Goldplat plc / Ticker: GDP / Index: AIM / Sector: Mining & Exploration
27 October 2016
Goldplat plc ('Goldplat' or 'the Company')
Goldplat plc, the AIM quoted African gold producer, with two market-leading gold recovery businesses in South Africa and Ghana and primary gold mining interests, including the Kilimapesa Gold Project in Kenya, is pleased to announce an operations update for the three months ended 30 September 2016 (the 'Quarter').
Production for the Quarter
Overall production of 9,129 ounces of gold and gold equivalents was achieved during the Quarter, alongside improvements in operating profitability at the recovery operations and the continued reduction in losses made at Kilimapesa. Good progress was made on all areas of strategic focus including the sourcing of by-product material for processing at the recovery operations, the identification of new global geographies from which to import material for processing, and the installation of the new plant at Kilimapesa designed to bring the operation to profitability during FY2017.
Goldplat Recovery Pty Limited ('GPL') - South Africa
- During the Quarter GPL produced an operational profit of approximately GBP769k on production of 5,418 ounces of gold and gold equivalents with 4,280 ounces of gold sold for own account and 1,179 ounces transferred to clients.
- With all major capital projects being successfully completed during the previous financial year, capital expenditure during the Quarter was reduced to sustaining CAPEX only. Capital expenditure to maintain operations will continue in Q2 FY2017 with focus on the cyclone sections of the rotary kiln and the upgrade of the high grade mill section.
- The independent investigation concerning the dispute with Rand Refinery regarding the silver sulphide toll recovery project is still in process but has been separated from the day-to-day operations between the two companies.
- Notwithstanding the dispute with Rand Refinery, Goldplat continues to deliver concentrates to Rand Refinery, which has improved its turnaround time significantly. The Company also continues to deliver concentrates to Aurubis in Germany, in line with its strategic decision to mitigate single refiner risk.
- GPL has increased its stockpile of raw material inventory, which is the feedstock for the carbon-in-leach ('CIL') circuits, as a result of the increased efforts on strategic sourcing.
- Test work is undertaken by a local university to maximise recoveries of the Company's Tailings Storage Facility (JORC Compliant resource of 82,000oz of gold) has been completed. Evaluation of operational variables of the pre-treatment stage is now underway with test work expected to be finalised at the end of Q2 FY2017.
Gold Recovery Ghana ('GRG')
- GRG produced an operational profit of approximately GBP305k from the production of 3,088 ounces of gold and gold equivalents, with 1,349 ounces of gold being sold for own account during the Quarter.
- The focus at GRG remains on the sourcing of material from existing and new clients. The Company's marketing efforts in South America is gaining traction and Goldplat remains confident that it can develop GRG as a hub to service clients internationally. In line with this strategy, GRG remains committed to installing an elution column and associated ancillary equipment, which will improve GRG's competitive advantage and satisfy the Ghanaian Government's requirement to produce bullion for export.
- Work to improve incinerator controls and efficiency is underway and modifications include the installation of a drier and scrubber.
- The new shot blast facility is operating well, an initial trial batch of liners from a client in South America has been processed profitably and a second batch has been shipped.
- The removal of material from the on-site tailings dump to a land-fill site began during the Quarter. This will reduce the rehabilitation liabilities and free up significant space for the further expansion of the operation. The cost of removing the tailings will be more cost effective than rehabilitation the dump in situ.
- GRG has applied for the renewal of its gold licence, with a new 3-year licence expected during Q2 FY2017. GRG has been operating under a temporary licence during the Quarter. Documentation for the renewal of the Environmental Protection Agency permit should be ready for submission during Q2 FY2017.
Kilimapesa Gold ('KPG')
- KPG suffered an operating loss of approximately GBP100k on production of 623 ounces of gold and gold equivalents, with 574 ounces of gold sold for own account during the Quarter.
- The erection phase of the new processing plant is progressing well. It is expected that the mine will be able to start the milling section by the end of December 2016 and in so doing increase the output in ounces as planned. The plant expansion is expected to be fully completed in February 2017 when the redesigned crushing section will be commissioned. The mill will be fed by a temporary structure and mechanical loading during the interim period.
- Lower grade ore stockpiled as a result of the current capacity constraint has increased substantially and further material from surface sources have been added. KPG will process this stockpile in conjunction with run of mine ore.
- Development at Adit D has reached the 3rd vein and there are now 12 development ends available for further development. The acquisition of an underground core drill will improve not only the development progress but also the grade and reserve controls going forward. The new sampling and mapping programme continues. A mechanical loader has been acquired and will be tested during Q2 FY2017. Management believes the development rate will increase significantly with this new equipment.
- At the Teng-Teng exploration project, the second outlet has holed to surface and facilities for material handling through this outlet are being installed to facilitate ongoing bulk sampling purposes.
- A permit has been granted to purchase and transport tailings from Migori county, where KPG has identified significant quantities of good quality surface material. Material from this community initiative will also be added to stockpiled ore.
- Goldplat's intention is to run the existing plant as long as the tailings facility can accommodate material. The current tailings facility capacity has been increased to provide for a further 6 months' deposition and work has begun on the construction of the new tailings facility adjacent to the new plant. The new facility is scheduled to be ready to receive tailings from the new plant when it starts up.
Anumso Gold Project
- An earn-in option agreement with Ashanti Gold Corp over the Anumso project in Ghana was signed and announced during the Quarter. Ashanti has begun on-site work as part of their initial six-month due diligence of the Anumso earn-in option agreement.
International marketing and sourcing
- During the Quarter good progress was made in the global sourcing of materials for processing in Ghana and in South Africa as appropriate.
- A team has been designated to manage the international sourcing function, a sourcing specialist has been transferred from GRG to Brazil, and contracts have been entered into with a South American partner to facilitate the sourcing strategy.
- An initial trial batch of mill liners was shipped to, and processed profitably at, GRG and during the Quarter a further batch of mill liners as well as a batch of woodchips mixed with fine carbon have been shipped to GRG.
- Three contracts with producers in various countries in South America have reached advanced stages of completion and are expected to be concluded during Q2 FY2017.
Gerard Kisbey-Green, CEO of Goldplat plc, commented:
"This was a good production and financial quarter in what is typically a difficult period for Goldplat. I am very pleased with the progress made on all areas of strategic focus as we continue to improve our operational efficiencies, increase processing capacity and ultimately build our profitability. Particularly satisfying is the progress that is being made in the diversification of sourcing material for processing from South America, as well as the on-going installation of the new plant at Kilimapesa in Kenya. We look forward to continuing to keep shareholders updated on our operational progress."
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For further information visit www.goldplat.com, follow on Twitter @GoldPlatPlc or contact:
Gerard Kisbey-Green CEO Goldplat plc Tel: +27 (71) 8915775
Colin Aaronson / Jen Clarke / Daniel Bush Grant Thornton UK LLP Tel: +44 (0) 20 7383 5100
Andrew Raca / Justin McKeegan VSA Capital Limited (Broker) Tel: +44 (0) 20 3005 5000
Charlotte Page / Susie Geliher St Brides Partners Ltd Tel: +44 (0) 20 7236 1177