Aim-listed Goldplat has reported that its two recovery operations – in South Africa and Ghana – achieved a combined operating profit of £2.09-million for the quarter ended September 30.

The company notes that the finance cost and foreign exchange gains incurred in the quarter under review mainly related to trading activities and resulted in a combined profit before tax excluding listing and head office costs of £2.37-million.

The Ghanaian operation, which benefitted from an increasing gold price, achieved a profit before tax for the first quarter of £1.13-million. This includes a foreign exchange gain of £282 000 as the Ghanaian cedi weakened against the dollar.

The South African operation achieved a profit before tax for the first quarter of £1.25-million, mainly owing to an increase in material supply from South America and a one-off transaction with a local supplier, improved cost management and increasing gold price.

Goldplat says an interim dividend of 0.1171 p a share will be paid to shareholders on December 19, with the record date being December 5 and ex-dividend date December 4.

The company says it is the intention of the board to assess the distribution of dividends on a quarterly basis going forward.

The company reports that cash balances in the group remained strong at £2.2-million at the end of the first quarter.

Goldplat explains that the cash balances will be used to manage working capital requirements, capital expenditure and to pay the dividend which amounts to £200 000.

GOLD RECOVERY GHANA

As a result of the business model changes announced previously, Goldplat reports that Gold Recovery Ghana (GRG) is currently the only local gold by-product beneficiation provider in Ghana.

The company explains that it invested £1.25-million in the prior financial year to increase capacity in the short term, including plant capacity and to increase the recovery of gold from concentrate on site.

Goldplat says the local Ghana beneficiation requirement has impacted on all aspects of its business and it continues to review, update and change its process and procedures to manage risks and maximise margins.

The company says its objective is to improve and enhance its current solution so that it is able to provide a niche solution to customers outside Ghana at their mine site in future, who owing to current country regulations may not be able to export material to its premises in Ghana.

GOLDPLAT RECOVERY

Goldplat notes that production at its South African recovery operation during the first quarter improved with the addition of material from South America and a one-off project with a local supplier. The company says it continues to drive initiatives to improve recoveries.

It notes that strict cost control measures have been implemented to conserve cash in the short term.

The company says its focus remains on increasing its by-product market share in South Africa as it expects reductions in by-products received from current mining operations owing to changes in their production profile.

RETREATMENT OF THE TAILINGS STORAGE FACILITY

Further, Goldplat says engagements with several parties for the tailings storage facility (TSF) project in South Africa continued during the first quarter.

The company explains that the processing of the old TSF remains dependent on the approval of the water use licence by local authorities and approval from third parties in certain areas for the installation of a pipeline to the DRDGOLD processing facility.

The company adds that it also still needs to agree commercial terms with DRDGOLD, which will be based on testwork and analysis which is ongoing.

Once approval is received for installation of the pipeline, recovering any of the value within the TSF remains dependent on getting the pipeline installed to DRDGOLD Ergo facility.

Goldplat notes that capital will be required for the pipeline and upgrading part of the DRDGOLD facility.

“The application and approval of the water-use licence for the pipeline remains outside of our control, which has and will continue to have an impact on timelines which, as we have found in the past, are very difficult to estimate with any accuracy.

“We have therefore refrained from providing further estimated timelines. However, the processing of the TSF remains a key focus and priority,” the company says.

Goldplat says DRDGOLD continues to assist it with determining the best potential processing solution and has made adjustments in certain applications to speed up the process.

GOLD RECOVERY BRAZIL

Goldplat says it has spent close to £100 000 of the planned spend of £200 000 on the new plant to date.

It notes that spiral equipment has been ordered and is expected to arrive in Brazil in November. The project is expected to be completed by December.

The company says sourcing in South America was strong during the quarter and continues to be the focus of the local team.

Goldplat CEO Werner Klingenberg says the group had a strong operating quarter supported by the high gold price and good supply from South America and one-off supply in South Africa.

“As stated previously, our operations remain sensitive to continuous supply of gold bearing material, which has been impacted by the decree on export of gold-bearing by-products in some West African countries and changes in primary gold operations in South Africa,” he says.

In South Africa, Klingenberg says, the company is seeing positive results on gold and platinum group metal sourcing activities and continues streamlining the operations to respond to lower visibility of supply of material.

Notwithstanding the lower visibility of supply, he says the company is confident that it will increase market share in South Africa as well as the supply of by-products in the next financial period.

In Ghana, Klingenberg notes that the team continued its implementation and management of several new processes and procedures to focus the business on local beneficiation and manage engagement with mining clients and authorities regarding the changes and requirements.

“I am pleased to announce the declaration of another dividend and the aim to establish a steady and regular return to shareholders.

“Reflecting the uneven nature of the group’s revenues, we plan to calculate and, subject to the group’s cash requirements, return value to shareholders either through dividend or share buy-backs on a quarterly basis going forward,” he says.

Klingenberg notes that the board remains confident in the fundamentals of the business and continues to progress strategic initiatives to improve long-term performance and enhance shareholder value through establishing sustainability in Ghana after the changes in the business model, progressing the approval of the TSF pipeline, increasing market share in South Africa and expanding in Brazil.

“This should provide stability in working capital requirements and ultimately the continued return of cash to shareholders.”