REG - Goldplat plc - Audited Results for the Year Ended 30 June 2023
18/12/2023 07:00
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RNS Number : 0486X Goldplat plc 18 December 2023
Goldplat plc / Ticker: GDP / Index: AIM / Sector: Mining & Exploration
18 December 2023
Goldplat plc
('Goldplat', the 'Group' or 'the Company')
Audited Results for the year ended 30 June 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 its audited results for the year ended 30 June 2023.
The Company's annual report and accounts are available on the Company's
website at http://www.goldplat.com/downloads
(https://protect-za.mimecast.com/s/-fo7CxGjMnf1053s8AJgf?domain=goldplat.com)
and hard copies will be posted by 19 December 2023 to shareholders that
have elected to receive printed copies.
As announced on 4 December 2023, Resolution 1 to be put to shareholders at the
Annual General Meeting of the Company being held on 29 December 2023, to
receive the report of the Directors of the Company and the audited financial
statements of the Company for the year ended 30 June 2023, will be adjourned
in order to give shareholders the requisite notice. The date of the adjourned
meeting will be confirmed in due course.
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
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.
Chairman's Statement
Goldplat PLC's precious metals processing facilities continued to show
resilience by achieving creditable trading results during the 30 June 2023
year, during which it experienced some unique challenges.
Our portfolio of core assets consists of two gold recovery operations, in
South Africa and Ghana, with plans to extend operations to Brazil. These
operations recover gold and platinum group metals ('PGM') from by-products of
current and historical mining processing, thereby providing mines with an
environmentally friendly and cost-efficient way of removing waste material.
Looking at the trading results of Goldplat PLC ("the Company" or "Goldplat")
and its subsidiaries, together referred to as "the Group", profit for the year
remained strong at GBP3,068,000 (2022 - GBP3,963,000), resulting in a return
on invested capital (Profit after Taxation divided by Total Equity) of 17.8%
(2022 - 22.3%). Cash generation across the Group continued to be robust with
net cash flows from operating activities of GBP3,343,000 (2022 - GBP2,997,000)
and net year end cash of GBP2,781,000 (2022 - GBP3,895,000).
During the year the Group's operations have been impacted by:
· Increased electricity supply cuts in South Africa;
· Slow turnaround of debtors due to delays from a smelter in Europe;
and
· Delays in export of material out of Ghana during the last quarter due to
finalisation of the renewal of our Gold License.
The above matters have been mitigated after the financial year end through
utilising other smelters and the approval of the Gold License in Ghana. In
addition, we are in the process of installing back-up diesel generation power
in South Africa.
We remain focussed on long term visibility of earnings in the recovery
businesses by increasing visibility of resources through the strengthening of
partnership relationships and improved processing methods, whilst positioning
ourselves as a service group focussed on key elements of primary producers'
Environmental, Social and Governance (ESG) initiatives. Our key focus will
remain on extracting value from gold bearing by-products whilst we investigate
broadening the commodity spaces in which we operate and add value.
As indicated in the prior year, the Company will continue to return cash in
excess of operating and development requirements to shareholders. Due to the
challenges experienced during the year, resulting in significant working
capital requirements, the capital invested into a new tailings storage
facility ("TSF") in South Africa and future capital requirements to maintain
operations as well as processing of the old TSF, the Company did not
distribute any cash to shareholders during the year. We will continue to
evaluate this position and, when appropriate, will distribute cash through
either share repurchases or dividends, whichever the Board believes will add
the most value, to the shareholders.
Goldplat has a pivotal role to play in the circular economy that extends to
the extraction of minerals to re-processing of what would typically be dumped
as waste materials. It also extends to responsible mining and business
practices that underpin Goldplat as a sustainable partner for large mining
groups.
As referred to in the Strategic Report, the business has adopted certain
sustainability reporting principles in the current year including profiling
material matters through the application of double materiality and linking
these material issues to strategic responses and performance metrics.
As a starting point, we have conducted materiality assessments to identify
where our highest level of sustainability impact could be and in turn, linking
these matters to our strategic response, policies and performance management.
We are committed to creating measurable value for all our stakeholders towards
a just and socio-economic sustainable future.
Goldplat will continue developing its integrated sustainability strategy and
reporting practices. This process is ongoing, and the Board will continue to
monitor our obligations and make sure that we meet or exceed expectations as
we continue to create and preserve value for all our stakeholders.
During the year the Group strengthened its executive management team with the
appointment of a Chief Operating Officer (COO), Douglas Davidson, and Chief
Financial Officer (CFO), Brent Doster. The executive management team is well
positioned to execute the Company's strategy.
The Israel-Hamas and Russian-Ukraine conflict will continue to pose challenges
to global supply chains and whilst Goldplat has no activities directly
connected with Russia, Ukraine or the Middle East, the long-term effect of the
conflict on the Group remains uncertain.
We look forward to continuing and building on the successes of the past few
years and increasingly realising and growing the intrinsic value of Goldplat.
I wish to thank all Goldplat's employees, as well as my fellow directors, our
advisors and our shareholders for their efforts as we look forward to the
coming years with enthusiasm.
Gerard Kemp
Chairman
15 December 2023
CEO Report
Overview of operations
Goldplat is a mining services company, specialising in the recovery of gold
and other precious metals, from by-products, contaminated soil and other
precious metal material from mining and other industries. Goldplat has a
pivotal role to play in the circular economy that extends the extraction of
minerals to re‑processing of what would typically be dumped as waste
materials. Goldplat has two market leading operations in South Africa and
Ghana focused on providing an economic method for mines to dispose of waste
materials while at the same time adhering to their environmental obligations.
Goldplat has been providing these services for more than 20 years mainly to
the mining industry in Africa, but more recently also in South America.
Goldplat's extraction processes and multiple process lines enable it to keep
materials separate, which provides a high degree of flexibility when proposing
a solution for a particular type of material. The processes which are employed
include roasting in a rotary kiln, crushing, milling, thickening, flotation,
gravity concentration, leaching, CIL, elution and smelting of bullion.
Goldplat recovery operations recover between 1,500 ounces to 2,500 ounces
monthly through its various circuits and under different contracts. The grade,
recovery, margins and terms of contracts can differ significantly based on the
nature of the material supplied and processed. At a minimum, 50% of material
produced is exposed to the fluctuation in the gold price, with the remainder
of the production being offset by corresponding changes in raw material costs.
The strategy of the Company, which also drives the key performance indicators
of management, is to return value to the shareholders by creating sustainable
cash flow and profitability through:
· growing its customer base in Southern Africa, West Africa, South
America and further afield;
· strengthening its license to operate in the jurisdictions in which it
operates;
· forming strategic partnerships with other industry participants;
· leveraging its role in the circular economy to diversifying into
processing of platinum group metals ("PGM"), coal and other commodities
contaminated material;
· ensuring the sustainability of its operations from an environmental,
social and governance perspective; and
· optimising the value to be extracted from the processing of its
2.2-million-ton, TSF.
Goldplat's highly experienced and successful management team has a proven
track record in creating value from contaminated gold and other precious
metals-bearing material.
The Group follows the responsible gold guidelines as set-out by the London
Bullion Mark Association ("LBMA") and our processes are audited on a bi-annual
basis, to provide further comfort to its suppliers, partners and customers.
Goldplat has a JORC defined resource (see the announcement dated 29 January
2016 for further information) over part of its active TSF at its operation in
South Africa of 1.43 million tons at 1.78g/t for 81,959 ounces of gold.
Since the resource estimate was completed, more than 1,000,000 tons of
material have been deposited on the TSF.
Operating results
The recovery operations continued to deliver strong results with profit after
tax attributable to owners of the Company of GBP2,798,000 (2022 -
GBP3,555,000), a decrease of 21.3% from the previous financial year.
The decrease was driven by increased electricity supply cuts in South Africa,
delays at the smelters in Europe and being unable to export material from
Ghana due to the delays in the finalisation of Ghana's gold export license.
Before the 2020 financial year, the cashflow generated was invested in
sustaining and growing our mining portfolio in Africa, which we exited during
the 2021 financial year. Since then, the Group has been focussed on the
recovery operations to increase visibility of earnings through:
· Growing its customer base and its raw material supply on site;
· Securing its license to operate through maintain licenses and
contained conditions; and
· Securing and extending our role in the circular economy by expanding
our business into other commodities.
Growing the customer base
During the year the Group retained all major woodchips and byproduct suppliers
and secured additional supplies of material in Ghana and South America. A
major supplier is defined as a supplier that supplied a material amount of raw
material to the operations during the last financial year.
During previous years we removed low-grade surfaces sources from various sites
owned by different entities, whilst during the year we secured a contract with
DRDGOLD Limited ("DRDGOLD"), which provides us access to certain low-grade
soils. As a result, we have removed material from fewer suppliers, although
the quantity available from DRDGOLD has meant that our security of supply for
our milling and carbon-in-leach circuits increased to more than 5 years.
The nature of these materials to be removed from DRDGOLD will vary in terms of
the gold grade contained and the recoverability of the gold contained through
our circuits. The analysis and processing of these materials to date has
indicated that it will be viable to remove and process at current cost and
price parameters.
Securing pipeline and developing alternative reclamation resources Units 2023 2022
Product type South Africa Ghana South Africa Ghana
Low-grade surface sources Number 1 0 5 0
Woodchips Number 6 0 6 0
By-products Number 5 12 5 6
The percentage contribution on different feed products to operating margins in
South Africa does fluctuate from month to month but on average each product
type contributes a third of the margins for Goldplat Recovery SA ("GPL"),
highlighting each product's significance to the operations. In Ghana, Gold
Recovery Ghana ("GRG") margin is derived only from the different types of
by-products generated by current mining activities.
Although GPL has retained all contracts during the year the consolidation
continues in the South African gold industry; mines are closing or are
becoming more efficient in their processing, resulting in reduced volumes and
grade of woodchips and by-products received.
As a result, GPL focus is to increase its share of the market in South Africa,
securing business of a major mining group in South Africa it is not servicing
currently and looking to neighbouring countries to supplement current
feedstock.
The focus of GRG in Ghana remains on opening the West African market,
specifically securing more feedstock out of Ivory Coast, Mali and other
countries. After year-end GRG received its first supply from a mining group in
Ivory Coast which provides additional confidence on future supply out of this
jurisdiction.
The Group continues to investigate and research different types of discard and
waste sources from industry to increase the flexibility in the types of
material it processes.
License to operate
Due to the nature of the recovery services the Group provides and the
commodities we recover, we require various licenses to operate and need to
comply with the conditions of these licenses.
During the year the group continued to invest cost and capital to maintain
these licenses and to ensure our operations comply with these licenses.
During the year GRG renewed the Minerals Commission - License to Purchase and
Deal in Gold and the Environmental Protection Authority License. The delay in
the renewal of the License to Purchase and Deal in Gold in Ghana had a
significant impact on GRG's ability to export material and as a result secure
material from suppliers.
The Department of Water and Sanitation of the Republic of South Africa has
authorised the water use licence of GPL during June 2022 which includes the
extraction and use of water in its recovery processes and the impact of its
disposal of tailings on a new TSF, according to the conditions set out in the
licence, which is valid for 12 years. This has enabled GPL to construct a new
TSF that will provide an additional seven years of deposition capacity.
Below is a summary of some of the major licenses required by operations to
operate in current jurisdictions:
License to operate Valid until 2023 2022
South Africa Ghana South Africa Ghana
Current licenses November 2040* Precious Metals Precious Metals
Refining License Refining License
January 2024 Air Emissions License Air Emissions License
Expired* Mining Right (expired May 2023) Mining Right
(expired May 2023)
Annual Radio-active License Radio-active License
2034 Water Use License Water Use License
Annual Precious Metals Precious Metals
Import Permit Import Permit
Annual Precious Metals Precious Metals
Export Permit Export Permit
Annual Ghana Freezone Authority Ghana Freezone Authority
May 2026 Minerals Commission - License to Purchase Minerals Commission - License to Purchase
and Deal in Gold and Deal in Gold
18 December Environmental Protection Authority License Environmental Protection Authority License
2025
New application Waste License
* GPL does not require a mining right in South Africa to continue its
operation and is conducting its operations under a Precious Metals Refining
License which only expires in November 2040. As GPL does not have an
identified mineral deposit and does not extract any ore from a mineral
deposit, it could not renew its mining right per the Department of Mineral
Resources and Energy ('DMRE'). We have applied to the relevant Government
authorities to convert the existing environmental management plan in place to
an integrated environmental authorization and waste management licence. We
await their response.
Circular economy
Goldplat has a pivotal role to play in the circular economy that extends to
the extraction of minerals to re-processing of what would typically be dumped
as waste materials. It also extends to responsible mining and business
practices that underpin Goldplat as a sustainability partner for large mining
groups.
During the year all of our operating profit was derived from the processing of
discards or waste materials from historic or current mining activities.
Goldplat believes that it can extend this pivotal role it is playing in the
circular economy to the gold industry in South America and into other
commodities including the platinum and coal mining industry in South Africa.
As a result, we made a strategic investment of GBP150,000 to obtain the usage
of a small spiral plant for our gold operations in South Africa and acquired a
15% shareholding in a fine coal recovery technology company. Goldplat has an
option to invest an additional GBP1.5m, 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 the year we invested capital to increase our ability to process
precious metal group minerals and engaged with potential partners that can
assist in increasing supply of material out of the PGM industry.
In addition, the Group has decided to acquire land in South America,
specifically Brazil, a process which has not been completed to date, at a
value of circa GBP103,000. The decision was driven by the need to establish an
address in South America from which we can service our clients. In time we
plan to increase operational plant capacity in Brazil to provide solutions for
lower grade material not processable at our other plants due to the cost of
transport to those facilities.
Tailings Facility
With the approval of the water use license, GPL constructed a new TSF, which
is adjacent to the current TSF, which was completed in August 2023 and is
currently being commissioned over a period of 9 months. The new TSF has
sufficient capacity to store the tailings we will produce in our current
operations for the next seven years.
The new TSF has been constructed by using regulated synthetic liner and design
drainage which should enable more process water to be re-used in the plant and
reduce seepage and contamination of ground water.
The new TSF allows us to divert all deposition from the current facility,
which will provide us with the ability to use the current facility to recover
the JORC resource through DRDGOLD. The processing of our old TSF remains
dependent on the approval of the water use license over certain areas for the
installation of a pipeline to the DRDGOLD process facility. The application
process is ongoing with engineering designs being finalised with final
application to be done before end of December 2023. Approval is estimated to
be received within Q4 of the 2024 financial year.
DRDGOLD and Goldplat Plc are currently in the process of evaluating different
variables that will impact on the processing of the TSF, as well as the
commercials of doing so; this process will be completed alongside the water
use license. To enable us to process the current TSF through a DRDGOLD
facility, we will require approval to install a pipeline to this DRDGOLD
processing facility (as indicated in paragraph above) and will need to
finalise commercial agreements with DRDGOLD.
Electricity Supply
During the year, the South African operation lost circa 13% of its production
hours due to electricity supply outages, which has a significant impact on our
lower grade circuits. The lower grade circuits operate continuously, and any
hours lost result in a loss of production.
Due to the increased uncertainty of electricity supply in the medium term, we
have decided to invest in diesel generators which will be able to sustain
operations in South Africa during electricity cuts. The capital cost of these
investments will be GBP750,000 and will be financed over 36 months with one of
our local banks. Based on 25% of available hours expected to be lost during
the next 24 months, we expect that the capital cost of the generators will be
recovered within 24 months. During this year, we will also continue to
investigate other options to secure electricity supply, for example additional
connections to the local Municipality Grid or a new direct connection to Eskom
(South Africa Electricity Generator and Supplier); however, the timelines of
these options remain uncertain and unclear.
The diesel generators are expected to be operational by the end of January
2024.
Anumso Gold Project - Ghana ('AG')
The gold mining license under the Anumso Gold ('AG') project expired during
March 2021 and was not renewed as was the intention of the Company and the
joint venture partner, Desert Gold Ventures Inc. The investment in AG was
disclosed as a discontinued operation during the 2021 year. In that year we
were informed that mineral right fees since 2013 were outstanding, which is
still being disputed. None of the joint venture partners intend to capitalise
the AG project to settle the claim and current AG liabilities exceed its
assets by the minerals right fees outstanding. The Company's share of
outstanding minerals right fees is GBP369,000 and this has been accrued in
prior years.
