Marvel gold
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Goldplat has announced its interim results for the six months ended 31 December 2018.

“Our portfolio of core assets consists of two gold recovery operations in South Africa and Ghana, which recover gold from by-products of the mining process providing mines with an environmentally friendly and cost-efficient way of removing waste material, and the Kilimapesa Gold Mine in Kenya,” says chairman, Matthew Robinson.

“Having built a strong gold production profile over the past few years our focus is to greatly increase output and profitability, leveraging our established African operations to support clients globally.

“I am therefore disappointed to report a poor period across the Group including production and financial performance. During the first quarter all operations reported decreased production and financial results, mainly as a result of problems with sourcing sufficient material for processing at GRG and the quality of material processed at GPL.

“I am pleased to report that the South African operation was turned around during the second quarter, with production back to normal levels, producing very good results.

“Performance at the Ghanaian operation improved significantly during the second quarter, but not enough to recover losses sustained in the first quarter.

“We continue to produce at a loss at the Kilimapesa mine in Kenya whilst negotiating funding for the operation with third parties,”
Robinson concludes.

The Group reports an operating loss for the six-month period of £653,000 (six months ended 31 December 2017: operating profit of £1,578,000). 

Production of gold and gold equivalents for the six months’ period under review of 15,786 oz (six months ended 31 December 2017: 20,246 oz) is well below the year forecast.

All operations reported decreased production due primarily to the poor first quarter at both recovery operations and planned production decreases at Kilimapesa Gold (‘KPG’).

The poor first quarter at the recovery operations reflected difficulties at Gold Recovery Ghana (GRG) in sourcing enough material and challenges at Gold Recovery (GPL) in sourcing the required quality material during the period and highlights why sourcing remains a key strategic focus area for the Group.

GPL recovered well from a poor first quarter and has returned to normal levels during the second quarter with both the by-product section and the Carbon in Leach (CIL) section performing well. 

This performance is attributable to deliveries from clients returning to normal levels and management’s efforts to turn over gold inventory stocks that had accumulated over a period.

GRG performed below plan despite production improvements during the second quarter and reported a loss for the six-month period. 

Production increased during the second quarter as established clients in Ghana made deliveries of material and additional material was sourced from South America. 

The plant continued to run below capacity during the second quarter and despite the improvement the losses from the first quarter could not be recovered.

Substantial gold bearing material suitable for treatment at the Ghana plant has been identified at the operations of a major producer in West Africa.  A trial batch of this material will be processed once export logistics and legalities has been finalised. 

A successful outcome of this trial will secure another stream of material for the Ghana operation.

KPG continues to report losses despite a significant decrease in costs at the operation. This can be seen in the mining and exploration segment loss before tax of £836,000 (six months ending 31 December 2017: £81,000) of which £292,000 (six months ending 31 December 2017: £283,000) related to depreciation and amortisation.

Plans to put Kilimapesa on care and maintenance have been put on hold whilst discussions regarding financing of the operation are in progress. Since October a strategy was followed to reduce production, improve grades and decrease the overall cost of running the operation. 

This strategy envisaged that losses can be kept below the cost of care and maintenance whilst we are progressing a possible transaction to secure funding.

The net finance loss of £184,000 for the period (six months ended 31 December 2017: £746,000) relates mainly to the interest on the Scipion loans and the financing of debtors. The prior period included significant foreign exchange losses.

The Group has maintained a cash reserve of £1,000,000 (31 December 2017: £1,183,000) with interest bearing borrowings increasing to £838,000 (31 December 2017: £667,000).

Capital expenditure of £321,000 was spent during the period to maintain and optimise current plant infrastructure.