Goldplat continued profitability in both South African and Ghanaian operations in Q1

Goldplat plc (LON:GDP), the AIM quoted gold producer, with international gold recovery operations located in South Africa and Ghana and a held-for-sale mining operation in Kenya, has announce an operational update for the first quarter ended 30 September 2020.

Group

·    The Group maintained good operating results with the South African operations achieving a profit for the Q1 of £1,123,000 (Q1, September 2019 – £1,074,000) and the Ghanaian operations a profit of £280,000 (Q1, September 2019 – £23,000).

·    The initial results from a pilot plant test on Tailings Storage Facility (“TSF”) material has been encouraging and is bringing us closer to finalising a detailed plan for the processing of TSF.

·    Significant progress has been made in the sourcing efforts in the Group, with a constant flow of material received in Ghana, a new contract signed in South America and positive progress made in securing more material in Mali as detailed below.

·    Similarly, in South Africa, material sourced for our surface material and woodchip circuits exceeded production capacity, maintaining visibility of stock on site and on contract to more than 24 months.

·    The relationships with the plants supplying other by-products remain in good standing, with constant flow of by-products, despite the challenges of Covid-19.

·    Progress is being made on obtaining final approval for extending our current TSF and an additional £90,000 will be incurred to allow for the increased volumes that can be deposited until the extended TSF has been established.

·    The cash requirement for Kilimapesa has been reduced with the signing of a binding term sheet with Mayflower as announced previously.

Goldplat Recovery (Pty) Limited (“GPL”)

·    The South African operation achieved an operating profit for the Q1 of £1,123,000 (Q1, September 2019 – £1,074,000).

·    During Q1, part of our plant facility was modified to improve the processing of the TSF material on a production scale. The initial results are encouraging and exceed the results from initial lab scale test work, and we will continue measuring performance going forward. The aim is to build up a data base on production and recoveries from representative areas on the TSF using different parameters in the plant sufficient to support the investment required to reprocess the TSF material. 

·    One of our producing mills has been allocated to this modified plant and as a result 1kg per month of gold production was sacrificed during the period. The plant was commissioned towards end of September and it is expected that the TSF material processed from it is expected to exceed the 1kg sacrificed by repurposing the mill.

·    The company continued improving its the largest carbon-in-leach circuit to enable the processing of lower grade contaminated material. During the period we installed an upgraded screening unit, sacrificing 3kg of gold production during the installation phase. With the modification on the underground circuit completed, the full benefit of this improvement should be reflected during the 2nd quarter.  

·    Additional costs of £50,000 were incurred under Covid-19 procedures introduced to transport our staff in a hygienic and safe manner to and from work. With South Africa moving to lockdown level 1, these measures have been reduced. We are glad to report that all employees who tested positive for Covid-19 have recovered and are back at work and we are currently unaware of any cases in our workforce, which is constantly monitored.

·    Surface material and woodchips sourced during Q1 exceeded production capacity, increasing the feed material on site and contracted to more than 24 months. We received good volumes of by-products from a number of clients.

·    The processing of the current TSF at the required scale still remains dependent on securing a final deposition site and a plant. Management still believe that processing the TSF through an existing third-party facility should create most value for shareholders and reduce the initial capital requirement.

·    The application to extend our current TSF for deposition of current production is progressing and indications from authorities are that we should have feedback towards the end of January 2021. A further GBP90,000 will be spent on managing our current facility until a larger facility can be established at an estimated build cost of GBP700,000.

·    Our extensive exploration and testing campaign to secure more long-term feed material for the carbon-in-leach circuits is continuing and we spend close to £75,000 during Q1 on various test work. This is in line with GPL’s strategy to ensure long term visibility of supply, profitability and growth.

Gold Recovery Ghana Limited

·    The Ghanaian operation maintained its improved production levels achieved during the previous financial period and achieved an operating profit for the first quarter of £280,000 (Q1, September 2019 – £23,000).

·    The sustained and improving operating results is due to a constant flow of material received from clients in Ghana, Mali and South America.

·    During the quarter we have made progress on our strategic focus of securing more material from West Africa. We are currently finalising terms on a large batch of material from a mine in Mali but this remains dependent on receiving export approval from the government of Mali.

·    We also signed a new contract with a company in South America, with material currently being shipped and due to arrive in Ghana during the second quarter.

·    The application for a license to procure and toll-treat tailings material in Ghana has been delayed by the Covid-19 lockdown but we are pleased that engagement on this has re-started.

Kilimapesa (Pty) Limited

·    As previously announced, a binding conditional term sheet for the sale of Kilimapesa was signed with Mayflower during the quarter, with completion of the transaction subsequently extended until 31 December 2020. 

·    Operating losses at Kilimapesa for the first quarter were £232,000 (Q1, September 2019 – £127,000), of which £118,000 related to depreciation and amortisation.

·    The operations started processing artisanal tailings material from the area on 22 August 2020 largely financed by Mayflower.

·    The Group does not expect to contribute any further cash to Kilimapesa before completion of the proposed sale.

Werner Klingenberg, CEO of Goldplat commented: “I am pleased by the continued profitability of the recovery businesses, and encouraged by strong performance in Ghana during the quarter. Additionally, I believe we can achieve an even stronger performance from the operation in South Africa and I am confident that the changes made to the circuits during the 1st quarter will return positive results during the remainder of the financial period.

The progress made on our planning for processing the TSF is positive and I’m confident that the pilot plant data should assist us in accelerating the processing of the TSF.

The Covid-19 pandemic remains a risk for the business and we will maintain procedures to protect the health and safety of all our people and the continuity of the business.”

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Goldplat plc (LON:GDP), the AIM quoted gold producer, with international gold recovery operations located in South Africa and Ghana and an a held for sale underground mining operation in Kenya, has provided an update on the sale of Kilimapesa.