So says Goldplat chairman Brian Moritz in reporting the company’s final results for the year ended 30 June 2007 – its first year of operation since flotation on the AIM in July 2006. “Our strategy has always been to create a junior mining house focused on gold production, and underpinned by revenue secured from our recovery business,” he points out.
“This has been achieved through a three-phased approach,” Moritz explains, “first to increase efficiency and flexibility of our South African processing plant; second to develop a complementary processing plant in Ghana to meet demand primarily from West African gold mines; and finally to move into gold mining through the acquisition of known African deposits with targets of between 200 000 and 2 million ounces of contained gold.”
PHASE ONE – RECOVERY IN SOUTH AFRICA
In the past year the company stepped up production and profitability of its South African recovery plant by investing in new machinery and upgrading existing plant equipment. “This first phase has been completed,” he confirms, “and I am happy to say that this strategy proved most successful, as highlighted by our results.”
Goldplat ended the year with pre-tax profits equivalent to almost R10.5 million, and an after tax profit of close to R8 million. “Our cash position remains healthy with more than R17 million in the bank, and this is being retained for further expansion of company operations as we accelerate our growth strategy,” says Moritz.
PHASE TWO – RECOVERY IN WEST AFRICA
The second phase – bringing the new recovery plant in West Africa into full production – is progressing well. Situated at the free port of Tema in Ghana, the plant is being operated by Goldplat’s wholly-owned subsidiary, Gold Recovery Ghana Limited (GRG).
“The first stage of construction is complete, phase two construction is well underway, and we are on track to reach the plant’s full production capacity in the first half of 2008,” says Moritz “The ball mill, feed conveyor, gravity concentrators, water reticulation, lighting for a 24-hour operation, and the tailings stock dam are complete, providing GRG with the facilities to process surface materials with grades of 10 to 12 g/t of gold that are amenable to gravity concentrate,” he adds. “Carbon in leach (CIL) tanks are now being installed to further improve the overall recovery of gold from the small miners’ surface material.”
Gold production has commenced at the mill and raw materials are being secured. Production from liners and fine carbon has been consistent and is expected to continue. Liners are now being collected from Golden Star’s Wassa mine, and the Bibiani mine of Central African Gold. Offers for a further 4 000 tonnes have been accepted, and arrangements are being finalised to transport the material.
“Following further site visits the directors believe that significant gold is available for purchase at substantial margins,” Moritz reveals. “As a result, GRG is to invest in a furnace to melt gold produced by the small miners before purchase, as this improves the accuracy of the samples and assays. This gold will be exported to Rand Refinery Limited in South Africa,” he adds.
PHASE THREE – A MOVE INTO GOLD MINING
“With Phase One completed and Phase Two almost at an end, we are now focused on phase three,” Moritz continues. “While we do remain committed to our recovery businesses in South Africa and West Africa,” he explains, “we are excited to be moving into the gold mining arena where the strong gold price makes our vision more attractive. The small ore bodies we are targeting are becoming increasingly interesting and profitable.”
Goldplat’s first joint venture agreement was signed earlier this year with International Gold Exploration AB (IGE) – a Swedish mineral exploration company quoted on the Oslo Stock Exchange – to develop the gold potential of ten targets in the highly prospective Lolgorien licence area, located in the Migori Archaean Greenstone Belt in Western Kenya. It is understood that this could lead to the first modern-day gold mine in Kenya. The JV has created a Kenyan company called Kilimapesa Gold (Pty) Ltd.
A confirmatory exploration programme is currently underway at six of the targets, and several continuous vein quartz targets have been identified. A geophysical programme conducted by IGE has confirmed Goldplat’s choice of targets, and is currently confirming the geological model. Goldplat has also completed an evaluation of several surface resources in the immediate vicinity with initial results showing above 2.5 g/t, and 80% of these resources are within 200m of the existing metallurgical plant.
“All surface reserves have been augured, sampled and surveyed, and a total of 263 samples have been submitted to SGS Laboratories in Johannesburg,” Moritz continues. “Once values have been received, the deposits will be modelled and resources calculated. At this point the company expects to have measured resources for the surface reserves, and to have evaluated the quartz vein targets for further work,” he predicts.
“As far as production is concerned, the existing CIL plant has a monthly capacity of 1 000 tonnes, but we intend to refurbish the plant to expand its capacity, says group geologist Mark Austin. Goldplat is committed in terms of its joint venture agreement to spend US$400 000 (almost R3 million) to earn its 50%. Thereafter each party will contribute equally to the costs of gold exploration and production, and will share equally in profits generated.
“The decision to mine will obviously depend on the results of the evaluation phase, on which we have spent US$109.000 (R750 000) so far”, Austin explains.
Results permitting, Goldplat chief executive Demetri Manolis told Mining Review Africa earlier this year that.by the end of 2007, Goldplat would have a very good idea of what is happening: “We will then have to commission a feasibility study in early 2008,” he stated, “and that would be completed late in the year.”
If the study leads to a decision to mine in late 2008 or early 2009, actual implementation of a mining operation could be fairly quick and cost-effective because there is an established infrastructure, and the operation would be dealing with very shallow reserves, which means that operating costs would be low. Mining could definitely commence during the course of 2009.
“Looking ahead and further afield, we continue to examine mining projects across Africa which we believe can be brought into production rapidly,” Moritz reveals.”South Africa – as a country with a solid history of gold mining, good infrastructure, an experienced workforce, workable legislation and an area of significant scope – remains a prime area of focus,” he adds “Other countries of focus for the expansion of our mining activities are Kenya, Tanzania, Ghana and Mozambique,” Moritz concludes, “and in the above-mentioned countries projects have been identified and are currently under review or in an advanced state of negotiation.