Goldplat shares up more than six per cent after record production

Shares in Africa-focused gold miner Goldplat (LON:GDP) were up more than six per cent at 12.725 pence each in late morning trading today after the firm said that its gold production had reached record levels. As a results, the firm’s pre-tax profits for the past year increased by 76 per cent as a result.

Goldplat, which this morning reported full year results for its 2011 financial year, said that its gold recovery plants in South Africa and Ghana increased production by 31 per cent during the period to 28,185 ounces. Also, during the period, the firm won additional contracts with mining majors in South Africa and West Africa to acquired gold-bearing by-products for processing, helping to ensure that the firm’s capacity at its gold recovery operations is used efficiently.

Indeed, Goldplat increased production capacity at the flotation section of its South African recovery plant by 15 per cent during the year.

The firm’s Ghanaian operation secured two toll processing agreements with Gold Star and Adamus Resources during the period that will allow some of its stockpiled by-products to be processed off site. The agreements were “a significant factor” in increasing both gold production and profits for the full year at the operation, Goldplat said.

Consequently, Goldplat’s revenue for 2011 increased significantly to £19.6 million (2010: £10.7 million), while its operating profit improved by 48 per cent to £3.1 million. Profit before tax came in at £3.4 million (2010: £1.9 million), which included an exceptional gain of £425,000 since the early settlement of the balance of the purchase price of Kilimapesa Gold (Goldplat’s Kenyan gold project) meant only US$0.8 million was paid instead of US$1.5 million.

As far as Goldplat’s Brownfield gold projects are concerned, the firm said it was “on track to delineate in excess of one million ounces of resources by H1 2012”, while “imminent gold production” is set to take place at Kilimapesa.

Analysts at Fairfax noted that the company aims to increase the current maiden resource at Kilimepesa of 129,000 ounces to 0.5 million ounces by the end of this year, with underground development currently underway at the project.

The firm has also completed a 3,100-metre drilling programme at its Nyieme gold project in Burkina Faso, “with results expected to be announced shortly”, while it has begun an exploration programme at its recently-acquired Banka Gold Project in Ghana.

“Whilst building profits and revenues remains a key objective for the company, the exploration and development of brownfield projects, typically high  grade vein systems, is  where we see the growth and value uplift potential, as we continue to build the company into a mid tier gold producer in Africa,” said Brian Moritz, Goldplat’s chairman.

Goldplat’s net cash position at the end of June was £3 million (June 30 2010: £1 million).

In late August, Goldplat’s house broker WH Ireland described the firm as having “a compelling invest case” based on current assets, earnings and prospectivity. The broker set a target price for the shares of 21 pence each.