Goldplat plc / Ticker: GDP / Index: AIM / Sector: Mining & Exploration

7 February 2024

Goldplat plc

('Goldplat' or the 'Company')

2^nd Quarter Operating Results update for period ended 31 December 2023

Goldplat Plc, (AIM:GDP) the AIM listed Mining Services Group, with international gold recovery operations located in South Africa and Ghana, servicing the African and South American Mining Industry, is pleased to announce an operational update for the 2^nd quarter ended 31 December 2023 ("Q2"), of the current financial year.

Ghana experienced an exceptional Q2, achieving an operating profit of GBP1,820,000 (GBP1,026,000  Q2 2023), driven by strong supplies during the first half of the current financial year and the sale of inventory that built up as a result of our inability to export whilst our export license was finalised during the 2^nd half of the previous financial period.

South Africa's Q2 performance continues to be impacted by electricity cuts and a reduction in by-product supply from current mining operations. As a result of delays experienced at the smelter in Europe in the previous financial year, South Africa's Q2 results were further materially impacted as an unusually large quantity of material for processing through gravity circuits was held in stock at the end of June 2023; this material contained a lower percentage of gold than estimated. While the percentage of contained gold varies from month to month, the unusually large quantity of material held in inventory means that there was a disproportionate effect on Q2 with a significantly lower quantity of gold than expected recovered from our gravity circuits. This resulted in an operating loss of GBP315,000 for the quarter (GBP356,000 operating profit Q2 2023).

Even with the losses in South Africa, the combined operating profit for both operations for Q2 was GBP1,505,000 (GBP1,382,000 Q2 2023) and for half year ("H1") was GBP3,368,000 (excluding listing and head office costs, interest and foreign exchange movements), compared to the combined operating profit of GBP2,813,000 for H1 2023.

The following events have contributed to the Q2 operating results:

Gold Recovery Ghana

·      As indicated above, Ghana received the benefit during Q2 from good supply of material during H1, with consignments treated from Ghana, Côte d'Ivoire and South America. Our focus remains on building on the momentum in South America and Côte d'Ivoire and opening other jurisdictions in West Africa.      

·      Towards the end of Q2 we started to commission the lower grade milling, gravity and flotation circuit which will assist in extracting value from large volumes of lower grade fine carbon material received in Ghana.

Goldplat Recovery (Pty) Ltd

·      The South African operation lost a total of 7 operating days, 7% of the total days available in the quarter, compared with the circa 23% lost in the previous 3 quarters, due to electricity cuts and infrastructure related issues. The reduced impact of electricity cuts continued in the first month of Q3 ("January 2024") but the risk of this increasing to the same levels experienced in the previous 3 quarters remains.

·      Due to the continued uncertainty of electricity supply in the medium term and as announced on 31 May 2023, we decided to invest in diesel generators which will be able to sustain operations in South Africa during electricity cuts. During January, it became apparent that due to miscommunication between the supplier of the generators and the manufacturer, the shipping of the generators has been delayed and the project will only be completed in Q4 of the current financial year.

·      Apart from the circa GBP600,000 shortfalls experienced on the gravities, we continued to see a reduction in by-products received from current mining operations due to changes in their production profile. The focus therefore remains to increase our by-product market share in South Africa and to gain access to neighbouring countries.

·      The visibility of supply of low-grade soils for our milling circuits remains strong, with more than 18 months of material for processing on site and more under contract.   

·      With lower recoveries from low grade soils (referring to gravity concentrates) and reduction in by-products received and increases in cost, the various cost elements in South Africa will be reviewed and revised in the short term to conserve cash.

·      With the new TSF being commissioned, we are focussing on work required to begin the processing of our old tailings facility which has a JORC Resource of 81,959 ounces (Table 1), at a DRD Gold process facility.

·      The processing of our old TSF remains dependent on:

o  The approval of the water use license over certain areas for the installation of a pipeline to the DRD Gold process facility; The application process was subject to completion of engineering designs which were finalised in December 2023. However, areas were identified where the pipeline route will require to be changed from the current servitude. These changes have resulted in changes in timelines, and we will keep the market updated on when we have clarity of what the new timelines will be;

o  These changes may affect the way we process the TSF and how this affects the returns we can generate. DRD Gold and Goldplat Recovery are currently in the process of evaluating the different variables that will impact the processing of the TSF, as well as their commercials impact; this process will remain subject, inter alia, to the finalisation of the water use license.

·      We estimate that we will require a further GBP500,000 (not including the investment of GBP750,000 to be spent on generators over the next 18 months), to be spent on repairing and maintaining current operations, on completing the TSF and improving the environmental impacts of our current operations. The company anticipates this to be funding from internally generate cashflow.

Our cash balances in the group increased from Q1, with increased sales in Ghana, and remains strong at GBP1,707,000 (GBP1,350,000 Q1 2024).    

Werner Klingenberg, CEO of Goldplat commented: "This was a bitter-sweet quarter with good results in Ghana alongside losses on estimated gold receivable in South Africa. I'm confident that the team has implemented the necessary controls to eliminate these losses going forward.

Ghana continues to benefit from engagements and marketing efforts over the last 5 years and we aim to build on the momentum into Africa and South America.

The requirements and approval of the water use license for installation of pipeline to DRD Gold remain a major focus for the Group, whilst we continue to strengthen our relationships, increase market share in a declining gold market in South Africa and leverage our strength and capabilities through partnership into other precious metals and commodities."

For further information visit www.goldplat.com, follow on Twitter @GoldPlatGDP or contact:

Table 1

Mineral Resource Estimate of the TSF, South Africa:

100% attributable to the Company.

The Tailings Mineral Resource Estimate was announced in accordance with the JORC Code (2012) in a press release on 29 January 2016. Mark Austin of Applied Geology & Mining (Pty) Ltd was the Competent Person responsible for that announcement. The Company confirms that all material assumptions and technical parameters underpinning the Resource Estimate continue to apply and have not materially changed, and it is not aware of any new information or data that materially affects the estimates.

The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.