Gold producer Goldplat on Monday reported a return to an operating profit of £2.21-million for the six months ended December 31, compared with an operating loss in the six months ended December 31, 2018.  

According to the group’s interim results for the period, profit, excluding unrealised intragroup foreign exchange losses on intercompany loan balances, was £1.03-million. 

Goldplat had intercompany loans denominated in dollars, which differs from the parent company and its various subsidiaries’ reporting currencies. The strengthening of the pound and the weakening of the cedi contributed the most to the group's unrealised intragroup foreign exchange loss for the period of £333 000.

With the increase in profits, the group also reported an increase in taxation for the period to £918 000.

Goldplat’s assets include gold recovery operations in South Africa and Ghana, which recover gold from by-products of the mining process, and the Kilimapesa gold mine, in Kenya, currently under care and maintenance.

The South African operation performed strongly and achieved an operating profit of £2.65-million. A pre-treatment facility had been added at a cost of £70 000 which enabled the company to treat lower-grade material with a higher degree of contamination.

Performance at the Ghana operation improved as the company's marketing and sourcing efforts gained momentum and achieved an operating profit of £151 000.

Operating losses at Kilimapesa had been reduced, year-on-year, to £301 000, while the group had continued to hold discussions with funding partners to recapitalise this asset.

Goldplat noted that its continuing focus on operational excellence was enhanced by a higher gold price in the period.

Cost reductions and improved operational efficiencies remain areas of focus for Goldplat.

Improvement in plant operational efficiencies in South Africa not only reduced costs but improved gold recoveries. Some of the cost savings had been invested into material sourcing initiatives and increasing physical security in South Africa.

The tailings storage facility (TSF) in South Africa has been structurally supported at a planned cost of £250 000 of which £123 000 has been spent in the six months under review.

This expenditure will increase the life of the TSF while Goldplat investigates the design of a new TSF. 

POST-PERIOD END

Subsequent to period-end, the company made progress on a number of matters.

Firstly, the construction of the pre-treatment facility at one of the carbon-in-leach circuits at Goldplat Recovery Limited (GPL) has been completed and the facility is being commissioned, with all indications being that it has increased, as planned, the gold recoveries and margins of the large contaminated stockpile on site, improving visibility of material supplies for the next 18 to 24 months.

Secondly, the construction of a buttress around the TSF has been completed, structurally improving the TSF and extending the life of the TSF by 12 to 18 months.

Lastly, an application has been filed for a new tailing's facility, at GPL, adjacent to Goldplat’s current facility.

OUTLOOK

Goldplat noted that the progress made on key initiatives to increase long-term visibility of earnings in the recovery businesses, specifically improved recovery from lower-grade contaminated material and strengthened relationships within the mining industry, were encouraging.

Although monthly production levels are still dependent on sourcing of quality material, the company is confident that at current higher gold prices, it will remain profitable for the remainder of the financial year.