Goldplat plc / Ticker: GDP / Index: AIM / Sector: Mining & Exploration
11 July 2016
Goldplat plc ('Goldplat' or 'the Company')
Goldplat wishes to announce that Rand Refinery (Pty) Limited ("Rand Refinery") has informed Goldplat Recovery (Pty) Limited ("GPL"), a 74 per cent owned subsidiary of the Company, that it disputes an amount due to GPL in relation to a binding Memorandum of Understanding entered into between GPL and Rand Refinery for GPL to process a batch of silver sulphide material (the "Silver Contract"). GPL has concluded the toll-treatment as specified in the contract and has issued invoices, some of which Rand Refinery has not paid and are disputing. Further to legal advice, GPL issued a demand letter to Rand Refinery for unpaid invoices for approximately ZAR13.5 million (circa £628k based upon the average conversion rate for the year); Rand Refinery has denied the indebtedness. GPL will institute processes forthwith to resolve the issue and, on the basis of legal advice received, the Goldplat board is confident that GPL will recover the money owed to it in full. Goldplat will keep the market informed as to progress regarding the dispute with Rand Refinery over the Silver Contract.
In addition to the above, GPL has been notified that Rand Refinery will not be able to accept by-product materials for treatment in their smelter during the month of August, for operational reasons. As previous issues with the Rand Refinery smelter have placed the Group's companies in very difficult positions operationally, financially and with regards to their relationships with their clients, Goldplat has taken strategic steps to mitigate what the Company referred to as "single refiner risk". Goldplat is pleased to report that alternate plans are in place to treat the bulk of the Group's products. Whilst this will have timing and cost implications, the Directors do not expect the use of alternative refiners to have a significant impact on its business.
The Group had a very active month of June, with its South African operations performing ahead of expectations. In light of the strong end to the financial year, marked exchange rate movements, which have worked in the Company's favour, and lack of certainty as to the recoverability and consequential accounting treatment of the disputed debt, the Company is not yet in a position to advise whether its annual results for the year ended 30 June 2016 will be in line with market expectations. However, Goldplat is currently reviewing the possible financial impact of these matters, and will announce as soon as possible any material variation to market expectations of its results for the year ended 30 June 2016.
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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 Heap / Susie Geliher St Brides Partners Ltd Tel: +44 (0) 20 7236 1177