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Goldplat plc

“Kilimapesa is now operating profitably for Goldplat plc at increasing rates” Gerard Kisbey-Green, Goldplat CEO

Goldplat plc LON:GDP, the AIM quoted gold producer with two market-leading,
international gold recovery businesses in South Africa and Ghana, and
primary gold mining interests, including the Kilimapesa Gold Mine in
Kenya, is pleased to provide an operational update.

Changes to the South African Mining Charter

On 15 June, 2017 the Broad Based Socio-Economic Empowerment Charter for
the South African mining and minerals industry, 2017, (the ‘2017
Charter’) was announced and gazetted in South Africa. The 2017 Charter
aims to introduce far-reaching, new, and in some cases, radical measures
and requirements on the industry. Goldplat Recovery (Pty) Limited
(‘GPR’) is compliant with the preceding Charter, and if the 2017 Charter
is implemented, certain changes will be required to maintain compliance,
primarily in respect of: (i) the increased mandatory Black Economic
Empowerment shareholding which is currently set at 26%, but is proposed
to be increased to 30%, and (ii) in the required make-up of management
demographics. The Chamber of Mines of South Africa has publicly rejected
the unilateral development and imposition of the 2017 Charter and plans
to take legal action on behalf of the industry to interdict the
implementation of the 2017 Charter on a number of grounds. Goldplat and
GPR will monitor this issue and will keep shareholders informed as to
progress and the possible impact on the Company as the process unfolds.

Kilimapesa new processing facility installation and commissioning

Installation of Stage Two of the new processing plant at the Company’s
Kilimapesa Gold Mine in Kenya (‘Kilimapesa’) was completed in mid-June
2017. This comprised a new crusher circuit and three additional leach
tanks. Although installation was slightly delayed due to difficulties
getting certain steelwork and electrical supplies to the site, the
Company is pleased to report that commissioning has begun and is
expected to be completed by the end of June 2017. Furthermore, despite
the delays, planned mill throughput rate for Stage Two of 120 tonnes per
day of ore was achieved during May 2017. This was made possible by
treating previously stockpiled fine material which did not require
crushing, as well as by the relocation and installation of a spare
crusher as a temporary measure.

A strategic decision has been taken to bring forward the switch over to
grid power in order to overcome ongoing difficulties with the generators,
primarily a result of poor diesel quality. In order to facilitate the
financing thereof, an agreement has been reached with the Kenya Power
and Lighting Co. Ltd (‘Kenya Power’) to allow payment of the
installation cost of approximately US$200,000 to be spread over 12
months. Installation is expected to begin towards the end of June 2017
and is expected to take 6-8 weeks. Major improvements to the supply of
grid power have also been completed by Kenya Power making this source
far more reliable, both for the old as well as the new plants. This
should have a positive impact on costs as fewer switch-overs to diesel
back-up power will be required. Once consistent planned production and
profitability have been achieved with Stage Two, a decision will be
taken regarding the Stage Three expansion. The Board has however
approved the installation of the second mill (originally planned for
Stage Three), specifically as a standby to mitigate downtime risk.

Ghana elution plant

A complete, second-hand 3-tonne elution plant was recently acquired by
the Company’s gold recovery operation in Ghana, Gold Recovery Ghana
(‘GRG’), from a producer in South Africa for ZAR 2 million
(approximately US$155k). This plant is modular, complete with all
ancillary equipment and will more than meet the requirement of the
Companies expanding Ghanaian operations. As such, it was deemed a better
option than moving an existing 4-tonne plant from GPR to GRG and the
purchase of the required ancillary equipment and infrastructure. It is
estimated that the final cost of installation will now be in the order
of US$1m, compared to the initial estimate of US$2m for the plant from
GPR. The acquired elution plant has been dismantled, moved to GPR for
refurbishment and is now in the process of being shipped to Ghana.
Installation and commissioning is expected to be significantly quicker
than per previous plans, with commissioning now planned for the end of
December 2017, six months ahead of the milestone date stipulated by the
Ghanaian Government in accordance with the Company’s gold licence
renewal terms.

South America contract

The Company has been sourcing and shipping material on a regular basis
from various individual suppliers in South America since the second half
of 2016 and good progress is being made on contract negotiations. The
first significant recurring contract was signed recently with initial
shipments of 360 tonnes of carbon underway to Ghana and shipments of
rubber mill liners being finalised.

Gerard Kisbey-Green, Goldplat LON:GDP CEO commented. “Kilimapesa is now
operating profitably and at the increased rates targeted for Stage Two.
This, together with continued steady and positive progress in South
America, means the overall performance of the Group remains positive and
in line with market expectations. Looking closer at South Africa, as we
do not expect the new 2017 Charter to have a significant impact on our
business, GPR will leave the ongoing negotiation process in the hands of
the Chamber of Mines and the larger industry players, and we will
continue to focus on issues over which we have more direct control,
including continued focus on increasing operational efficiencies and
ultimately profitability.”

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Disclaimer: Statements in this article should not be considered investment advice, which is best sought directly from a qualified professional.