Aim-listed Goldplat’s gold recovery operations in South Africa and Ghana achieved a combined operating profit for the third quarter, ended March 31, of £1.6-million (excluding listing and head office costs and foreign exchange losses), a 10% increase on the operating profit for the third quarter in the previous financial year.

During the period, the two recovery operations achieved a combined profit before tax of £890 000, after they incurred £430 000 in interest costs and £350 000 in foreign exchange losses, which mainly related to trading activities.

The third-quarter performance of the South African operation Goldplat Recovery South Africa continued to be impacted on by a reduction in supply from current mining operations and, to a lesser extent, by electricity supply interruptions.

The South African operation achieved an operating profit of £119 000.

The group continued to see a reduction in by-products received from current mining operations in South Africa owing to changes in their production profile.

The focus therefore remains on increasing the company’s by-product market share in South Africa and to gain access to neighbouring countries.

The impact of electricity cuts and infrastructure-related issues continues to reduce, with only 6% of the total days available in the quarter lost, compared with the about 7% in the second quarter and 23% lost in the three quarters before that.

The generator project was implemented and commissioned by the end of April and fully ready to mitigate any power interruptions in the future, Goldplat highlights.

With lower recoveries from low-grade soils (referring to gravity concentrates), 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.

During the quarter, total capital of £490 000 was spent on the tailings storage facility (TSF), generators and other equipment. The acquisition of the generators to the value of £750 000 will be capitalised in the fourth quarter.

Goldplat estimates that it will require a further £450 000 to be spent on repairing and maintaining current operations and improving the environmental impacts of its current operations. The company anticipates that this will be funded from internally generated cashflow.

With the new TSF having been commissioned, the company is focussing on the work required to begin the processing of its old TSF at a DRDGOLD processing facility.

Meanwhile, the Ghanaian operation Gold Recovery Ghana (GRG) experienced an “exceptional quarter”, achieving an operating profit of £1.5-million, driven by strong supplies in Ghana and South America.

GRG received the benefit during the period from good supply of material during the first half, with consignments treated from Ghana, Côte d’Ivoire and South America.

During the quarter, Goldplat started producing gold from 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.

Some West African countries still have an embargo on the export of gold concentrates not in a dore or bullion form, Goldplat points out.

Meanwhile, the group’s cash balances increased from the £1.7-million in the second quarter, with increased sales in Ghana, and remains strong at £2.4-million.

The cash balances will mainly be used to reduce the requirement for trade finance in the medium term, the repayment of intercompany loan balances, the repayment of debt and normal working capital and capital requirements.

“The group continues to benefit from engagements and marketing efforts over the last five years and we aim to build on the momentum into West Africa and South America, although the regulations governing the export of gold bearing by-products out of certain regions remain a challenge,” says CEO Werner Klingenberg.

“The requirements and approval of the water use license for installation of pipeline to DRDGOLD remain a major focus for the group, while we continue to strengthen our relationships, review various cost elements and increase market share in a declining gold market in South Africa,” he adds.