Aim-listed Goldplat’s two gold recovery operations in South Africa and Ghana achieved a combined operating profit of £1.9-million for the quarter ended September 30 – the first quarter of the company’s 2023 financial year – representing a 38% year-on-year increase.

This was a continuation of the strong combined operating performance of the previous quarter, ended June 30.

The Ghanaian operation continues to perform well as a result of the steady supply of material and achieved an operating profit for the period of £966 000.

The South African operations continued to produce steady returns from the assortment of material processed through a variety of plants. The operations were impacted by intermittent electricity cuts by State-owned Eskom, but still achieved an operating profit of £976 000.

Goldplat’s returns are impacted by changes in reporting currencies for each subsidiary and the dollar, as well as the gold price.

During the quarter, the group operating entities’ operational results benefited from the weakening of the reporting currencies, the Ghanaian cedi and the South African rand – which increased operating results by about £500 000.

As the company receives payment for the majority of its revenue on pre-financing contracts, foreign exchange losses of about £500 000 incurred during the period have not been reflected in the operational results above.

Taking account of these exchange losses, operating profit for the recovery operations for the quarter was £1.4-million.

Although Goldplat processes an assortment of material throughout the group from different clients and on different contracts, making use of a range of plant and equipment, it says it has been delivering profitable, albeit fluctuating, operational returns, for the last 11 quarters, which is in line with management’s focus on ensuring sustainable cashflow and profitability.

Meanwhile, South African gold producer DRDGold has entered into an agreement for Goldplat’s South African operations – Goldplat Recovery (GPR) – to remove low-grade carbon contaminated soils from its premises, on a cost per ton basis, which should provide about five years of additional feed for its larger carbon-in-leach (CIL) circuit.

The CIL circuit currently contributes between 20% to 30% of the South African operation’s production. This increases the availability of material for this circuit to more than seven years and will form a good base for the business going forward, Goldplat says.

The nature of these materials to be removed from DRDGold will be variable, in terms of the gold grade contained and the recoverability of the gold contained through Goldplat’s circuits. The analysis and processing of these materials, to date, has indicated that it will be viable to remove and process at current cost and price parameters.

DRDGold is also assisting GPR to get approval for the construction of a pipeline to one of its plants. The pipeline will provide GPR with the ability to process the existing tailings storage facility (TSF) material, which comprises a Joint Ore Reserves Committee resource of about 82 000 oz of gold, at a DRDGold processing facility.

The negotiations of the terms and conditions for processing the TSF material at a DRDGold processing facility still need to be finalised.

Goldplat says the approval of the pipeline by authorities is taking longer than originally expected, but believes this will be received, at the latest, by June 2023.

Despite numerous issues experienced during the commissioning of the platinum group metals (PGMs) flotation plant in South Africa, which has resulted in Goldplat not being able to run the plant optimally to date, it says it is encouraged with the progress made and with the increased flexibility the flotation plant will provide in the type of material it can process.

The construction of the new TSF will start in the quarter ended December 31, and Goldplat aims to have this completed by the end of its 2023 financial year.

Meanwhile, Goldplat has identified, and to an extent secured, material for processing in the Economic Community of West African States (Ecowas) region; however, the export and processing of these materials remain dependent on approval from government officials.

“We continue our engagement with the governments and mines in the Ecowas to agree processes and controls on the export of gold-bearing products and remain encouraged by the value we have identified that we can offer in these countries,” Goldplat says.

The majority of material processed in Ghana during the quarter was from clients inside the country.

Further, Goldplat continues its expansion into South America on a measured basis, with limited capital allocated as yet.    

During the period, the group incurred capital costs of £630 000 and is estimating that it will need to spend a further £1.5-million during the next 12 to 18 months on repairing and maintaining current operations, and on improved lining of the new TSF and improving the environmental impacts of its current processes.

Cash balances in the group remained strong at £2.9-million at the end of the quarter.

“I am pleased to announce the progress we have made in achieving our key strategic deliverables, generating continued profitability from the processing of previously mined gold and PGM materials, increased visibility of future earnings through increasing our resources and forming strategic relationships with other key industry participants, finding a final deposition site and processing plant for our existing TSF and getting approval for the construction of a new TSF.

“We continue to invest time into identifying different methods of processing materials containing various elements in environmentally friendlier methods to become a key service provider to the mining industry to beneficiate, process and dispose of their by-products and waste,” comments CEO Werner Klingenberg.