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Loadshedding results in dip in Goldplat’s South African operating profit

10th November 2023

By: Darren Parker

Creamer Media Contributing Editor Online

     

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Aim-listed gold recovery company Goldplat has reported a £77 000 year-on-year drop in operating profit for the three months ended September 30 – the first quarter of its 2024 financial year – as a result of ongoing power disruptions in South Africa.

The company, which released its quarterly results on November 10, has operations in both South Africa and Ghana, which together achieved a combined operating profit for the quarter of £1.87-million, excluding listing and head office costs, as well as interest and foreign exchange movements, compared with the combined operating profit of £1.94-million a year prior.

The operating performance comprises operating profit in South Africa of £759 000, down from £976 000 last year, and in Ghana of £1.11-million, up from £966 000 a year ago.

Goldplat said its gold recovery operations in Ghana received good supply of material during the quarter, supported by a large lower-grade consignment received out of Côte d'Ivoire.

“This is the first consignment out of Côte d’Ivoire and is a result of our continued engagement in various West African countries. This opens up the potential to extract more value out of Côte d’Ivoire and we will, at the same time, continue our engagement in Mali and other jurisdictions in West Africa,” the company said.

During the period, Goldplat incurred capital expenditure (capex) of £205 000 on a lower-grade milling, gravity and flotation circuit. The company said this would increase the value that can be extracted from larger volumes of lower-grade fine carbon material received in Ghana.

Commissioning of part of the plant would start in the second quarter, with full commissioning to be completed in the third quarter.

In South Africa, the company lost 21 operating days, 23% of the total days available in the quarter, owing to electricity cuts and infrastructure-related issues.

“We have continued to implement processes to maximise the production during electricity supply hours and, as a result, our tonnes processed were only 18% lower rather than 23% lower,” Goldplat said.

Owing to the continued uncertainty of electricity supply in the medium term, the company decided to invest in diesel generators which it said would be able to sustain operations in South Africa during electricity cuts.

“We originally expected the diesel generators to be operational by the end of October. However, due to delays in shipping, we now expect the generators to be operational in January,” the company explained.

Goldplat said it was seeing a reduction in by-products received from current mining operations owing to changes in their production profile, although the visibility on supply of low-grade soils for its milling circuits remains strong, with more than 18 months of material for processing on site and more on contract.

The company’s focus is, therefore, to increase the by-product market share in South Africa and to gain access to neighbouring countries.

Meanwhile, construction of a new tailings storage facility (TSF) was completed during the first week of August, with commissioning having started in the same month.

It is expected that the commissioning of the TSF will take nine months.

During the commissioning period, tailings will be deposited on both the new and old tailings facilities. Currently, most tailings are being deposited on the new facility. A further £320 000 in capex was incurred on the TSF during the quarter.

With the new TSF being commissioned, Goldplat intends to turn its focus to the work required to begin the processing of an old TSF at a DRDGOLD processing facility, which has a Joint Ore Reserves Committee-compliant resource of 81 959 oz.

The processing of this old TSF is dependent on the approval of the water-use licence over certain areas for the installation of a pipeline to the DRDGOLD process facility.

The application process is ongoing, with engineering designs being finalised and with final application to be done before the end of December. The approval is estimated to be received during the fourth quarter of the financial period.

DRDGOLD and Goldplat are currently in the process of evaluating different variables that will impact the processing of the TSF, as well as the commercial aspects of doing so. This process will be completed alongside the water-use licence.

Goldplat estimated that it would require a further £1.3-million, not including the investment of £750 000 to be spent on generators over the next 18 months, to be spent on repairing and maintaining current operations, on completing the TSF and improving the environmental impacts of current operations.

The company said it would continue to assess the economic and environmental feasibility of the fine coal recovery technology company it invested in, which is in line with its strategy to diversify its recovery operations into other commodities.

Goldplat’s cash balances amounted to £1.35-million for the quarter, with significant balances invested in debtors, with the main exposure to a new smelter in Europe and South Africa. This was driven by the delay in receiving a gold licence in Ghana during the fourth quarter of the 2023 financial year, resulting in inventory only being sold during the quarter under review.

“I am pleased with the operating results achieved by the group during the first quarter and results we are seeing from continued efforts, specifically consignment from Côte d’Ivoire, the improved turnaround of material being delivered to a different smelter, securing of low-grade carbon-in-leach material in South Africa, and the momentum we are seeing on engagement around the reprocessing of our old TSF,” Goldplat CEO Werner Klingenberg said.

He added that the company’s focus would remain on strengthening relationships and continued engagements in West Africa and South America, increasing market share in a declining gold market in South Africa and neighbouring countries, as well as reprocessing of the old tailings facility and leveraging Goldplat’s strength and capabilities through partnerships into other precious metals and commodities.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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