REG - Goldplat plc - 2nd Quarter operating results update

GoldplatAnnouncement

20/02/2023 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230220:nRST3615Qa&default-theme=true

RNS Number : 3615Q  Goldplat plc  20 February 2023

 

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

 

 

20 February 2023

 

 

Goldplat plc

('Goldplat', the 'Group' or 'the Company')

 

2nd Quarter operating results update

for the period ended 31 December 2022 ("Q2")

 

 

Goldplat, the AIM listed Mining Services Group, with international gold
recovery operations located in South Africa and Ghana, servicing the African
and South American Mining Industry, is pleased to announce an operational
update for Q2.

 

The two recovery operations continued to produce good combined operating
profit during Q2, albeit down 41% on a strong Q2 period during the previous
financial period, of £1,382,000 (Q2 2021: £2,356,000) (excluding listing and
head office costs and foreign exchange losses).

 

The Ghanaian operation continues to perform well as a result of the steady
supply of material and achieved an operating profit for Q2 of £1,026,000 (Q2
2021: £1,012,000), however the South African operations have been impacted
during the last two months of Q2 by electricity cuts by the electricity
provider in the country. Notwithstanding the electricity cuts, the South
African operation achieved an operating profit for Q2 of £356,000 (Q2 2021:
£1,344,000).

 

The electricity cuts we referred to in the quarterly update announced on 8
November 2022 have continued into Q3 and are expected to continue to some
extent at least until the end of calendar year 2023. We have been evaluating
our options to manage the situation. Generating our own electricity through
the use of diesel generators or renewable energy sources currently does not
prove to be feasible and we will instead focus on easing the bottlenecks
created as a result of the reduction in electricity supply and increase output
during periods of electricity availability through focussed management and
initial capital outlay of less than £50,000. We will also adjust processing
methods on some material to increase capacity through our plant to limit the
impact that this has on production through our incineration units.

 

Not all of our production circuits have been impacted to the same extent, with
our by-product's circuits having more capacity to deal with supply of
material. Regarding the by-products, we received a large supply of material
during December 2022, which has been processed during December 2022 and
January 2023 and we will see the sales of this material coming through during
Q3.

 

Goldplat processes an assortment of material throughout the Group from
different clients and on different contracts making use of a wide range of
plant and equipment. The Group has been delivering profitability for the last
12 quarters, which is in line with management's focus on ensuring sustainable
cashflow and profitability.

 

Whilst we cannot predict the level of electricity supply for the rest of the
year, should the electricity cuts in South Africa continue at the current
level, although we still expect to generate operating profits over Q3 and Q4,
we believe it is unlikely that  we will be able to meet market expectations
for the current financial year. We will keep the market updated with regard to
the impact of the electricity supply and on the progress of our business
generally.

 

The application for a pipeline to the DRD Gold premises is still being
evaluated by the authorities and although we have indicated before that it
will be by no later than June 2023, the timelines for when approval will be
received are not that clear and we will update the market once we have more
clarity.  The pipeline will provide Goldplat Recovery Limited with the
ability to process the existing Tailings Storage Facility ("TSF") which
contains a JORC resource of circa 82,000 ounces of gold (Table 1) at a DRD
Gold processing facility. The negotiations of the terms and conditions of
processing our existing TSF at a DRD Gold processing facility still need to be
finalised.

 

Goldplat has identified, and to an extent secured, material in ECOWAS ("The
Economic Community of West African States"); however, the export and
processing of these materials remains dependent on approval from government
officials. We continue our engagement with the governments and mines in the
ECOWAS to agree processes and controls on the export of gold bearing products
and remain encouraged by the value we have identified that we can offer in
these countries.

 

The majority of material processed in Ghana during Q2 was from clients inside
the country, however we secured a larger consignment out of South America
during December and we should see the returns from this during the last two
quarters of the current financial period.

 

We continue with our expansion into South America on a measured basis, and we
have identified a location and property which we are negotiating to procure
for less than £100,000.

