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Goldplat plc: THE INVESTMENT CASE

Goldplat’s core recovery business provides platform for wider growth in exploration and mining

Goldplat's recovery business provides a cash-generating foundation for future growth
Goldplat’s core recovery business provides platform for wider growth in exploration and mining
INVESTMENT OVERVIEW: GDP The Big Picture
Goldplat turns gold mining waste into cash

Goldplat PLC (LON:GDP) is a business built around the recovery of gold from previously used mining equipment. As such it has been able to support its other endeavours in exploration and mining secure in the support of steady cashflow from a consistent supply of product.

The company has two recovery operations in Africa, one in the historic hub of African mining, South Africa, and the other, new operation, located in West Africa’s premier gold producing nation, Ghana.

WATCH: Goldplat keeping their eye on the job after a fantastic quarter

The company takes waste materials from major mining companies like AngloGold Ashanti, Goldfields, Harmony and Lonmin.

The principal sources of Goldplat’s production are mill liners, woodchips, waste grease, silt from lakes and tailings dams, and fine carbon.

Operational performance provides strong base for further growth

In the three months to end September 2017, Goldplat recovered just over 7,500 ounces of gold and gold equivalent from its operations in South Africa and nearly 2,000 ounces from its operations in Ghana.

Factoring in production from the company’s Kilimapesa mine in Kenya, total production for the third quarter rang in at just over 10,200 ounces. In the previous full financial year, to June 2017, the company produced a total of 42,000 ounces of gold.

South America could take Goldplat to the next level

Although those figures represent a decent year-on-year improvement, they’re still relatively small fry in the lucrative world of gold mining and recovery.

To try and take itself to the next level, Goldplat has been working on securing more gold-containing material from producers in South America.

In fact, Goldplat Recovery Ghana has signed its first agreement with a South American miner and shipments are now underway.

With a few more similar agreements from producers dotted around South America, it isn’t crazy to think that overall gold production could edge towards 100,000oz – typically the entry point into the mid-tier ranks.

Kenya gold mine adds diversity, scale and upside

Meanwhile, production from the Kilamapesa gold mine, while still on a small scale, may provide a taste of things to come. Expansion at Kilimapesa has been initiated, with the impact of a new plant and tailings facility now beginning to show through.

The company also has a 90% interest in the Anumso mining lease in Ghana and also holds the Nyieme gold concession in Burkina Faso.

In time, this extra string to the recovery bow could become the main event, as Goldplat uses cash flow from recovery to support a comprehensive move into larger scale mining

Chief executive Kisbey-Green remains upbeat

"With operational profitability achieved at all operations and good progress being made on our strategic objectives, I am very pleased with the results,” he commented, with regard to the latest quarterly results.

“With production rates at Kilimapesa now sustainable at planned levels for Stage 2, focus will be on cost reduction. At GRG good progress is being made in our efforts to grow production through sourcing material from West Africa and South America, and we expect commissioning of the elution plant scheduled to begin towards the end of December 2017."

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