REG-Preliminary Results <Origin Href="QuoteRef">GLDP.L</Origin>
18/09/2017 07:25
For best results when printing this announcement, please click on link below:
http://pdf.reuters.com/htmlnews/htmlnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com:20170918:nGNE9FPpqK
Goldplat plc / Ticker: GDP / Index: AIM / Sector: Mining & Exploration
18 September 2017
Goldplat plc
('Goldplat', the 'Group' or 'the Company')
Preliminary Results
Goldplat plc, the AIM listed gold producer, announces its preliminary results
for the year ended 30 June 2017 ('FY 2017').
Operations / Corporate
* Significant increase in operating profitability from continuing operations
in FY 2017 following the successful turnaround strategy at Kilimapesa Gold
Mine, meaning by the end of the last quarter of the year, all operations were
operating profitably
* Increased gold equivalent production highlights the continued and steady
growth of the business - Goldplat produced 42,857 ounces of gold during the
year, marking a 13.7% increase on 2016 (2016: 37,666 ounces), which follows a
23.3% increase from 2015 * Recovery operations produced 39,449 gold equivalent
ounces (2016: 35,661 ounces)
* Kilimapesa Mine produced 3,408 ounces of gold (2016: 2,005 ounces) - the
increased processing capacity was only seen towards the end of FY 2017 meaning
further upside expected with in excess of 5,800oz targeted during FY 2018
* Actual sales were 40,285 gold equivalent ounces (2016: 40,763 ounces) *
34,112 gold equivalent ounces sold for own account (2016: 27,538 ounces)
* 6,173 gold equivalent ounces transferred to clients (2016: 13,225 ounces)
* Committed to maintaining active growth strategy to build production and
profitability: * Gold recovery: * Work well advanced to increase geographical
reach, by establishing Ghana as an international recovery hub, with material
already being imported from elsewhere in Africa and South America and
opportunities identified in North America
* Opportunity to diversify metal focus - platinum group metals trials
continuing in South Africa
* Potential to maximise environmental value by offering mining "clean-up"
services processing by-products with contaminants such as mercury -
investigating a major project with the Ghanaian Government to assist in the
clean-up of artisanal mining tailings
* Primary mining: * Focussed on driving increased production at Kilimapesa
* Targeting expansion by considering opportunities to gain interests in
producing or near-production assets
* Non-core exploration portfolio: * TSX quoted Ashanti Gold Corp has the
option to earn up to 75% of Goldplat's interest in the Anumso Gold Project in
Ghana by expending US$3million on exploration work at the project
* Strategic decision to write off Nyieme Gold Project in Burkina Faso having
found the project to be too small scale to be economically viable
* Matthew Robinson appointed as Chairman - bolsters the experienced management
team
Financials
* 140% increase in operating profit from continuing operations to £2,910,000
(2016: £1,212,000)
* 43% increase in profit before tax from continuing operations to £2,836,000
(2016: £1,988,000)
* Strong performance continues to be reported at the Group's recovery
subsidiaries: * Goldplat Recovery (Pty) Ltd - South Africa - 36% increase in
profit after tax to £2,420,000 (2016: £1,777,000)
* Gold Recovery Ghana Limited - Ghana - 169% increase in profit after tax to
£1,177,000 (2016: £437,000)
* Kilimapesa Gold (Pty) Limited reported a net loss of £1,100,000 for the
year (2016: loss of £711,000) as the benefits of increased production
capacity were only realised during the second half of FY 2017. In FY 2017
revenue increased to £3,150,000 (2016: £156,000), with operating profit
achieved towards the end of the year
* Nyieme exploration project discontinued and development cost of £955,000
written-off, with no cashflow impact in current period.
* Total comprehensive income for the year still higher than comparative year
at £1,989,000 (2016: £1,897,000)
* Net cash position of £2,650,000 as at 30 June 2017 (£2,056,000 as at 30
June 2016)
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 / Daniel Bush Grant Thornton UK LLP (Nominated Adviser) Tel: +44 (0) 20 7383 5100
Andrew Raca / Justin McKeegan VSA Capital Limited (Broker) Tel: +44 (0) 20 3005 5000
Charlotte Page / Susie Geliher St Brides Partners Ltd Tel: +44 (0) 20 7236 1177
The information contained within this announcement is considered to be inside
information, for the purposes of Article 7 of EU Regulation 596/2014, prior to
its release.
Chairman's Statement
I am pleased to report in my first Chairman's statement continued growth in
profits from operating activities and progress in our strategic objectives.
Our revenue generating assets comprise sophisticated precious metal recovery
facilities in South Africa and Ghana and gold mining in Kenya. Results from
operating activities for the year from continued operations have crucially
increased to £2,910,000 (2016: £1,212,000) underpinning the growing strength
of our business and in the final part of the year under review all three
operations were making a positive contribution to profitability, with our
long-term investment in our Kilimapesa Gold Mine in Kenya now starting to
produce worthwhile results. This has, accordingly been a very positive year
for our Company and I am pleased to report that our growth initiatives are set
to continue as we remain focused on further building production and
profitability.
Strategically, we continue to seek to diversify; this diversification is in
sourcing material for our processing operations, both geographically and in
material types, and in the balance between our recovery and our mining
activities. Regarding our recovery operations, we have been active in South
America and are encouraged by the opportunities for sourcing materials we see
there. We are also active in West and East Africa and considering further
opportunities in North America.