 

The construction of the new TSF started in Q2 (to 31 December 2022) and while
we aim to have this completed by the end of Q4 (to 30 June 2023), some delays
may result due to the rainy season in South Africa and additional preparation
work required.

 

During the period we made a strategic investment of £150,000 to obtain the
usage of a small spiral plant for our gold operations in South Africa and
acquire a 15% shareholding in a fine coal recovery technology company.
Goldplat has an option to invest an additional £1.5m, which will increase our
shareholding in that business to above 50%. This investment would be used to
operationalize the technology through the construction of a fine coal washing
plant in Mpumalanga, South Africa. Management is still evaluating this option
which would provide us diversification in our recovery operations into a
different commodity, namely coal, of which significant resources are
available in South Africa, with opportunities not just for processing but also
for environmental rehabilitation.

 

During Q2 the Group incurred capital cost of £253,000 and we are estimating
that we will require a further £1,500,000 during the next 12 to 18 months to
be spent on repairing and maintaining current operations, and on improved
lining of the new TSF and improving the environmental impacts of our current
processes.

 

Cash balances in the group remained strong at £2,920,000 at the end of Q2 (Q2
2021: £1,452,000). We still have significant balances invested in inventory
and debtors with main exposures to smelters in Europe and South Africa.

 

Werner Klingenberg, CEO of Goldplat commented: "I am pleased to announce
continued profitability in the Group, particularly considering some of the
challenges we are facing. Our solutions have always been flexible and unique
and I believe that the team will find a way to handle the impact of
electricity cuts in South Africa, whilst reducing their impact on our results.

 

We still see opportunity for supply in West Africa and we continue to increase
our supplier base in South America, supporting further investment in the
region.

 

Our aim remains to increase visibility of earnings through, becoming a partner
to the mining industry, by maintaining and increasing our value offering to
clients, improving our environmental management and processes and expanding
our processes to increase the types of by-products and waste we can
beneficiate and also through identifying and securing previously mined
resources."

 

For further information visit www.goldplat.com, follow on Twitter @GoldPlatPlc
or contact:

 

 Werner Klingenberg                                 Goldplat plc                                     Tel: +27 (0) 82 051 1071

                                                    (CEO)

 Colin Aaronson / George Grainger / Samuel Littler  Grant Thornton UK LLP                            Tel: +44 (0) 20 7383 5100

                                                    (Nominated Adviser)
 James Bavister / Andrew de Andrade                 WH Ireland Limited                               Tel: +44 (0) 207 220 1666

                                                    (Broker)

 Tim Thompson / Mark Edwards / Fergus Mellon        Flagstaff Strategic and Investor Communications  Tel: +44 (0) 207 129 1474

                                                                                                     goldplat@flagstaffcomms.com

 

The information contained within this announcement is deemed to constitute
inside information as stipulated under the retained EU law version of the
Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK
law by virtue of the European Union (Withdrawal) Act 2018. The information is
disclosed in accordance with the Company's obligations under Article 17 of the
UK MAR. Upon the publication of this announcement, this inside information is
now considered to be in the public domain.

 

Table 1

Mineral Resource Estimate of the TSF, South Africa

 Total Resource
 Domain          Class      Tonnes (Mil)  Density  Au (g/t)  Au (Oz)  U(3)O(8) (g/t)   U(3)O(8) (lbs)   Ag (g/t)  Ag (Oz)
 TOTAL RESOURCE  Measured   0.87          1.32     1.82      50,907   61.41            117,754          4.85      135,573
                 Indicated  0.49          1.37     1.77      27,897   59.73            64,506           4.71      74,165
                 Inferred   0.07          1.30     1.4       3,154    71.40            11,016           2.82      6,356
 Grand Total                1.43          1.34     1.78      81,959   61.32            193,276          4.70      216,094

 

The Tailings Mineral Resource Estimate was announced in accordance with the
JORC Code (2012) in a press release on 29 January 2016. Mark Austin of Applied
Geology & Mining (Pty) Ltd was the Competent Person responsible for that
announcement. The Company confirms that all material assumptions and technical
parameters underpinning the Resource Estimate continue to apply and have not
materially changed.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTGPUCWPUPWGRB