Goldplat has announced an operational update for Q3 FY 2017 and reiterated its targets for the full year. Production of 6.7koz in the quarter was down 45% QoQ and 7% YoY, however, this is largely due to a delay in the receipt of processing material in Ghana. Indeed, on a nine month basis, production of 28koz which is up 14% YoY is on track to meet the target of 45koz for group FY 2017 production.
In Ghana 803oz was produced with 5.5koz sold. The discrepancy between gold sold and produced had been expected due to an outstanding license which was received towards the end of Q2 FY 2017. However, this difference was exacerbated by a delay in the receipt of material for processing which negatively impacted production in Q3. Production in Ghana had been expected to be lower in H2 versus H1, however, and with the arrival of the first shipment of material from South America we expect a more normalised production level in the final quarter. Capital projects in Ghana are progressing on target, including the construction of the additional 4t elution column.
The South African operations delivered a robust performance with 5koz produced, up 2% YoY although down 30% QoQ due to a particularly strong prior quarter. Following the recent announcement regarding the legal proceedings with Rand Refinery, GDP has confirmed that it has identified an alternative refinery as well as Aurubis in Germany where shipments can be processed meaning it has largely mitigated the associated operational risk.
At Kilimapesa the ramp up is performing well with quarterly production of 964oz up 70% QoQ and 92% YoY. Stage Two is expected to be completed by the end of April 2017 with the crusher installed by the end of May 2017.
Overall, we remain positive on GDP’s operational performance and our forecasts remain unchanged.
We reiterate our Buy recommendation and 11.2p/sh. target price.