REG - Goldplat plc - 2nd Quarter Operating Results

GoldplatAnnouncement

07/02/2024 09:30

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RNS Number : 3328C  Goldplat plc  07 February 2024

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

7 February 2024

Goldplat plc

('Goldplat' or the 'Company')

2(nd) Quarter Operating Results update for period ended 31 December 2023

Goldplat Plc, (AIM:GDP) 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 the 2(nd) quarter ended 31 December 2023
("Q2"), of the current financial year.

Ghana experienced an exceptional Q2, achieving an operating profit of
GBP1,820,000 (GBP1,026,000  Q2 2023), driven by strong supplies during the
first half of the current financial year and the sale of inventory that built
up as a result of our inability to export whilst our export license was
finalised during the 2(nd) half of the previous financial period.

South Africa's Q2 performance continues to be impacted by electricity cuts and
a reduction in by-product supply from current mining operations. As a result
of delays experienced at the smelter in Europe in the previous financial year,
South Africa's Q2 results were further materially impacted as an unusually
large quantity of material for processing through gravity circuits was held in
stock at the end of June 2023; this material contained a lower percentage of
gold than estimated. While the percentage of contained gold varies from month
to month, the unusually large quantity of material held in inventory means
that there was a disproportionate effect on Q2 with a significantly lower
quantity of gold than expected recovered from our gravity circuits. This
resulted in an operating loss of GBP315,000 for the quarter (GBP356,000
operating profit Q2 2023).

Even with the losses in South Africa, the combined operating profit for both
operations for Q2 was GBP1,505,000 (GBP1,382,000 Q2 2023) and for half year
("H1") was GBP3,368,000 (excluding listing and head office costs, interest and
foreign exchange movements), compared to the combined operating profit of
GBP2,813,000 for H1 2023.

The following events have contributed to the Q2 operating results:

Gold Recovery Ghana

·      As indicated above, Ghana received the benefit during Q2 from
good supply of material during H1, with consignments treated from Ghana, Côte
d'Ivoire and South America. Our focus remains on building on the momentum in
South America and Côte d'Ivoire and opening other jurisdictions in West
Africa.

 

·      Towards the end of Q2 we started to commission the lower grade
milling, gravity and flotation circuit which will assist in extracting value
from large volumes of lower grade fine carbon material received in Ghana.

Goldplat Recovery (Pty) Ltd

·      The South African operation lost a total of 7 operating days, 7%
of the total days available in the quarter, compared with the circa 23% lost
in the previous 3 quarters, due to electricity cuts and infrastructure related
issues. The reduced impact of electricity cuts continued in the first month of
Q3 ("January 2024") but the risk of this increasing to the same levels
experienced in the previous 3 quarters remains.

 

·      Due to the continued uncertainty of electricity supply in the
medium term and as announced on 31 May 2023, we decided to invest in diesel
generators which will be able to sustain operations in South Africa during
electricity cuts. During January, it became apparent that due to
miscommunication between the supplier of the generators and the manufacturer,
the shipping of the generators has been delayed and the project will only be
completed in Q4 of the current financial year.

 

·      Apart from the circa GBP600,000 shortfalls experienced on the
gravities, we continued to see a reduction in by-products received from
current mining operations due to changes in their production profile. The
focus therefore remains to increase our by-product market share in South
Africa and to gain access to neighbouring countries.

 

·      The visibility of supply of low-grade soils for our milling
circuits remains strong, with more than 18 months of material for processing
on site and more under contract.

 

·      With lower recoveries from low grade soils (referring to gravity
concentrates) and reduction in by-products received and increases in cost, the
various cost elements in South Africa will be reviewed and revised in the
short term to conserve cash.

 

·      With the new TSF being commissioned, we are focussing on work
required to begin the processing of our old tailings facility which has a JORC
Resource of 81,959 ounces (Table 1), at a DRD Gold process facility.

 

·      The processing of our old TSF remains dependent on:

 

o  The approval of the water use license over certain areas for the
installation of a pipeline to the DRD Gold process facility; The application
process was subject to completion of engineering designs which were finalised
in December 2023. However, areas were identified where the pipeline route will
require to be changed from the current servitude. These changes have resulted
in changes in timelines, and we will keep the market updated on when we have
clarity of what the new timelines will be;

o  These changes may affect the way we process the TSF and how this affects
the returns we can generate. DRD Gold and Goldplat Recovery are currently in
the process of evaluating the different variables that will impact the
processing of the TSF, as well as their commercials impact; this process will
remain subject, inter alia, to the finalisation of the water use license.

 

·      We estimate that we will require a further GBP500,000 (not
including the investment of GBP750,000 to be spent on generators over the next
18 months), to be spent on repairing and maintaining current operations, on
completing the TSF and improving the environmental impacts of our current
operations. The company anticipates this to be funding from internally
generate cashflow.

Our cash balances in the group increased from Q1, with increased sales in
Ghana, and remains strong at GBP1,707,000 (GBP1,350,000 Q1 2024).

Werner Klingenberg, CEO of Goldplat commented: "This was a bitter-sweet
quarter with good results in Ghana alongside losses on estimated gold
receivable in South Africa. I'm confident that the team has implemented the
necessary controls to eliminate these losses going forward.

Ghana continues to benefit from engagements and marketing efforts over the
last 5 years and we aim to build on the momentum into Africa and South
America.

The requirements and approval of the water use license for installation of
pipeline to DRD Gold remain a major focus for the Group, whilst we continue to
strengthen our relationships, increase market share in a declining gold market
in South Africa and leverage our strength and capabilities through partnership
into other precious metals and commodities."

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

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

                                                  (CEO)
 Colin Aaronson / Samantha Harrison / Enzo Aliaj  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

 

 

 

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

 

100% attributable to the Company.

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, and it is not aware of any new information or data that
materially affects the estimates.

 

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.

 

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