Outlook
Our focus during the year has been, and will continue to be:
· to open up and expand our market share in West Africa and further
into the rest of Africa;
· to acquire land in Brazil, and expand our service delivery,
specifically on lower grade material in Brazil and elsewhere in South America;
· increase our market share in South Africa and increase client base in
neighbouring countries;
· to reduce the of cost of production, specifically on our CIL circuits
in South Africa;
· to agree commercial terms on the reprocessing of the TSF with DRDGOLD and
finalise the regulatory requirements to allow us to pump material through a
pipeline to the DRDGOLD facility;
· leveraging our strength and capabilities through the processing of
other precious metals and commodities.
The recovery operations have nearly always been cashflow generative and during
the year we have utilised some of this cashflow to build the new TSF in South
Africa, support working capital levels as a result of delays in renewal of our
Gold licence in Ghana and delays experienced on payment from a smelter in
Europe. The Company will remain focused on sharing future cashflows with
shareholders, specifically distributing cash surplus (above Group's
operational requirements and growth plans) to shareholders.
The South African operations will continue to serve the South African gold
industry and will focus on sustaining profitability from old mining clean-ups
and as part of its diversification strategy will continue investing capital
into processing PGM's.
We are working with DRDGOLD to find the most economic methods to reprocess TSF
(which has a JORC Compliant Resource of 81,959 ounces) and receiving
environmental approval for a pipeline which will be required to transport
material to a facility for processing.
Goldplat recognises the cyclical nature of the recovery operations as well as
the risks inherent in relying on short-term contracts for the supply of
materials for processing, particularly in South Africa where the gold industry
is in slow longer term decline. These risks can be mitigated by improving our
operational capacities and efficiencies to enable us to treat a wider range of
lower grade materials and leveraging on our strategic partnerships in industry
to increase security of supply. We will continue to seek materials in wider
geographic areas. We shall also keep looking beyond our current recovery
operations for further opportunities to apply our skillsets and resources.
Conclusion
The last few years involved a lot of changes in Goldplat's business as we have
set out to increase sustainability and growth of our recovery operations. I
would like to compliment Goldplat's employees, its advisors, my fellow
directors and the Company's shareholders not just for their efforts and
support, but for how they have embraced the changes and remained focused on
the opportunities they bring. This year we have seen the benefit of these
changes and the Board is looking forward to building on this year's successes,
creating opportunities from the ever changing environment and returning value
to shareholders.
Werner Klingenberg
Chief Executive Officer
15 December 2023
CFO Report
Overview
Goldplat delivered another year of good results despite delays at the smelters
in Europe, delays in finalising our gold export license in Ghana, increased
electricity supply cuts in South Africa and inflationary pressures.
Goldplat achieved a profit after tax of GBP3,068,000 (2022 - GBP3,963,000), a
decrease of 22.6% from the previous year.
Revenue decreased by 3% to GBP41,881,000, whilst the average gold price during
the year remained constant at USD1,829/oz (2022 - USD1,833/oz).
The margins of the Group depend upon the volume, quality and type of material
received, the metals contained in such material, processing methods required
to recover the metals, the final recovery of metals from such material, the
contract terms, metals prices and foreign currency movements. During the year,
the gross profit margin decreased from 23.1% to 17.7%, which was driven by
high volume of high-grade low-margin batches processed in Ghana and impact of
electricity supply cuts in South Africa, where less gold was produced for the
same fixed costs expensed. This was exacerbated by foreign exchange losses,
which increased by GBP685,000.
The table below on the operating performance of the two recovery operations
combined (excluding other Group and head office cost, foreign exchange gains
& losses, finance cost and taxes) reflects the ability of the recovery
operations in South Africa and Ghana to produce profitably at various gold
prices and production levels for the last 5 years.
2023 2022 2021 2020 2019
Average Gold Price per oz in 1,829 1,833 1,846 1,560 1,263
US$ for the year
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 41,881 43,222 35,400 24,809 21,769
Gross Profit 7,422 9,994 6,199 7,312 3,114
Other (Loss)/Income (96) 53 56 0 0
Administrative Costs 3,021 2,332 1,694 1,977 861
Operating Profit Before Finance Costs 4,305 7,715 4,561 5,335 2,253
Financial review
The major functional currencies for the Group subsidiaries are the South
African Rand (ZAR) and the Ghana Cedi (GHS) whilst the presentation currency
of the group is Pounds Sterling (GBP). The average exchange rates for the year
are used to convert the Statement of Profit or Loss and Other Comprehensive
Income for each subsidiary to Sterling.
As set out in the table below, the average ZAR and GHS weakened against the
Pound Sterling by 5.8% and 55.0% respectively. The exchange rates as at the
end of the year are used to convert the balance in the statement of Financial
Position. As set out in the table below, the ZAR and GHS closing rate
depreciated by 20.6% and 49.3% respectively, which resulted in the
GBP3,231,000 loss on exchange differences on translation during the year.
2023 2022 Variance
GBP GBP %
South African Rand (ZAR) Average 21.43 20.26 5.8%
Ghanaian Cedi (GHS) Average 13.7 8.84 55.0%
South African Rand (ZAR) Closing 30 June 2023 23.87 19.80 20.6%
Ghanaian Cedi (GHS) Closing 30 June 2023 14.60 9.78 49.3%
Apart from the gold price, the Group's performance is impacted by the
fluctuation of its functional currencies against the USD in which a majority
of our sales are recognised. The average exchange rates for the year used in
the conversion of operating currencies against the USD during the year under
review are set out in the table below:
2023 2022 Variance
USD USD %
South African Rand (ZAR) Average 17.78 15.23 16.7%
Ghanaian Cedi (GHS) Average 11.37 6.66 70.7%
Personnel
Personnel expenses increased by 11.6% to GBP5,214,000 (2022 - GBP4,674,000)
during the year as a result of an increase in production personnel from 394 to
415. The increase in personnel has been driven by an increase in production
units and the construction of the tailings facility in South Africa. We spent
a total of GBP89,000 on various training programmes for our personnel.
