JOHANNESBURG (miningweekly.com) – Aim-listed gold producer Goldplat on Tuesday said it had placed its Kilimapesa gold mine (KGM), in Kenya, on care and maintenance until the project’s economics could justify its reopening.

The Africa-focussed miner said in a statement that the closure of the project was in line with its strategic review, undertaken by CEO Russell Lamming, which focused on realigning Goldplat's business model to primarily focus on the strong cash-generating capabilities of its gold recovery operations in South Africa and Ghana, as well as the growth potential of this business across the continent.

Goldplat indicated that KGM had retrenched a further 50 employees and was currently maintaining the mining operation on a skeleton staff.  The processing plant would continue to process stockpiles of ore at the plant to cover the costs of the care and maintenance programme.

"It is always disappointing to suspend any operation, but it is of paramount importance that we make sure that all our operations are profitable and do not represent a drain on the resources of the rest of the company.

“We will continue to assess the viability of the operation and engage with all the stakeholders, including the local community and the Kenyan government to map the way forward,” Lamming stated.

The firm also decided to stop procurement of material for the carbon-in-leach (CIL) plant at its Gold Recovery Ghana (GRG) operation, in the town of Tema, and was in the process of closing the plant down.

This followed the completion of a review of the GRG operation, which revealed continued margin pressures sustained primarily from purchasing materials from artisanal and small-scale miners.

Goldplat indicated that the section would remain closed until material that met its margin criteria was sourced on a sustainable basis.

“GRG will look for alternative sources of CIL material that meet our margin criteria and continue discussions with the gold majors to build the traditional recovery business in West Africa," Lamming noted.

Notwithstanding, GRG continued to procure material to supply the Nzema mine, in Ghana.

Meanwhile, the company's South African gold-recovery operation continued to produce strong cash flows with fine-carbon processing having expanded significantly over the past six months, owing to new supply contracts recently signed with major South African gold producers.

New capital projects were also under way to continue increasing gold-recovery production. This included the recent commissioning of an additional tailings retreatment CIL plant in March and the purchase of a second rotary kiln, which was on target to be commissioned in July and expected to increase the processing of high-grade wood chips.