JOHANNESBURG (miningweekly.com) – JSE- and Aim-listed gold producer Goldplat delayed the plant expansion programme at its Kilimapesa gold mine, in Kenya, owing to what it called continued uncertainty regarding mining legislation in that country and operational difficulties at the mine. 

The plant expansion was aimed at eventually increasing gold production to 10 000 oz/y.

The company reported on Friday that the lack of processing capacity and the subsequent increase in operational costs, as a result of delays in the additional plant construction, had resulted in losses being incurred at Kilimapesa during the first half of the 2013 financial year. 

Goldplat said it had engaged with and continued to have strong relations with the Kenyan government and was confident of a favourable outcome for all stakeholders, enabling the planned plant expansion at Kilimapesa to restore operations to profitability.

“The delays in the plant expansion and subsequent losses we are experiencing at Kilimapesa are disappointing; however, these issues are being addressed and we are confident of a resolution with the Kenyan government,” Goldplat CEO Russell Lamming said in a statement.

He emphasised that robust results from the company’s gold recovery operations in South Africa and Ghana were expected to cover the losses at Kilimapesa, leaving operating profits for the first half of this year in line with those of the comparable period in 2012.

The South African operation had performed particularly well in what had been a difficult period for mining companies in the country.

The company reported that the operational flexibility derived from its significant stockpiles of raw materials located at the South African operation reduced the negative impact of the transport and mine strikes during the period. 

Goldplat's second recovery operation, located at the free port of Tema, in Ghana, had performed strongly in the first half of the year, although margins had been squeezed through the increase in procurement costs related to the company's toll treatment contract, where some materials were processed off-site.