Net finance loss
The net finance loss for the year can be broken down into the following:
2023 2022
Interest component GBP GBP
Interest receivable 69,000 0
Interest payable (283,000) (207,000)
Interest on pre-financing of sales (956,000) (449,000)
Intercompany foreign exchange income/loss 510,000 (157,000)
Operating foreign exchange losses (221,000) (1,071,000)
Net Finance Costs (881,000) (1,884,000)
Net finance costs decreased to GBP881,000 (2022 - GBP1,884,000) during the
year as a result of:
· Decrease in foreign exchange losses in operations of from GBP1,071,000
to GBP221,000. During the prior year we had a large foreign exchange loss in
Ghana due to the depreciation of the GHS against the USD during that year. As
we pre-finance a portion of our sales to the smelters, the exchange rate on
the day we receive most of our funds was lower than the exchange rate on the
day we recognise the sale in our records.
· The Group has a USD loan outstanding to South Africa, at year end the
value was GBP1,183,000 (2022 - GBP2,395,000). Due to the ZAR weakening against
the USD and the USD strengthening against the GBP, an unrealized profit was
created in the Group, which was the major contributor to the intercompany
foreign exchange income of GBP510,000.
As a result of delay in finalization of batches at a smelter in Europe, the
balance prefinanced increased and the year it remained outstanding increased,
resulting in an increase in interest on pre-financing of sales to GBP956,000
(2022 - GBP449,000).
The interest payable on borrowings relates to buy-back of the minority share
in GPL during the previous year and increased as a result of the increase in
the prime overdraft rate in South Africa during the current year.
Taxation
During the year the income tax expense decreased by more than 80%. This has
resulted in a decrease in the effective tax rate from 24.7% to 8.3%, which was
driven by the following:
· Decrease in taxation rate of 15.59% for GPL, to 9.84%, due to a change
in the mining tax rate formula and a decrease in profits resulting in a lower
taxation rate based on mining tax formula applied in South Africa;
· Decrease in GPL profits before taxation from GBP4,648,000 to
GBP2,781,000.
GRG is registered as a Free Zone company in Ghana and was taxed at 15% (2022:
15%) during the current year.
During the year, the dividend from GPL to the Company incurred a withholding
dividend taxation charge of 5%. The withholding dividend tax for the year was
GBP69,000 (2022 - GBP71,000).
Other comprehensive income
During the year the Group experienced a loss in foreign exchange translation
reserve of GBP3,231,000 and was primarily made up of:
· Foreign exchange translation loss in GRG of GBP1,259,000 as a result of
devaluation of the GHS during the year against the GBP by 49.3%; and
· Foreign exchange translation loss in GPL of GBP2,169,000 as a result of
devaluation of the ZAR during the year against the GBP by 20.6%.
Property, plant & equipment
During the year we spent GBP1,911,000 on the acquisition and construction of
plant and equipment, mainly at GPL in South Africa.
We incurred GBP1,480,000 in GPL, with the main contributors to the capital
expenditure in the current year being capital incurred on the new TSF project
of GBP969,000 and the refurbishment of our oldest CIL circuit of GBP302,000.
We incurred GBP430,000 in GRG, of which GBP263,000 related to the new milling,
gravity and flotation circuit increase recoveries from material received. This
plant will start operating by Q3 of 2024 financial year. A further GBP123,000
on yellow equipment and GBP44,000 was incurred on the extension and
improvements to our laboratory.
Intangible Assets
The intangible assets relate to the goodwill on the investment held in GMR and
GPL. The balance has been assessed for impairment by establishing the
recoverable amount through a value-in-use calculation, the detail of which has
been disclosed in note 5 of the financial statements.
Right-of-use asset
The right-of-use assets decreased during the year by GBP224,000. The primary
reason for the decrease is due to assets with a value of GBP230,000 that were
transferred to property, plant and equipment, as they are now owned by GPL.
The Group acquired plant and machinery and vehicles on finance leases for
GBP146,000.
The remainder of the changes relate to amortisation for the year and foreign
exchange movements as indicated in note 19 of the financial statements.
Investment in Caracal Gold
During the year the Company sold all its shares in Caracal for a total
consideration of GBP681,000.
Receivable on Kilimapesa sale
GMR is entitled to receive a further 1% net smelter royalty on all production
from Kilimapesa up to a maximum of $1,500,000, on any future production from
Kilimapesa. As at the end of the year, based on production at Kilimapesa,
GBP601,000 is receivable.
Loan receivable
As part of the repurchase of the minority's share, shares were also issued to
a new minority in South Africa, in the 2022 year, Aurelian, a portion of which
is payable from dividend proceeds. The balance outstanding is GBP164,000.
Inventories
The increase of GBP8,086,000 in the inventory balance, relates mainly to an
increase of GBP7,991,000 in inventory at GRG.
2023 2022
GBP GBP
Precious Metals on Hand and in Process 16,618,000 8,186,000
Raw Materials 2,462,000 2,730,000
Consumable Stores 1,054,000 1,132,000
20,134,000 12,048,000
The increase in GRG inventory relates mainly to an increase in precious metals
on hand and in process of GBP7,938,000 driven by the inability to export
material due to delays in the renewal of the gold export license.
The raw material stock is only held in South Africa, and relates to the
low-grade material processed through our Carbon-In-Leach ('CIL') circuits.
During the year we've processed some of the high grade, higher cost material,
but stock levels remained the same. With the agreement reached with DRDGOLD,
by which we can remove and process materials on DRDGOLD premises, we have not
just increased the availability of raw material for processing, but also put
GPL in a position to operate with lower levels of raw materials at our
premises.
Trade and other receivables
The Group's trade and other receivables fluctuates based on grade and volume
of batches and material processed during different periods of the year in the
two operating entities.
Apart from the gold bullion produced in South Africa, on which payment is
received within 14 days, for the remainder of the concentrates we produce, the
payment terms on average are between 4 to 6 months.
During the year, the trade and other receivables increased by GBP19,303,000,
of which GBP11,328,000 relates to an increase in GRG and GBP7,710,000 to an
increase in GPL.
The increase in GRG was mainly due to the delay in outturn of batches
delivered to a smelter in Europe. In GPL, the reason for the increase was
similar although larger volumes of material delivered to the smelters closer
to the end of the financial year also contributed to the year-on-year
increase.
Provisions
In terms of section 54 of the regulations of the Minerals Resource and
Petroleum Act of 2002, in South Africa, a Quantum of Financial Provisioning is
required for activities performed under mining lease. The Quantum was
reassessed during the current year and increased by GBP78,000.
Deferred tax liabilities
The deferred tax liabilities decreased during the year from GBP1,013,000 to
GBP531,000. The decrease is a result of a reduction in the taxation rate used
during the current year in South Africa decreasing from 25.43% to 9.84%. The
reduction in tax rate is because the South African subsidiary is taxed on a
mining formula tax, which is driven by profitability margins and capital
spend. Due to reduction in profitability and increase in capital invested, the
tax rate reduced.
Interest bearing borrowings
In the prior year, GPL entered into a ZAR denominated bank facility of ZAR 60
million (approximately GBP3.02 million) with Nedbank, to finance the
repurchase of shares from minorities in South Africa. The full ZAR 60 million
was drawn during the first half of the prior year and the principal on the
bank facility is repayable monthly over 36 months. The interest payable on the
facility is the South African Prime Rate plus 1.75%.
GPL provided security over its debtors as well as a negative pledge over its
moveable and any immovable property, with a general notarial bond registered
over all movable assets. The Group entered into a limited suretyship for ZAR
60 million, in favour of Nedbank.
The balance outstanding on the reporting date was GBP1,183,000 of which
GBP898,000 is repayable in the next 12 months.
Refer to note 18 of the financial statements for further disclosure.
Trade and other payables
The increase in trade and other payables of GBP28,225,000, was mainly driven
by delays at a smelter in Europe and also the delay of export material in
Ghana, due to delay in the renewal of our gold export licence.
In general, we pay our suppliers before we recover the value from material
processed and delivered to smelters or refiners. Suppliers are either paid in
full or a percentage of the balance is paid until we receive our final results
from refiners or smelters. We receive external funding for material delivered
to smelters to finance this gap between receipts and payments. During the year
the balance funded increased as a result of delays at smelter in Europe to
GBP19,054,099 (2022 - GBP7,421,000).
The delay in exports resulted in increases in stock holding and as result
contributed to an increase in raw material accruals payable to suppliers to
GBP17,799,000 (GBP4,638,000).
Conclusion
Looking forward, we expect inventory, trade and other payables and trade and
other receivables to reduce as we start exporting in the first quarter of the
new financial year in Ghana and realizing profits on these sales. We remain
focused on generating cash to fund our capital spend on compliance projects as
well as the generators and creating value for our shareholders.
Brent Doster
Chief Financial Officer
15 December 2023
Statements of Financial Position - Group
Group Group
Figures in £'000 2023 2022
Assets
Non-current assets
Property, plant and equipment 5,265 4,763
Right-of-use assets 352 576
Intangible assets 4,664 4,664
Investment in subsidiary or associate 1 1
Unlisted investments 63 -
Receivable on Kilimapesa sale 571 556
Other loans and receivables 145 189
Total non-current assets 11,061 10,749
Current assets
Inventories 20,134 12,048
Trade and other receivables 29,205 9,902
Current tax assets 58 100
Receivable on Kilimapesa sale 30 142
Investment in Caracal Gold - 727
Other loans and receivables 19 8
Cash and cash equivalents 2,977 3,895
Total current assets 52,423 26,822
Total assets 63,484 37,571
Equity and liabilities
Equity
Share capital 1,678 1,678
Share premium 11,562 11,562
Capital Redemption Reserve 53 53
Retained income 12,328 9,530
Foreign exchange reserve (9,401) (6,170)
Total equity attributable to owners of the parent 16,220 16,653
Non-controlling interests 1,033 1,150
Total equity 17,253 17,803
Liabilities
Non-current liabilities
Provisions 743 811
Deferred tax liabilities 531 1,013
Interest bearing borrowings 285 1,417
Lease liabilities 37 111
Loan from group company - -
Total non-current liabilities 1,596 3,352
Current liabilities
Provisions 207 208
Trade and other payables 43,196 14,971
Interest bearing borrowings 898 978
Lease liabilities 139 259
Bank overdraft 195 -
Total current liabilities 44,635 16,416
Total liabilities 46,231 19,768
Total equity and liabilities 63,484 37,571
Statements of Profit or Loss and Other Comprehensive Income - Group
Group Group
Figures in £'000 2023 2022
Revenue 41,881 43,222
Cost of sales (34,459) (33,228)
Gross profit 7,422 9,994
Other income / (loss) (96) 53
Administrative expenses (3,021) (2,332)
Profit from operating activities 4,305 7,715
Finance costs (881) (1,884)
Profit before tax 3,424 5,831
Income tax expense (356) (1,868)
Profit for the year 3,068 3,963
Profit for the year attributable to:
Owners of Parent 2,798 3,555
Non-controlling interest 270 408
3,068 3,963
Other comprehensive loss net of tax
Exchange differences on translation relating to the parent
Losses on exchange differences on translation (3,231) (522)
Total Exchange differences on translation (3,231) (522)
Exchange differences relating to the non-controlling interest
Losses on exchange differences on translation (203) (5)
Total other comprehensive income that will be reclassified to profit or loss (3,434) (527)
Total other comprehensive loss net of tax (3,434) (527)
Total comprehensive (loss) / income (366) 3,436
Comprehensive (loss) / income attributable to:
Comprehensive (loss) / income, attributable to owners of parent (432) 3,033
Comprehensive income, attributable to non-controlling interests 66 403
(366) 3,436
Earnings per share attributable to owners of the parent during the year
Basic earnings per share
Basic earnings per share 1.67 2.08
Diluted earnings per share
Diluted earnings per share 1.65 2.05
Statement of Changes in Equity - Group
Figures in £'000 Share Share Share Foreign Retained Attributable Non- Total
Capital premium Redemption currency income to owners controlling
of the
Reserve translation
parent interests
reserve
Balance at 1 July 2021 1,698 11,491 - (5,258) 6,846 14,777 3,637 18,414
Changes in equity
Profit for the year - - - - 3,555 3,555 408 3,963
Other comprehensive income - - - (522) - (522) (5) (527)
Total comprehensive income for the year - - - (522) 3,555 3,033 403 3,436
Non-controlling interests in subsidiary dividend - - - - - - (139) (139)
Decrease of Non‑Controlling Interest (21.30%) - - - (500) 3,589 3,089 (3,089) -
Increase of Non‑Controlling Interest (4.67%) - - - 110 (787) (677) 677 -
Decrease of Non‑Controlling Interest (4.24%) - - - (100) 715 615 (615) -
Increase of Non‑Controlling Interest (4.24%) - - - 100 (715) (615) 615 -
Cost of share repurchase in subsidiary (21.30%) - - - (3,999) (3,999) (413) (4,412)
Proceeds on issue of shares in subsidiary (4.67%) - - - 716 716 74 790
Cost of share repurchase in subsidiary (4.24%) - - - (653) (653) (68) (721)
Proceeds on issue of shares in subsidiary (4.24%) - - - - 653 653 68 721
Cost of Share Options Issued - - - 11 11 - 11
Cost of Company Shares Repurchase (53) - 53 (401) (401) - (401)
Shares issued from options exercised 33 71 - - - 104 - 104
Balance at 30 June 2022 1,678 11,562 53 (6,170) 9,530 16,653 1,150 17,803
Balance at 1 July 2022 1,678 11,562 53 (6,170) 9,530 16,653 1,150 17,803
Figures in £'000 Share Share Share Foreign Retained Attributable Non- Total
Capital premium Redemption currency income to owners controlling
of the
Reserve translation
parent interests
reserve
Changes in equity
Profit for the year - - - - 2,798 2,798 270 3,068
Other comprehensive loss - - - (3,231) - (3,231) (203) (3,434)
Total comprehensive income for the year - - - (3,231) 2,798 (433) 67 (366)
Non-controlling interests in subsidiary dividend - - - - - - (184) (184)
Balance at 30 June 2023 1,678 11,562 53 (9,401) 12,328 16,220 1,033 17,253
Statements of Cash Flows - Group
Group Group
Figures in £'000 2023 2022
Net cash flows from operations 4,511 6,471
Finance cost paid (521) (1,884)
Income taxes paid (647) (1,590)
Net cash flows from operating activities 3,343 2,997
Cash flows used in investing activities
Proceeds from sale of Kilimapesa - 312
Proceeds from sale of Caracal 727 -
Other cash payments to acquire equity or debt instruments of other entities (126) -
Proceeds from sale of property, plant and equipment 30 142
Acquisition of property, plant and equipment (1,911) (850)
Cost of Share Repurchase from Minority Shareholder in Subsidiary - (3,791)
Cash flows used in investing activities (1,280) (4,187)
Cash flows (used in) / from financing activities
Proceeds from drawdown of interest-bearing borrowings - 3,031
Proceeds from issue of shares in Subsidiary to Minority Shareholder - 247
Proceeds from exercise of share options - 104
Payment of interest-bearing borrowings (1,620) (673)
Cost of Share Repurchase in Company - (401)
Repayments of other financial liabilities - -
Repayment of leases (287) (367)
Payment of dividend by subsidiary to non-controlling interest (185) (139)
Cash flows (used in) / from financing activities (2,092) 1,802
Net (decrease) / increase in cash and cash equivalents (29) 612
Cash and cash equivalents at beginning of the year 3,895 3,459
Foreign exchange movement on opening balance (1,085) (176)
Cash and cash equivalents at end of the year 2,781 3,895
Accounting Policies
1. General information
Goldplat plc is a public company limited by shares domiciled and registered in
England and Wales.
The address of the Company's registered office is Salisbury House, London
Wall, London, the United Kingdom EC2M 5PS. The Group primarily operates as a
producer of precious metals on the African continent.
2. Basis of preparation and summary of significant accounting policies
Statement of compliance
The consolidated and separate financial statements have been prepared in
accordance with UK - adopted International Accounting Standards ("IAS") and
the Companies Act 2006 as applicable to entities reporting in accordance with
IAS; as applicable to entities reporting in accordance with IFRS.
Basis of measurement
The consolidated financial statements have been prepared on the historical
cost basis, except for derivative financial instruments that have been
measured at fair value.
Functional and presentation currency
These consolidated financial statements are presented in Pounds Sterling,
which is considered by the directors to be the most appropriate presentation
currency to assist the users of the financial statements. All financial
information presented in GBP has been rounded to the nearest thousand, except
when otherwise indicated.
