Aim-listed gold producer Goldplat achieved a profit from operating activities of £2.5-million for the financial year ended June 30.
While this is lower than the £2.9-million profit reported for the prior financial year, chairperson Matthew Robinson on Wednesday said this was a positive result which underpinned the “robustness” of Goldplat’s business model.
Production for the year decreased by 17% year-on-year to 35 431 gold-equivalent ounces.
Albeit at higher margins when compared with the 2017 financial year, production at both Goldplat Recovery (GPL), in South Africa, and Gold Recovery Ghana (GRG) were lower, whereas production at Kilimapesa Gold, in Kenya, increased by more than 50%.
GPL performed strongly during the year with significantly increased operating profits, while the Ghanaian and Kenyan operations faced challenges, which impacted on the bottom line numbers, the company reported on Wednesday.
GPL produced 23 567 oz of gold and gold equivalent during the financial year under review, with 21 059 oz produced for its own account and 5 219 oz transferred to clients.
GRG operated under capacity during the period under review, as the operation experienced a period of shortage of suitable material for processing.
However, Robinson highlighted that a number of new contracts were in the pipeline for the company, which Goldplat expects to positively impact on production and, accordingly, profitability moving forward.
GRG, meanwhile, produced 6 752 oz of gold during the year and sold 8 010 oz.
The decrease in production is primarily a result of a large, one-off contract being processed during the 2017 financial year, with the sales figure for 2018 financial year reflecting sales of gold produced from this contract.
At Kilimapesa Gold, in Kenya, unseasonably high rainfall, disruptions from elections and production hold-ups presented issues as the company seeks to transition to steady-state mining and processing.
Kilimapesa increased production by 50% to 5 112 oz of gold during the year, all of which were sold during the period.
The Stage 2 expansion at Plant 2 was completed early in the financial year and the Stage 2 mill throughput target of 120 t/d has been exceeded with feed rates of 180 t/d being regularly achieved.
In May, in line with previously announced plans, processing at Plant 1 was stopped, reducing overall production costs and allowing gold recovery to be optimised.
Additionally, the company is seeking an investment partner at Kilimapesa to assist it in realising the full value potential of the mine moving forward.
FINANCIAL REVIEW
Goldplat achieved a 6.8% increase in revenue to £33.7-million, while profit for the year from continuing operations was £506 000, a decrease from £1.9-million last year, reflecting higher charges for finance costs of £722 000 and for taxation of almost £1.3-million.
Profit from operating activities, including a bad debt write-off of £320 000 decreased by 13.8% to £2.5-million.
Strong performance continues to be reported at GPL with a 10.7% increase in profit from operating activities to £3.6-million.
GRG reported a 51% decrease in profit from operating activities to £646 000.
Kilimapesa reported a net loss of £892 000 for the year.
Robinson said the company had made good progress in developing global opportunities for sourcing material for processing in the company’s precious metal recovery facilities, as the company continues to enhance its processing facilities in order to profit from these operations.
“We have also run a lean operation when it comes to administrative expenses, after adjusting for a one-off bad debt provision for the year. As a result, I believe our foundations for growth remain strong,” he stated on Wednesday.
Robinson remains optimistic about Goldplat’s prospects for the 2019 financial year.
The company’s share price on the LSE, however, fell by 10% on Wednesday.