Goldplat plc / Ticker: GDP / Index: AIM / Sector: Mining & Exploration
17 May 2021
Goldplat plc ('Goldplat' or 'the Company')
Quarterly Update - Update on the nine months ended 31 March 2021
Goldplat plc, the AIM listed gold producer, with international gold recovery operations located in South Africa and Ghana, is pleased to announce an operational update for the nine months ended 31 March 2021.
The recovery operations achieved a combined operating profit for the nine months ended 31 March 2021 of £4,220,000 (31 March 2020: £3,802,000) and a combined operating profit in the 3rd Quarter of £1,165,000 (3rd Quarter - 2020: £1,053,000).
The Ghana operations continue to perform well as a result of steady supply of material and achieved an operating profit for the 3rd Quarter of £687,000 (3rd Quarter - 2020: £210,000 ). The South African operation achieved an operating profit for the 3rd Quarter of £575,000 (3rd Quarter - 2020: £843,000).
The following events have contributed to the 3rd Quarter's operating results -
There was continued good supply of material from regular clients during the period, which included two large batches from different clients.
Our engagement with mine management and government officials on different levels has continued, with the aim of increasing our footprint to ensure ongoing and regular supply.
Historically Ghana has benefitted from one-off stockpiled material on an ad-hoc basis, and although such opportunities still exist, our objective is to have a steady supply to our plant in Tema from the by-products produced by clients from a larger geographical area.
We are still engaging with the relevant authorities in Ghana on re-commencing the processing and tolling of tailings material.
The decrease in operating profit against the prior 3rd quarter was due to increases in the cost per ton of material acquired for our low-grade circuit. Although initial gold recoveries from some of this material was high, the overall recoveries were lower than expected which impacted negatively on our overall profitability.
During the 3rd quarter we increased the available tonnage of low-grade material by a further 4 months to 34 months, of which 10 months have been secured offsite. A decision has been made subsequent to quarter end to focus the sourcing team's efforts on higher margin material, if and where available.
The volume and the gold grade of the by-products received from our clients during the quarter was lower resulting in an 18% reduction in gold produced from by-products against same period of the previous year.
Operating profitability, year on year, continue to be impacted by higher electricity prices and increased water usage from the local municipality due to poor water quality from one of our other water sources.
Our margins were further impacted by a 10% decrease in the gold price in South African Rand from the start of the 3rd quarter.
The commissioning phase of the equipment installed to remove carbonaceous material pre-milling took longer than anticipated and the equipment has only been fully operational since May 2021.
Engagement with the authorities with regard to the new tailings storage facility (TSF) is encouraging and we still expect to receive approval by July. Some of the pre-construction work has commenced and the new TSF should be completed at a cost of GBP700,000 before the end of the current calendar year.
The completion of the construction of the new TSF is a prerequisite for the reprocessing of the current TSF, the others being a decision on the processing facility and the final deposition site.
We have identified what we believe to be the best available options for both the processing facility and the deposition site and we are in discussions to start the approval process with the relevant parties.
The cash and cash equivalents on hand on 15 May 2021 in the Group was £2,900,000 and the loan balance outstanding was £740,000.
With the sale of Kilimapesa during the 3rd quarter, we are continuing to review the current group structure and evaluating the options available to us to distribute future value created in the recovery operations back to shareholders.
Mayflower Capital Investments Pty Limited ("Mayflower"), Papillon Holdings plc (LSE: PPHP) ("Papillon") and its advisors continue to engage with the FCA with respect to obtaining the final approval for the Prospectus and with its brokers in the UK and Germany to finalise the financing commitments from investors. As announced on 26 April 2021, in the event that Papillon is not re-admitted to trading on the LSE by 16 July 2021, the full initial consideration of USD1,500,000 will become payable in cash and will attract interest of 4% with effect from 1 January 2021.
Werner Klingenberg, CEO of Goldplat commented: "I am pleased to report that with our two profitable recovery operations, in South Africa and Ghana, we are getting closer to our strategic initiatives of building long term visibility of earnings and being in a position to return value to shareholders through dividends."