Goldplat
The new Kilimapesa plant was officially opened by Cabinet Secretary for mining in Kenya, Honourable Dan Kazungu, in February 2017.
A year since initiating an operational break-even and return-to-profitability strategy Goldplat is already reaping the rewards.
Mining Review Africa’s senior deputy editor, Chantelle Kotze.

Chantelle Kotze interviews Goldplat CEO Gerard Kisbey-Green about the achievement of this significant endeavour.

Located in south western Kenya, Kilimapesa is Goldplat’s only primary gold producing mine in its portfolio – the rest of the portfolio, and its core business, being precious metals recovery from by-products of mining operations.

Kilimapesa consists of narrow, high-grade quartz veins, is operated as an underground mine, and has a JORC-compliant mineral resource of 8.7 Mt grading at 2.40 g/t gold for 671 446 oz gold at a cut-off of 1 g/t.

Since pouring first gold in 2012, the operation has been constrained by processing capacity, having produced 932 oz of gold in the six month period ended 31 December 2015 and 1 190 oz in the six month period ended 31 December 2016.

When comparing gold output with the operational expenditure, Kilimapesa has been a loss making operation for a long time, says Kisbey-Green.

Goldplat aims to double gold production at its Kilimapesa mine on completion of its return-to-profitability strategy.

As a result of this, the Goldplat board has for several years contemplated options for Kilimapesa, including shutting it down, finding a joint venture partner or investing in expanded processing capacity and making a success of the operation.

While nothing had transpired from on-going discussions with several potential joint venture partners and buyers over the years, a decision was taken by Kisbey-Green and Ian Visagie, the current CFO and a founder of Goldplat, to make the operation work. “A turnaround strategy was submitted to the board and board approval was granted,” Kisbey-Green enthuses.

Increasing processing capacity, and in turn profitability

Goldplat then set in motion its strategy which would increase processing capacity at Kilimapesa in order to bring the operation to profitability. This entailed upgrading the processing capacity at the mine – as the current operation is constrained by size and efficiency of the existing processing facility.

“This strategy was aimed at crystallising value from its current mining and exploration portfolio in addition to its recovery operations,” says Kisbey-Green.

“We didn’t have to upscale dramatically to make it profitable, but we did it cost effectively and used what resources we could internally throughout the entire Goldplat group,” he explains.

The turnaround strategy entails a three-stage approach aimed at doubling production from Kilimapesa to around 6 000 tpm on completion of the strategy.

Goldplat
Goldplat initiated a turnaround strategy at Kilimapesa in FY2016 which entails a three-stage approach aimed at doubling production at the mine.

Stage 1 of the strategy at Kilimapesa saw Goldplat relocate an existing carbon-in-leach (CIL) processing plant from its gold recovery operation in Ghana, to the Kilimapesa mine in Kenya.

Initial commissioning of stage one of the processing plant (which does not include the crusher circuit) at Kilimapesa was completed on 6 February 2017 and the plant was officially opened by the Cabinet Secretary for mining, Kenya, Honourable Dan Kazungu, on 15 February 2017.

In order to be able to successfully continue with processing operations while the front end crushing circuit was being installed and commissioned during stage two, Goldplat stockpiled finer material during 2016 which would allow it to continue to process ore during this time.

The new CIL plant will enable Kilimapesa to slightly increase ROM production to 3 000 tpm, including the old plant, while more importantly allowing increased flexibility.

Kisbey-Green notes that the Stage 1 upgrade, if production is maintained at the current run rate of 60 tpd (annualised 4 600 oz of gold including the old plant output) should enable Kilimapesa to break even once producing to capacity.

Subsequent to this, Stage 2 of the project, which is currently underway, entails fabrication and installation of three additional CIL tanks, as well as the installation of the crusher circuit. This stage is expected to be completed by the end of May, 2017.

