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Goldplat reports FY loss amid lower gold price

22nd September 2014

By: Leandi Kolver

Creamer Media Deputy Editor

  

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JOHANNESBURG (miningweekly.com) – Aim-listed gold producer Goldplat on Monday reported a £356 000 loss for the financial year ended June 30, compared with a £399 000 loss the year before, as the lower gold price cut revenues.

Chairperson Brian Moritz pointed out that the financial year under review had seen a “substantial reduction” in the gold price, from about $1 600/oz in 2013, to an average of $1 300/oz.

“It follows that the same volume of gold sales would result in income of some $300/oz less than for [the 2013 financial year], and this difference is reflected in the reduction in turnover of £7.88-million,” he noted.

However, Goldplat reported a £153 000 operating profit for the 2014 financial year, down from the profit of £2.64-million in the prior year.

This was in line with expectations, with the gold producer having warned in February that its operating profit for the financial year would be lower than that recorded in fiscal 2013.

At the time, it had explained that its Goldplat Recovery operation, in Benoni, Gauteng, had had a difficult trading period in the first half of the 2014 financial year, owing to the lower gold price and other temporary factors that had impacted on the plant’s operations.

Moritz on Monday said the return to profit during the second half of the year was the result of refocusing the company’s recovery operations, which had now also been aligned for further growth in several key focus areas over the next financial year.

He added that the year under review had been challenging for Goldplat, given the gold price environment.

He noted, however, that Goldplat's exposure to the gold price was mitigated by the fact that it could, and did, adjust the price of gold-bearing material it bought, thus putting it at an advantage compared with a mine reliant on a finite orebody. 

“However, the major part of Goldplat's costs are processing costs, which do not vary with the gold price and, as a result, the main factor in the improving trading position has been the rigorous cost control measures introduced by management across all operations,” he said.

Meanwhile, Moritz noted that the company’s net finance costs for the period of £419 000, compared with £59 000 previously, primarily comprised exchange rate differences as a result of the weakening of the rand.

Further, he said that improving the performance of the Kilimapesa gold mine in Kenya had proved difficult.

“The plan is to eliminate losses at the mine prior to bringing in a joint venture partner to provide the funding required to increase production to a materially profitable level. To achieve this, production is being increased by means of low-cost improvements to the processing and security systems,” he outlined.

Mortiz said management accounts for August indicated that this approach had resulted in better than breakeven for that month, stating that the management team was confident that this would be sustainable going forward. 

“Assuming funding from a joint venture partner, it is planned that the plant will be relocated from its present position near the town of Lolgorien to a new site next to the mine itself. The board believes this approach is the best way of protecting and enhancing the value of Kilimapesa for shareholders,” he noted.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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