JOHANNESBURG (miningweekly.com) – Aim-listed gold producer Goldplat has suffered a £377 000 pre-tax loss and an £827 000 operating loss for the six months ended December 31, 2014, owing to the impact of refinery problems at its operations and increased exposure to gold price fluctuations.

The Africa-focused miner said that, while it had made progress with its South African gold recovery operation’s (GPL’s) new contracts and initiatives to increase gold production, the operation, along with its Gold Recovery Ghana (GRG) operation was impacted by continuing difficulties with third-party refiner Rand Refinery.

“Rand Refinery’s decision not to receive and process concentrates during the period has resulted in a substantial build-up in product stocks and, consequently, Goldplat’s customers are withholding further deliveries pending the clearance of the backlog,” Goldplat chairperson Brian Moritz said in a statement.

Traditionally, the miner sold a substantial proportion of concentrate product to the refinery.

Further, he highlighted that the Kilimapesa gold mine, in Kenya, continued to be lossmaking. “However, we remain focused on reducing these losses and numerous plant initiatives have been successfully implemented to reduce overall cost and increase gold production,” he said.

With the group’s increased exposure to fluctuations in the gold price and exchange rates, Goldplat expected its profitability to continue to be affected in future, putting strain on the group’s cash position.

NOT ALL LOST
“We are in the process of increasing our elution capacity for our recovery operations at GPL and GRG,” Moritz noted, adding that the group had acquired a second-hand elution plant, which would be deconstructed, moved and recommissioned at the GPL site, in Benoni, in due course.

The first 4 t column was expected to be commissioned at the site towards the end of this year. Once operational, the group would move the 1 t column at the GPL site to GRG site in Ghana.

“To help limit our exposure to such difficulties going forward, in particular until our own elution capacity has been expanded, we have been shipping concentrate to Aurubis Refinery, in Germany, and are broadening our contract with them,” Moritz stated.

Further, the group’s tolling agreement with Endeavour Resources for the GRG operation was on track to be reinstated, which could significantly improve the outlook for this operation.

Moritz highlighted that the group also recently signed a nonbinding letter of intent for the acquisition of a private gold exploration company.

“The proposed acquisition is at an early stage and, if completed, the management it would bring, among other things, will have the skills and experience to assume responsibility for managing and enlarging the Kilimapesa gold mine,” he said.

Meanwhile, three additional mining companies signed contracts with GPL to process by-products during the period under review. In addition, the first international batch of by-product material was received from a gold processing operation in Tanzania and GPL would continue its efforts to procure material outside South Africa.

Encouraging results had also been received from testwork by a local university to develop a new process to retreat tailings and improve overall recovery. The university was undertaking further desktop studies.

GHANA OUTLOOK
Despite the difficulties the GRG operation was facing, its client base remained stable, with the major mining companies in Ghana continuing to support the operation.

GRG was working on improving the current turnaround period, with its procurement team focusing on sourcing additional material; a particular focus was to find more international material that could be imported to GRG.

“We also plan to install elution capacity at GRG in 2016 as part of our licence requirement,” Moritz said.

GRG would continue to work with the Ghana Environmental Protection Agency to ensure that operational activities at the operation were consistent with best practice, preserved the integrity of the environment and protected other adjacent land users.