We have been continuing to invest in the businesses, sustaining and upgrading
equipment in South Africa, developing new processing capacities in Ghana and
installing the new, higher capacity, processing circuit in Kenya. We have
borrowed modestly and conservatively to develop the Kenyan operations but
otherwise investment has been financed, as it has now been for many years,
from internally generated cash flows. We have shown the discipline to manage
our resources and consider investment opportunities with care; if we see
compelling opportunities which require additional capital we will of course
consider that also.
Your board of directors has seen a number of changes during the period. In
October 2016 my predecessor Brian Moritz retired; Brian had been Chairman
since the Company's admission to AIM in 2006 and the Group is grateful for his
guidance and enthusiasm over those years. In light of his departure, at the
annual general meeting held in October 2016 shareholders elected me to the
board. I am delighted to have joined Goldplat at a time of growth, and look
forward to stewarding the Company forward to maintain our active development
approach in order to create meaningful value. In June 2017 we were pleased to
welcome Sango Ntsaluba and Werner Klingenberg to the board. Alongside a
distinguished auditing career, Sango has extensive corporate experience in
both the public and private sectors and is executive chairman of a diversified
investment holding group. Werner is a Chartered Accountant and, having
worked in the Group for two years has exemplary knowledge of our Company; we
are accordingly delighted he has taken on the role of Goldplat's Finance
Director.
As a Group we aim to engage positively with the governmental, regulatory and
community structures where we operate. We believe that we make a significant
contribution where we operate, both financially in terms of fiscal
contributions, employment, skills upgrading and local purchasing, as well as
by operating high standards of environmental and health and safety
protocols. There are currently proposed changes in South Africa in relation
to the ownership and operation of entities in the mining sector and we will
monitor and assess how best to respond as the situation develops.
We have recently instituted a new programme to engage further with our
shareholders. In August this year, the executive team hosted a conference
call at which shareholders, and potential shareholders, were invited to
question management. We were delighted with the response from shareholders
and we intend to offer this opportunity regularly in future. Additionally we
will be hosting on Goldplat's website a Q&A document addressing shareholder
questions on the Group and its businesses. I therefore urge shareholders to
take advantage of this initiative, send us questions you have and participate
in the calls.
Running and growing our businesses profitably requires constant and close
attention to detail in sourcing, operations and cost control. I would
therefore like to acknowledge and thank management, staff and advisors across
the Group, in South Africa, in Ghana, in Kenya and in the UK, for all their
efforts over the year.
Matthew Robinson
Chairman
Operations Report
Introduction
I am pleased to report that the turnaround in Goldplat continues and good
progress has been achieved on all strategic initiatives during FY 2017. The
progress of the Group can be summarised by my statements over the past few
years: in 2015, I reported that Goldplat had laid the foundations for a
turnaround of the Group's performance and a return to profitability; in 2016 I
reported that we had laid the foundations for growth and diversification; now
Goldplat is executing the strategy of growth and diversification and expects
continued improvements in production and profitability.
With most major capital projects having been completed during the previous
year, the three priorities for FY 2017 included a focus on procurement;
developing business opportunities in South America and returning Kilimapesa
Gold (Pty) Limited ('Kilimapesa') to profitability through a processing plant
expansion project. I am pleased to report that during FY 2017 the Group has
made good progress on all of these strategic priorities.
Major capital projects for FY 2018 include the continued expansion at
Kilimapesa as well as the installation of an elution plant at Gold Recovery
Ghana Limited ('GRG'). The Group is also undertaking numerous research
projects on the recovery side of our operation, with a view to diversifying
processes and products and creating niches in the industry so as to ensure
continued competitiveness. Some of these projects may develop to the point
during FY 2018 where capital is required for further development.
Areas of Strategic Focus
With the three areas of strategic focus identified for FY 2017 proceeding well
and ongoing, the following additional strategic areas of priority were
identified during the year:
With the processing plant expansion at Kilimapesa progressing well, the focus
is now to ensure that the underground operations produce sufficient, quality
ore to fill the milling capacity at the new processing plant.
Changing market dynamics over the past few years have resulted in the mix of
profitability at Goldplat Recovery (Pty) Ltd ('GPL') evolving to a point where
the carbon-in-leach ('CIL') circuits now offer the best profitability for this
business. The focus therefore is to ensure that sources of appropriate
quality material for all of the CIL circuits are secured and strategic
stockpiles built up.
At Gold Recovery Ghana Limited ('GRG') the carbon processing business remains
key. Prospects of procuring sufficient appropriate quality carbon material
within Ghana are unpredictable and hence procurement in South America, West
Africa and elsewhere in Africa is of utmost strategic importance.
Goldplat is of the opinion that, strategically, production from recovery
operations needs to be complemented by production from primary mining and has
set a target of building primary mining production to match that of the
recovery operations over a three-year period. Whereas there are a lot of
assets available on the market, Goldplat is focused on seeking producing, or
near-production assets, which are value-accretive to existing shareholders.
Gold Production and Sales
The table below provides a summary of gold and gold equivalent production and
sales for FY 2017, with comparisons to FY 2016. During the year overall
production was 42,857 ounces (FY 2016: 37,666) and sales and transfers totaled
40,285 ounces (FY 2016: 40,763). Gold and gold equivalent ounces sold on the
Group's own account was 34,112 (FY 2016: 27,538) and that transferred to
clients was 6,173 ounces (FY 2016: 13,225).
The increase in gold and gold equivalent production of 13.7% over the year (on
2016) follows a 23.3% increase in FY 2016 on FY 2015 and demonstrates the
continued and steady growth of the business. Production grew at all operations
with the most notable growth coming from Kilimapesa as a result of the plant
expansion project and from GRG, reflecting increased production from sources
outside of Ghana. Production at GPL was once again boosted by a large project
executed for a large African producer during the year.
Goldplat Plc
Gold Equivalent Oz Reported
June 2017
Goldplat Plc Consolidated Year ending June 2017 Equivalent Gold kg Year ending June 2017 Equivalent Gold oz Year ending June 2016 Equivalent Gold kg Year ending June 2016 Equivalent Gold oz
Gold Equivalent Production
Goldplat Recovery 915 29,418 895 28,778
Gold Recovery Ghana 312 10,031 214 6,883
Kilimapesa Gold 106 3,408 62 2,005
Total 1,333 42,857 1,171 37,666
Gold Equivalent Sold
Goldplat Recovery 702 22,570 516 16,575
Gold Recovery Ghana 259 8,327 279 8,964
Kilimapesa Gold 100 3,215 62 1,999
Total 1,061 34,112 857 27,538
Gold Equivalent Transferred
Goldplat Recovery 192 6,173 411 13,225
Total 192 6,173 411 13,225
Gold Equivalent Sold and Transferred
Goldplat Recovery 894 28,743 927 29,800
Gold Recovery Ghana 259 8,327 279 8,964
Kilimapesa Gold 100 3,215 62 1,999
Total 1,253 40,285 1,268 40,763
Goldplat's Recovery Operations
Goldplat recovers precious metals, primarily gold and silver but also platinum
group metals ('PGM's'), from by-products of the mining industry and gains its
competitive advantage from a combination of the diversity and flexibility of
its treatment circuits, which make possible the recovery of metals and
concentrates from these by-product materials, the strategic geographic
locations of the Group's plants, and the extensive depth of knowledge and
experience of its longstanding team.
Goldplat sources by-products from the mining and related industries. These
include coarse and fine carbon, woodchips, rubber and steel mill liners,
grease, concentrate bags, surface materials and rock dumps. The Group also
assists in plant clean-up operations. These materials typically present an
environmental risk and cost to producers but can become a source of precious
metals and revenue when processed by Goldplat. Clients include most of the
significant gold producers in South Africa and Ghana as well as numerous
producers from elsewhere in the world and an increasing number of PGM
producers, and a number of refineries requiring the processing of concentrate
materials prior to final refining as bullion.
Goldplat Recovery (Pty) Ltd - South Africa
GPL is a well-established operation based near Johannesburg in South Africa,
serving clients as a Responsible Gold Producer, fulfilling the requirements
set out by the London Bullion Market Association. The Company's facilities
include crushing, milling, thickening, wash plants, CIL, elution,
incineration, flotation, spiralling and shotblasting.
During FY 2017 GPL produced 29,418 ounces of gold and gold equivalent (FY
2016: 28,778) of which 22,570 ounces were produced for its own account (FY
2016: 16,575) and 6,173 ounces were transferred to clients (FY 2016: 13,225).
Sourcing of material remained an area of strategic focus at GPL during FY
2017. The mining industry in South Africa remains under pressure and closure
of mining operations with consequent reduction in production took place
throughout the year and is expected to continue. The major impact to date has
been on the gold mines, with this gradual decrease in gold production
resulting in a decrease in availability of by-product material for GPL.
Goldplat believes that its "base" production level from traditional South
African sources is around FY 2015 levels of 22,000 ounces of gold and gold
equivalents. In FY 2016 the Rand Refinery silver sulphide tolling project
added significantly to this base level and in FY 2017 a large one-off batch of
carbon from a new African client was processed. In order to keep production
levels at around the 29,000 ounces of gold and gold equivalent level, GPL has
to ensure that it sources and processes similar large one-off by-product
projects every year.
With production from the CIL circuits becoming more strategically important
than from the by-product streams, focus is now on procuring long-term supplies
of material to feed these circuits. Numerous projects are underway in
partnership with existing clients and a large strategic batch of material was
procured during FY 2017. Metallurgical test work is being conducted on this
material to improve recovery rates and profitability. As a result of the
strengthened strategic sourcing team, smaller precious metal producers are now
also being visited to source by-products in addition to those received from
the large mining companies. Volumes at the smaller operators are lower
compared to the larger mining companies but increases our footprint as service
provider of choice.
With all major capital projects having been completed during FY 2016, capital
expenditure during the year was primarily on sustaining capex. During the year
the cyclone sections and kiln seals on one of the rotary kilns were replaced
and a new mill was installed in the high grade CIL section.
Metallurgical test work and pilot tests on the stock dam/tailings storage
facility material continue; this has a JORC-compliant resource (refer to the
announcement of 29 January 2016) of 81,959 ounces of gold, 216,094 ounces of
silver and 193,276 pounds of U3O8 (uranium oxide) and accordingly we believe
it has significant value potential. Alongside this, the process of securing
the West 3 Pit for deposition of tailings continues but with the different
interests of the various stakeholders and the changing regulatory environment,
the approval process is taking longer than initially anticipated. The Company
remains confident that the logistical and regulatory issues will be overcome
and the pit will be secured.
No resolution regarding the Rand Refinery dispute was reached during the year.
Goldplat now has working arrangements with four different refiners with each
product having potential for refining at one of at least three places,
including GPL itself. Goldplat is confident that the previous single refiner
risk has been mitigated and proceeded with legal action against Rand Refinery
on 11 September 2017.
On 15 June, 2017 the Broad Based Socio-Economic Empowerment Charter for the
South African mining and minerals industry, 2017, (the '2017 Charter') was
announced and gazetted in South Africa. The 2017 Charter aims to introduce
far-reaching, new, and in some cases, radical measures and requirements on the
industry. GPL is compliant with the preceding Charter, and if the 2017 Charter
is implemented, certain changes will be required to maintain compliance,
primarily in respect of: (i) the increased mandatory Black Economic
Empowerment shareholding which is currently set at 26%, but is proposed to be
increased to 30%, and (ii) in the required make-up of management demographics.
Further to an interdict application brought by the Chamber of Mines against
implementation of the Charter, the Minister of Mineral Resources has
undertaken not to implement or apply the provisions of the 2017 Charter
pending judgment on the interdict. Goldplat and GPL will monitor this issue
and will keep shareholders informed as to progress and the possible impact on
the Company as the process unfolds.
Gold Recovery Ghana Limited - Ghana
GRG's gold recovery operation, which had a tax-free status until December
2016, and a favourable tax rate thereafter of 15%, is located in the free port
of Tema in Ghana. Processing facilities include a spiraling section, filter
presses, an incinerator and a shotblast facility, used to recover gold from
mill liners. Concentrates produced at GRG are exported to GPL or to one of
the Group's refinery partners. Most of the region's major gold producers and a
number of smaller operations have contracts with GRG for the processing of
their by-products, which include fine carbon, fine carbon sludges, steel and
rubber mill liners, wood chips, slag, scaling and grease.
During FY 2017 GRG produced 10,031 ounces of gold (FY 2016: 6,883) of which
8,327 ounces were produced for its own account (FY 2016: 8,964).
With sources of material from within Ghana continuing to deplete for various
reasons, focus during the year remained on sourcing from outside of the
country. Momentum in this regard is picking up with contracts secured from
elsewhere in Africa as well as South America. The Company has been sourcing
and shipping material on a regular basis from various individual suppliers in
South America since the second half of 2016 and good progress was made on
contract negotiations during FY 2017. The first significant recurring contract
was signed with initial shipments of 360 tonnes of carbon underway to Ghana
and shipments of rubber mill liners being finalised.
A complete, second-hand 3-tonne elution plant was acquired from a producer in
South Africa for ZAR 2 million (approximately US$155k). This plant is modular,
complete with all ancillary equipment and will more than meet the requirement
of the Ghanaian operations. As such, it was deemed a better option than moving
an existing 4-tonne plant from GPL to GRG and the purchase of the required
ancillary equipment and infrastructure. It is estimated that the final cost of
installation will be in the order of US$1m, compared to the initial estimate
of US$2m for the plant from GPL. During the last quarter of FY 2017, the
acquired elution plant was dismantled, moved to GPL for refurbishment and is
now in the process of being shipped to Ghana. Installation and commissioning
is expected to be significantly quicker than per previous plans, with
commissioning now planned for the end of December 2017, six months ahead of
the milestone date stipulated by the Ghanaian Government in accordance with
the Company's gold license renewal terms.
A third fluidised bed incinerator, which was purchased second-hand from an
operator in Tanzania is currently being transported for shipment to GRG.
Focus was put into improving security at the plant and also in processing the
large stockpiles of low-grade material. These projects are ongoing and
contribute to ensuring space and a secure environment for planned increased
production at GRG in the future.
GRG is investigating a major project with the Ghanaian Government to assist in
clean-up of artisanal mining tailings. The Company is conducting extensive
sampling programmes to assess both gold as well as contaminant (mainly mercury
and cyanide) content and is simultaneously investigating the most efficient
processing methods so as to recover gold and deal with contaminants in an
environmentally acceptable manner (in compliance with acceptable global
standards).
Goldplat's Mining and Exploration
Kilimapesa Gold (Pty) Limited - Kenya
Kilimapesa is a producing gold mine located in South Western Kenya. The mine
is located in the historically productive Migori Archaean Greenstone Belt and
has a total resource (refer to the announcement of 12 December 2012) of
8,715,291 tonnes at 2.40 g/t of gold for a total of 671,446 ounces of gold at
a cut-off of 1 g/t.
Kilimapesa made operational profits during the last two months of FY 2017 the
first time in the ten years since acquisition. This has been made possible
primarily due to the substantial completion during the year of an additional
processing plant ('Plant 2'), but also as a result of continued cost cutting
and process efficiency improvements across the operation.
Kilimapesa produced 3,408 ounces of gold during the year (FY 2016: 2,005
ounces), of which 3,215 ounces of gold were sold during the period (FY 2016:
1,999 ounces). Significantly, 1,254 ounces of gold was produced during the
last quarter of the year and an annualised production rate of roughly 5,800
ounces of gold was achieved in the last two months of the year - a rate which
is sustainable with current infrastructure.
During FY 2016 it was decided by the Board to invest in the expansion of
processing capacity at Kilimapesa, at an overall capital expenditure in the
order of US$2 million. During that year a CIL plant from GRG was deconstructed
and shipped to Kenya for installation and commissioning at Kilimapesa, and two
matching second-hand ball mills were also acquired in South Africa for
installation at the mine. These would be used to construct the new Plant 2,
and during 2017 the site for construction was chosen to be near to Kilimapesa
Hill, from which the mined ore would be sourced. All necessary regulatory
approvals were also obtained during the period.
During 2017 Goldplat put in place a three stage development plan to construct
Plant 2 and build production. Stage One included the installation of a
generator, the first of the two ball mills, a concentrator facility, thickener
and six CIL tanks from GRG, as well as the construction of a borrow pit for
initial tailings deposition and the site preparation and key cut for the final
tailings storage facility ('TSF'). As the crusher circuit was planned for
Stage Two, a stockpile of fine ore was created during Stage One construction
to facilitate commissioning and production during Stage Two installation.
Stage One was commissioned by the end of December 2016 with a mill throughput
rate of 60 tonnes per day being achieved as per plan, using uncrushed and
partially crushed ore.
Up to this point the plant expansion had been funded out of
internally-generated operating cash flows from the Group. With stage one of
the expansion commissioned, the Company decided to arrange a loan facility of
up to US$2 million (the "Scipion Loan") to recapitalise the Group's
subsidiaries that had financed the work to date, and to fund the expenditure
of Stage Two of the processing plant expansion.
During the second half of FY 2017 Stage Two was substantially completed, which
included installation of the crusher section, associated feed belts and bins,
classifier and three additional larger CIL tanks. Two additional borrow pits
were constructed to allow tailings deposition of up to a year before
completion of the final TSF. Complete commissioning was delayed by a few
months due to hold-ups in delivery of key materials, primarily steelwork
associated with safety. Notwithstanding these delays, during the last two
months of FY 2017 Plant 2 was successfully processing at a mill throughput
rate of the planned 120 tonnes per day.
Stage Three of the plant expansion includes the installation of the second
mill, an additional thickener and three additional CIL tanks. This stage will
only commence once management is confident of sustained profitability and once
the Scipion debt facility has been substantially repaid.
The old processing plant ('Plant 1') continued producing throughout and with
more flexibility better efficiencies were achieved from this plant. Plant 1 is
now processing primarily tailings sourced from artisanal operations in nearby
areas. Better management of the TSF at Plant 1 has increased the available
life of this facility to around a year (from the 3-6 months at the beginning
of FY 2017).
During the year the mining focus was on creating capacity at Kilimapesa Hill
underground to produce enough ore of appropriate grade to satisfy the
throughput requirements of Plant 2. Focus was on developing reef drives and
raises so as to delineate profitable mining blocks. A mechanical loader was
acquired to facilitate ore handling in the cross cuts and reef drives and a
Kempe core drilling machine was acquired to assist in understanding the
orebody, and aid in strategic planning of mining operations. Commissioning of
this machine was not completed during the year as the required generator had
not yet been delivered. By year end, production from the Kilimapesa
underground had not yet reached planned levels and throughput at Plant 2 was
being met by the addition of stockpiled material and artisanal tailings.
A decision was taken during the year to install grid power to Plant 2.
Required authorisations and procurement of equipment was still in progress at
the end of the year and this is expected to be completed in H1 of FY 2018.
During FY 2017, significant progress was made at Teng Teng mine. A second
outlet was established, the shaft was deepened to facilitate more efficient
ore loading, and significant underground exploration was completed. Due to a
breakdown of the compressor and low priority of allocation of funds for
repair, Teng Teng exploration was temporarily halted for the last few months
of FY 2017. Activities will recommence as soon as the compressor has been
repaired. It is expected that the process of applying for conversion of the
Teng Teng area into a mining license will commence during FY 2018.
Subsequent to the year end, Kenyan National elections were held during August
2017. The Cabinet Secretary for Mining and the Governor of Narok County, where
our project is located, remain unchanged which is important for smooth
relations in the country as Goldplat and Kilimapesa management have developed
very good working relationships with these individuals. The result of the
Presidential election was subsequently declared null and void by the High
Court and a new election process has to be completed within sixty days from
the day of the Court ruling, 1 September 2017.
Anumso Gold Project - Ghana
Goldplat has a 90% interest in Anumso Gold Limited ('Anumso'), which is the
holder of a ten-year renewable mining lease for gold and associated minerals
covering an area of 29 sq. km. The project is located in the prospective
Amansie East and Asante Akim South Districts of the Ashanti Region of the
Republic of Ghana and has a current JORC compliant resource (refer to the
announcement of 12 December 2012) of 166,865 ounces of gold at 2.04g/t.
During FY 2016, Goldplat entered into an earn-in option agreement with Ashanti
Gold Corp. ('Ashanti') (formerly Gulf Shore Resources Ltd), which provides
Ashanti with the exclusive option to earn 75% of Goldplat's interest in Anumso
(67.5% of the overall project interest) in two instalments by expending an
aggregate of US$3 million on exploration on the project. In March, 2017,
Ashanti exercised its initial option which triggered the initial option
period, during which a 51% share of Goldplat's interest will be earned through
expending US$1.5 million over 18 months. Ashanti is obliged to either expend
US$1.5 million on the project within the initial option period, or pay the
deficiency to Goldplat.
Should Ashanti meet the expenditure condition within the Initial Option Period
and receive 51% of Goldplat's interest in the Anumso (45.9% of the overall
project interest), it will have the option to earn an additional 24% share of
Goldplat's interest (21.6% of the overall project interest) by expending an
additional US$1.5 million in the following 12 month period, or by paying the
deficiency to Goldplat.
By the end of FY 2017 Ashanti had spent an aggregate of US$750,000. Work
included setting up an exploration camp; establishing relationships with local
chiefs and community; the analysis of historic core; core intersections
submitted for metallurgical testing; completion of a 20-hole reverse
circulation ('RC') drill programme; continued analysis of drill results; and a
comprehensive soil sampling programme (1,300 soil samples) over the West and
East Banka conglomerate. Results of metallurgical test work and assay results
of soil samples are awaited.
Nyieme Gold Project - Burkina Faso
The 246 square km Nyieme Gold Project is located some 270 km southwest of
Ouagadougou near the town of Dano on the prospective Birimian Greenstone Belt
in southern Burkina Faso. The project has a JORC-compliant resource (refer to
the announcement of 12 December 2012) totaling 1,395,000 tonnes at 2.06 g/t
gold for 92,598 ounces at a cut-off grade of 1.0 g/t gold for all categories.
The exceptional 3-year extension which was granted on 29 September, 2014
expires in October 2017. The Company has no intention to apply for a further
extension or a renewal as previous work at the project found it to be of too
small a scale to be viable and the Company does not wish to commit any further
capital on exploration at this project. A decision has been taken by the Board
to fully write-off the value of the Nyieme Gold Project during FY 2017. The
value of this write-off in Goldplat's Statement of Profit and Loss and other
Comprehensive Income for the year ended 30 June 2017 is £955,000.
Outlook
Goldplat is now operating profitably at all of its operations and the Board
believes performance should continue to improve during FY 2018. Growth in the
recovery business is expected to come from GRG as a result of initiatives to
procure material from West Africa and South America, as well as the
commissioning of the elution plant at GRG. The project being assessed with the
Ghanaian Government to clean up artisanal tailings could potentially turn into
a large opportunity for GRG. If successful, this project will not only be
profitable and contribute to growth in GRG, but it will pave the way for once
again processing artisanal tailings and for processing by-products with
contaminants such as mercury - both from within Ghana as well as from
international sources, thus creating new revenue opportunities. Subsequent to
the year-end, a pilot plant for the processing of artisanal tailings was
procured at minimal cost and is expected to be in production in the second
quarter of FY 2018. We expect production and profitability at GPL to remain at
current levels albeit that the focus will shift to the more profitable CIL
products locally and procurement of additional by-products from outside of
South Africa. We initiated legal proceedings against Rand Refinery on 11
September 2017 and cannot predict how long such proceedings might last.
Goldplat remain confident that all monies owed to GPL by Rand Refinery will be
recovered.
Growth from mining operations will be focussed on the Kilimapesa expansion
project. Subsequent to the year-end, the crusher section at Plant 2 was
commissioned and the plant is consistently exceeding the planned 120 tonnes
per day throughput target, and managing closer to 160 tonnes per day
regularly. A decision has been taken to install the second mill at Plant 2
whether or not a decision is taken to proceed with Stage Three to provide
back-up to the first mill and potentially additional production capacity. The
plan for the year is to get to a point where only ore from Kilimapesa Hill
underground is processed at Plant 2 with artisanal tailings being processed at
Plant 1. Production exceeding 5,800 ounces is expected during FY 2018.
In addition to Kilimapesa, Goldplat will continue to seek out opportunities to
increase primary production from new sources. Goldplat recognises that growth
from recovery operations will be slower and more difficult than the potential
to grow the mining business. The current market presents many opportunities
for acquisitions of assets, joint ventures, partnerships and corporate deals.
Goldplat does not intend to enter into exploration, and will prefer to gain
interests in producing or near-production assets, preferably in Africa.
Conclusion
I would like to take this opportunity to thank our Goldplat employees,
advisors, fellow directors and shareholders for their support as we embark
upon our growth and diversification strategy in FY 2018. I look forward to
working with all of you as we implement this strategy. I would like to welcome
Matthew Robinson, Sango Ntsaluba and Werner Klingenberg who joined the
Goldplat Board during the year as Chairman, Non-Executive Director and Finance
Director respectively. I would also like to thank Ian Visagie, who has changed
his Board role during the period, now assuming the role of Executive Director;
he remains an integral part of the executive management team. I would like to
take this opportunity to thank him for the incredible contribution he has made
to Goldplat over the years as founder, CFO and acting CEO, and particularly
his immense contribution to the turnaround of the businesses over the past
couple of years.
Gerard Kisbey-Green
Chief Executive Officer
Financial Review
Profit from operating activities from continued operations for the year under
review increased by 140% to £2,910,000 (FY 2016: £1,212,000) due to strong
performance of both recovery operations. The Kilimapesa mine continued to
trade at a loss as the benefit from increased processing capacity was only
seen towards end of FY 2017, due to delays experienced during construction of
the processing plant.
Gold equivalent ounces sold on our own account increased by 24% to 34,112
ounces (FY 2016: 27,538 ounces), which is reflected in the 57% increase in
revenue for the year.
The increase in revenue was driven by higher recoveries achieved from the CIL
circuits at GPL and more contracts being settled by cash rather than
transferring of gold. A steady flow of gold bearing raw materials from
traditional suppliers, two large one-off contracts and increase in average
dollar price of gold for the year to US$1,258 per ounce (FY 2016: US$1,167 per
ounce) also contributed.
The Group increased gross profit by 73% from FY 2016: £3,008,000 to FY 2017:
£5,196,000, primarily as a result of increased revenue and continued focus on
reducing operational costs.
Administrative expenses from continued operations increased by 27% to
£2,286,000 (FY 2016: £1,796,000), primarily as a result of increased
activity in South America, Kenya and Ghana.
The exceptional three-year extension granted for the Nyieme Gold Project in
Burkina Faso on 29 September 2014 expires in October 2017. As there is no
intention to apply for a further extension or a renewal, as previous work at
the project found it to be of too small a scale to be viable, the development
costs of £955,000 have been fully written off and operations discontinued.
The loss from discontinued operations was £1,012,000, including the write-off
of development cost, which had no cashflow impact during the current period.
The operating currencies for the Group are South African Rand (ZAR) in South
Africa, Ghanaian Cedi (GHS) in Ghana and Kenyan Shilling (KES) in Kenya. The
average exchange rates used in the conversion of operating currencies in the
Statement of Profit or Loss and Other Comprehensive Income strengthened
against the Pound Sterling during the period under review.
The net finance loss from continued operations of £74,000 includes £85,000
interest on borrowings and finance liabilities. Due to the strengthening in
operating currencies against the US Dollar, a foreign exchange loss from
continued operations of £11,000 was incurred versus a foreign exchange profit
of £804,000 in FY 2016. The improvement of the operating currencies against
the Pound Sterling also resulted in a positive unrealised exchange translation
gain of £1,025,000 (FY 2016: £489,000).
The Group's capital expenditure for the year, including development costs,
amounted to £2,213,000 (FY 2016: £1,475,000) of which £1,409,000 was
expended to complete Stage one and two of the expansion of processing capacity
at Kilimapesa.
The expansion at Kilimapesa was primarily funded by an on-demand, revolving
pre-export loan with Scipion Active Trading Fund to the value of US$2,000,000.
Security on the drawn amounts has been granted over Goldplat Recovery (Pty)
Limited's tailings facility in South Africa, intercompany loan agreements,
contracts and proceeds of sale with gold refiners, and collection bank
accounts operated by GMR for that purpose. It is intended that the loan
granted in March 2017 will be repaid over 12 months from profits generated as
a result of the increased plant capacity at Kilimapesa.
After major capital investments at GPL over the last 2 years on a new elution
plant, wash plant and a milling circuit, capital expenditure reduced to
£372,000 (FY 2016: £818,000) and was focussed on maintaining current
circuits. One of the milling circuits was refurbished for £59,000 and
cyclones on one of the Rotary Kilns were replaced at a cost of £57,000.
Capital was incurred on the expansion of the sampling section through the
acquisition of blenders for carbon at a cost of £74,000. The balance of the
capital was spent on replacement of production vehicles (£92,000), an old
store (£28,000), upgrading of security and storage facility (£26,000) and
modification on the elution columns (£37,000).
A complete elution plant has been bought and shipped from South Africa to GRG
at cost of £67,000 and is planned to be erected and commissioned before
December 2017 at a total projected cost of £900,000. A further £60,000 was
spent on purchasing incinerators and a dryer for GRG.
A further £120,000 was expended on loading equipment for the new Plant 2 and
a production vehicle at Kilimapesa. Capital spent on the development of the
mine at Kilimapesa Hill was £157,000 (FY 2016: £110,000).
On 30 March 2017, Ashanti exercised its initial option to earn into the Anumso
Gold Project in Ghana under the terms of the option agreement between Goldplat
and Ashanti. An initial 51% share of Goldplat's interest will be earned
through expending US$1.5 million in the first 18 months, which includes a
six-month review period. At year-end Ashanti has not met the expenditure
condition, and the sale of 51% Goldplat's interest in Anumso has not been
recorded in the current period.
During the period Rand Refinery aligned its payment terms of its smelter
section to those of other international smelters, increasing its payment days
after agreement of assay to 90 days (previously 14 days). Delivery of dore
bars to Rand Refinery are still being settled within 7 days.
To mitigate the single refiner's risk, contracts have been signed with 3
additional refiners, two for refining of dore bars and one for processing of
carbon and other by-products. In addition to the flexibility the new contracts
have provided, they also increase the amounts of material that can be
delivered for refining or processing. The increased capacity assisted the
recovery operations to reduce its inventory days.
During the period GPL and GRG made use of a purchase contract and bill of sale
agreement with Auramet, to finance part of material en-route to refineries.
The balance of amounts received in advance at end of the period was
£6,334,000 (FY 2016: £1,107,000) and is secured against the receivable
balance it relates to. The proceeds from material pre-financed during the
fourth quarter was used to settle suppliers of this material.
The Group reported increased net cash resources of £2,650,000 as at 30 June
2017 (FY 2016: £2,056,000) whilst investing £935,000 (FY 2016: £1,645,000)
of internal generated funds into capital projects.
GPL - South Africa
Revenues of £25,066,000 (FY 2016: £15,223,000) were achieved and cost of
sales amounted to £21,083,000 (FY 2016: £12,504,000).
GPL continued to perform well and increased its operating profits to
£3,312,000 (FY 2016: £2,111,000).
The improved revenues and operating result in South Africa was built primarily
on the performance of the CIL circuits, and supported by the by-product
material received from the mines and a large one-off batch from a client in
Africa.
The South African subsidiary reported a net profit after tax of £2,420,000
(FY 2016: £1,777,000). The 36% increase in net profit after tax was partly
due to an 19.6% lower average Pound Sterling used to convert the South African
Rand results in FY 2017 versus the prior year.
GRG - Ghana
The Ghana Gold Recovery operation built on it strong performance of the
previous year and reported a profit after tax of £1,177,000 (FY 2016:
£437,000). The previous zero tax rate enjoyed as part of the Free Zone status
ceased in December 2016 and the Company is currently subject to a favourable
tax rate of 15%.
The increase in profitability is attributable to a steady flow of material
from our traditional suppliers, completion of a large clean-up contract
awarded by AGA Obuasi and material received from South America. GRG started to
see the benefit of the investment in South America during the period.
Kilimapesa - Kenya
The Kilimapesa gold mine reported a net loss of £1,100,000 (FY 2016: loss of
£711,000) for the year under review. An increase in unrealised foreign
exchange losses of £177,000 on intercompany payables contributed to the
increased loss. As in South Africa, the increased net loss was partly due to
an 14.2% lower average Pound Sterling used to convert the Kenyan Shillings
results in FY 2017 versus the prior year.
With the increase in capacity during the second half of the year, Kilimapesa
managed to increase revenue to £3,150,000 (FY 2016: £1,560,000) and turned
profitable towards the end of FY 2017.
Contingencies
We are pleased to report that the preliminary enquiry into the tax affairs of
Kilimapesa by the Kenya Revenue Authorities have been substantially finalised.
Of the original preliminary assessment of £1,288,540, £55,000 has been paid
and £51,000 still remains under dispute.
Trade and other receivables for the Group include a balance of £812,000 (FY
2016: £556,000) of Value Added Taxation receivable from the Kenya Revenue
Authority. Of the current balance £472,000 is older than 3 years. Despite
clear provisions in the Kenyan Legislation regarding the recoverability of
VAT, and two audits and continuous consultation with the Kenya Revenue
Authorities the balance due remain outstanding. Management is of the opinion
that there is no legal reason not to recover the balance due.
The process of investigation agreed with Rand Refinery was completed during
the period, but no agreement could be reached between the two parties. GPL
initiated legal proceedings against Rand Refinery on 11 September 2017 to
recover ZAR 13.5 million (approximately £792,000 at 30 June 2017) plus
interest due. Management remain confident that the balance will be collected.
Werner Klingenberg
Finance Director
Financial Statements
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2017
2017 £'000 2016 £'000
Continuing operations
Revenue 31,650 20,185
Cost of sales (26,454) (17,177)
Gross profit 5,196 3,008
Administrative expenses (2,286) (1,796)
Results from operating activities 2,910 1,212
Finance income 22 815
Finance costs (96) (39)
Net finance (cost)/income (74) 776
Results from operating activities after finance income 2,836 1,988
Taxation (860) (534)
Profit for the year from continuing operations 1,976 1,454
Discontinued operations
Loss for the year from discontinued operations (1,012) (46)
Profit for the year 964 1,408
Profit from continued operations attributable to:
Owners of the Company 1,348 992
Non-controlling interests 628 462
Profit for the year 1,976 1,454
Profit from operations attributable to:
Owners of the Company 336 946
Non-controlling interests 628 462
Profit for the year 964 1,408
Other comprehensive income
Items that may be reclassified subsequently to profit or loss: Exchange translation 1,025 489
Other comprehensive income for the year 1,025 489
Total comprehensive income for the year 1,989 1,897
Total comprehensive income attributable to:
Owners of the Company 1,361 1,435
Non-controlling interests 628 462
Total comprehensive income for the year 1,989 1,897
Earnings per share
Basic earnings per share (pence) 0.20 0.56
Diluted earnings per share (pence) 0.18 0.51
Earnings per share - continuing operations
Basic earnings per share (pence) 0.81 0.59
Diluted earnings per share (pence) 0.73 0.54
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2017
2017 £'000 2016 £'000
Assets
Property, plant and equipment 7,181 5,404
Intangible assets 8,707 9,726
Proceeds from sale of shares in subsidiary 1,424 1,271
Non-current cash deposits 201 160
Non-current assets 17,513 16,561
Inventories 8,962 7,747
Trade and other receivables 12,003 6,255
Cash and cash equivalents 2,650 2,148
Current assets 23,615 16,150
Total asRecent news on Goldplat
See all newsREG - Goldplat plc - Arrival of Generators
AnnouncementREG - Goldplat plc - Appointment of Executive Directors
AnnouncementRCS - Goldplat plc - Investor Presentation Reminder
AnnouncementRCS - Goldplat plc - Investor Presentation
AnnouncementREG - Goldplat plc - Interim results for six-months ended 31 Dec 2023
Announcement