“Once stage two is completed the new plant is expected to process 120 tpd at an annualised rate of roughly 4 500 oz of gold. The old plant will continue to produce roughly 2 300 ozpa of gold as long as tailings capacity exists, resulting in a potential total production rate of 6 800 oz of gold per year,” Kisbey-Green explains.

“Part of phase two will also necessitate the acquisition of extra mining equipment,” he explains, adding that the mining rate at Kilimapesa Hill will be increased in line with the extra available processing capacity.

Stage 3, planned to significantly increase production, will potentially be undertaken during the first half of 2018, to bring total processing capacity to 6 000 tpm. This will entail the installation of a second mill, three additional CIL tanks and an additional thickener.

Investment in the new processing facility at Kilimapesa was largely been funded from within Goldplat’s subsidiaries. A $2 million loan facility with Scipion Active Trading Fund, entered into in March will initially be used to complete stage two of the processing plant expansion and to repay the capital made available to it from group subsidiaries.

Mining at Kilimapesa Hill

The Kilimapesa operation includes an exploration permit as well as a mining licence that covers the Kilimapesa Hill area. Underground mining is carried out using conventional, labour-intensive methods with ore-processing comprising crushing, milling, a CIL circuit, elution and bullion production.

Kisbey-Green notes that the underground workings at Kilimapesa Hill are being prepared for the increased production levels required to maintain throughput at the new plant.

This has included comprehensive sampling and mapping of all existing underground workings in order to create a 3D model for planning purposes. A Kempe drill was also procured for underground exploration drilling.

Good development progress has also been made underground at Kilimapesa Hill.

In Adit Bull, vein three was intersected and a fourth vein was found. Drives East and West on vein three were started. 14 working places are now available which, given correct machinery and labour, should provide the ability to develop ore blocks quickly enough to allow development to stay ahead of production. A front-end loader has been procured and was commissioned during H2, FY2017.

The second outlet at Teng-Teng was completed and a mono-winch installed which will allow limited underground exploration to continue whilst the incline shaft is deepened and arrangements are made for direct tipping of ore into a hopper in the incline. Application for a mining license at Teng-Teng will begin during the second half of the 2017 financial year.

Aside from the current operational initiatives, talks with potential investors or joint venture partners continue, primarily with the aim of procuring additional resources within the region and for further exploration drilling to increase the resource on Kilimapesa’s exploration permit.

Exploration projects

Goldplat maintains interests in two Greenfield gold exploration projects which have a total JORC compliant exploration mineral resource of 3.9 Mt grading at 2.05 g/t gold for approximately 259 000 oz gold.

These include the 29 km2 Anumso gold exploration licence in the Ashanti region in Ghana and the 246 km2 Nyieme project in the Birimian Greenstone Belt in southern Burkina Faso.

Goldplat signed an earn-in option agreement with TSX-listed Ashanti Gold Corp over the Anumso project in Ghana in September 2016 and Ashanti Gold Corp exercised its initial option in March 2017 to earn up to 75% of Goldplat’s interest in the Project (giving Ashanti 67.5% of the overall project interest) by expending US$3 million on exploration over a period of 2.5 years.

Gold recovery operations

Goldplat’s core business is gold recovery from mining by-products. Its recovery plants are designed to process a variety of materials, including fine carbon, wood-chips, steel and rubber mill liners, grease, high grade waste dump material and to recover precious metals from plant clean-ups from time to time.

This provides an economic method for mines to dispose of waste materials while at the same time adhering to a mine’s environmental obligations.

The company’s primary operating base – Goldplat Recovery SA – is situated near Benoni on the East Rand goldfield in South Africa, while gold is also produced in Ghana at the Gold Recovery Ghana Limited operation in the port of Tema, Accra.

The recovery operations have contracts with most of the major mine operators in South Africa and Ghana including Anglogold Ashanti, Gold Fields, Sibanye Gold and Impala Platinum.

Feature image credit: Goldplat

The new Kilimapesa plant was officially opened by Cabinet Secretary for mining in Kenya, Honourable Dan Kazungu, in February 2017.