist with a plant clean-up for one of these suppliers. 
  • The new elution plant is operational and achieving the designated operating targets.
  • The environmental clean-up project (Kyebi) remains on hold pending work being finalised by the Government appointed steering committee. During the Quarter, the pilot plant acquired for use at Kyebi was used on a trial basis to process tailings from the spiral plants at GRG.

Kilimapesa Gold ('KPG' or 'Kilimapesa'), Kenya

  • As announced on 21 May 2018, a decision was made to close Plant 1. This decision appears to have been successful and record production for Plant 2 was achieved during the months of May (444 oz) and June (445 oz), compared to production in April of 301 oz from both plants. Employees from Plant 1 were re-deployed to other sections of the mine to ensure that no jobs were lost.
  • However, 53% of losses suffered during FY 2018 were during the months of April and May. This was attributable to less feedstock being available for processing as a result of unseasonal rains which, particularly during April, affected KPG adversely, especially with both plants running. Most of the losses during this month were attributable to Plant 1 having lower economies of scale.
  • During May, KPG had cost overruns mainly related to the supply and importation of spares for the impact crushers. As a result of stoppages, approximately 10% of planned production tonnages was not achieved during both May and June. 
  • During the month of June, the mine produced close to break-even, reporting a small loss.
  • Full production for the year was 5,112 oz, versus the 5,800 oz initially planned and the 5,000 oz guidance indicated when the Plant 1 closure was announced.
  • Further measures are planned at Plant 2 to improve the overall recovery, including the addition of more oxygen in the CIL circuit and improving the overall mill grind. Should these interventions be successful and were three more CIL tanks be added to increase residence time, as envisaged in phase 3 of the plant expansion, profitability on a sustainable basis could be achieved.
  • Numerous visits by outside investors were made to Kilimapesa during the Quarter in line with the Goldplat Board's decision to initiate a process to find an investment partner. Good, albeit early-stage progress is being made in this regard.
  • Mine production has increased significantly from 86 tonnes per day in the first half of FY 2018 to 104 tonnes per day for the second half. In the first month of the new financial year, production from the mine has increased to 125 tonnes per day. The remainder of the 180 tonnes per day being milled is currently being sourced from low grade stockpiles and artisanal tailings.
  • The planned increase in production of ore from the mine to 180 tonnes per day will be facilitated by the purchase of a new compressor to cater for the planned increase in drilling and two extra Bob Cats to clean the development ends. This equipment arrived in Mombasa during the Quarter and is currently being cleared through customs.

Anumso Gold Project, Ghana ('Anumso')

  • During the Quarter, Ashanti Gold Corp ('Ashanti') continued the extensive soil sampling programme across Anumso to test the strike extent of the Banka conglomerate.
  • In addition, Adit sampling was undertaken to investigate mineralisation beneath the known surface anomalies
  • Ashanti's planned work for the next period includes the completion of assaying of soil and Adit samples as well as beginning a trenching programme ahead of the next drilling campaign.
  • As noted in the announcement of 16 January 2018, Ashanti have until 31 October 2018 to spend the agreed US$1.5 million and exercise their option over 51% of the Goldplat's interest in the Anumso project.

Gerard Kisbey-Green, CEO of Goldplat plc, commented:

"Whilst the financial results for the year are expected to be in line with market expectations, I do not believe this result is a fair reflection of the Company's performance during the first nine months and the hard work done by the team on all fronts. We continue to operate a strategic portfolio of producing gold assets and apart from the absence of a large contract from outside South Africa, we are pleased with the result of the GPL operation. During the final quarter of the financial year, the strong performance of this operation was arguably overshadowed by Kilimapesa and GRG, which is naturally disappointing, but work is already well underway to resolve these issues. The Board of Goldplat is committed to realising value at Kilimapesa in the best possible way for existing shareholders, with discussions with potential investment partners progressing in support of this. Furthermore, at GRG I am confident that the work being done in Ghana, wider West Africa and South America to source quality material for processing will have a positive impact on production and profitability during the current financial year. I look forward to sharing comprehensive results with the market in September 2018."

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