The Group's subsidiaries' functional currency is considered to be the South
African Rand (ZAR), Ghana Cedi (GHS) and the Company's functional currency is
Pounds Sterling (GBP) as these currencies mainly influences sales prices and
expenses.
Use of estimates and judgements
The preparation of the consolidated and separate financial statements in
conformity with UK - adopted IAS requires management to make judgements,
estimates and assumptions that affect the application of accounting policies
and the reported amounts of assets, liabilities, income and expenses. The
estimates and associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making judgements about
carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimates are revised if the revision affects only that period, or in the
period of revision and future periods of the revision if it affects both
current and future periods.
Critical estimates and assumptions that have the most significant effect on
the amounts recognised in the consolidated financial statements and/or have a
significant risk of resulting in a material adjustment within the next
financial year are as follows:
· Carrying value of goodwill GBP4,664,000 (2022: GBP4,664,000)
· Inventory - precious metals on hand and in process to the value of
GBP16,618,000 (2022: GBP8,186,000)
· Rehabilitation provision GBP743,000 (2022: GBP811,000)
· Useful economic lives
· Estimated revenue to the value of GBP27,531,000 (2022: GBP8,620,000)
3. Share capital, premium and redemption reserve
3.1 Authorised and issued share capital
Group Group
Figures in £'000 2023 2022
Issued
Ordinary shares 1,678 1,678
1,678 1,678
Share premium 11,562 11,562
13,240 13,240
3.2 Reserves
Ordinary shares
All shares rank equally with regard to the Company's residual assets. The
holders of ordinary shares are entitled to receive dividends as declared from
time to time and are entitled to one vote per share at meetings of the
Company.
Share premium
Represents excess paid above nominal value on historical shares issued.
Exchange reserve
The exchange reserve comprises all foreign currency differences arising from
the translation of the financial statements of foreign operations.
Non-controlling interest
Relates to the portion of equity owned by minority shareholders.
Capital Redemption Reserve
Portion of share capital repurchased by the Company.
4. Employee benefits expense
Group Group
Figures in £'000 2023 2022
Wages and salaries 4,416 4,009
Performance based payments 522 424
National insurance and unemployment fund 64 57
Skills development levy 43 37
Medical aid contributions 36 36
Group life contributions 64 58
Provident funds 69 53
Total 5,214 4,674
The average number of employees (including directors) during the year was:
Directors 5 7
Administrative personnel 38 26
Production personnel 415 394
458 427
Directors emoluments Executive Non-executive Total
2023
Wages and salaries 178 - 178
Fees - 141 141
Other benefits 62 - 62
Total 240 141 381
2022
Wages and salaries 181 - 181
Fees - 149 149
Other benefits 3 - 3
Total 184 149 333
Emoluments disclosed above include the following amounts paid to the highest
director:
2023 2022
Emoluments for qualifying services 240 184
Key management apart from the Directors, the emoluments paid to key management
personnel amounted to 2023 : GBP793,000 (2022: GBP806,000).
5. Earnings per share
5.1 Basic earnings per share
The earnings and weighted average number of ordinary shares used in the
calculation of basic earnings per share are as follows:
Group Group
Figures in £'000 2023 2022
Earnings used in the calculation of basic earnings per share 2,798 3,555
Weighted average number of ordinary shares used in the calculation of basic 167,783 171,018
earnings per share
5.2 Diluted earnings per share
The earnings used in the calculation of diluted earnings per share are as
follows:
Group Group
Figures in £'000 2023 2022
Earnings used in the calculation of basic earnings per share 2,798 3,555
The weighted average number of ordinary shares for the purpose of diluted
earnings per share reconciles to the weighted average number of ordinary
shares used in the calculation of basic earnings per share as follows:
Weighted average number of ordinary shares used in the calculation of basic 167,783 171,018
earnings per share
Adjusted for - Dilutive effect of share options 1,899 2,039
Weighted average number of ordinary shares used in the calculation of diluted 169,682 173,057
earnings per share
6. Related parties
Other related parties
Entity name 2023 Holding 2022 Holding
Gold Mineral Resources Limited 100% Direct 100% Direct
Goldplat Recovery (Pty) Ltd 91% Direct 91% Direct
Gold Recovery Ghana Limited 100% Indirect 100% Indirect
Anumso Gold Limited 49% Indirect 49% Indirect
Nyieme Gold SARL 100% Indirect 100% Indirect
Midas Gold SARL 100% Indirect 100% Indirect
Gold Recovery Brasil Recuperacao 100% Direct 100% Direct
Gold Recovery Peru SAC 100% Indirect 100% Indirect
GRG Tolling Ltd 100% Indirect 100% Indirect
Major inter-company transactions
Nature of transaction 2023 2022
Goldplat Recovery to Gold Recovery Ghana Goods, equipment and services supplied 679 334
Goldplat Recovery to Gold Mineral Resources Goods, equipment and services supplied 91 489
Goldplat Recovery to Gold Mineral Resources Interest received (149) (120)
Goldplat Recovery to NMT Capital Management fees - 1
Goldplat Recovery to NMT Group Managements fees - 1
Goldplat Plc to Gold Mineral Resources Management fees - -
Goldplat Recovery to Aurelian Capital Trade and other payables 1 138
Goldplat Recovery to Aurelian Capital Dividends Receivable - Aurelian 150 275
Goldplat Recovery to Aurelian Capital Management fees 17 15
Goldplat Plc Directors 141 149
7. Subsequent events
There are no events subsequent to 30 June 2023 that will have a material
effect on the consolidated financial statements.
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