Goldplat Plc (LON:GDP) Chief Executive Officer Gerard Kisbey-Green caught up with DirectorsTalk for an exclusive interview to discuss the company’s return to profitability, its sustainability, commissioning of an elution column and business in South America
Q1: Goldplat’s return to profitability, whilst it’s good news for the company and investors alike, is this a one-off quarter or are these results sustainable?
A1: I’d like to say that the turnaround is planned and is sustainable, it really is a trend, and bar anything unforeseen, we feel it is sustainable. The company came off the back of a very difficult 2015 financial year and that was largely due to very well documented Rand Refinery issues that we experienced, I won’t elaborate on them now as I think the market is aware of them. We’ve successfully addressed those issues, we’ve put in place a number of steps to mitigate what I refer to as the single refinery risk, and we expect to now have, what we call, the backlog stock which is as a result of the Rand Refinery issues. It should all be processed by the end of December of this calendar year, after which we can utilise the benefits of the step we’ve taken to process more new material and to continue to grow the business. So that’s a reasonably long answer to a simple question, the results are sustainable, with all other things being equal, and we’d like to think we’re bottomed out and turned a corner.
Q2: Now, you referred to the imminent commissioning of an elution column, can you elaborate on this and the expected impact on the business?
A2: We have spoken at some lengths about this elution column but we are very pleased to be able to say that we’ve installed it now and we expect to commission it over the next few weeks and hopefully before the end of November. To briefly take you through why we’ve acquired the capacity and what we’ve done in the meantime to increase the capacity with the existing elution columns, in 2014 towards the end, we became aware of the Rand Refinery issues and because they couldn’t process some of our materials, we started having a stock build-up. One of the ways to decrease the stock build-up was to send the material to another refinery, which we started doing with the Aurubis Refinery in Germany and still are doing. Another thing was to build up our own elution capacity so we could in-house in Johannesburg treat some of that material so we had two 1 tonne elution columns which were producing throughpit of 1.5 tonnes per day. Just through better utilisation and efficiency, we managed to increase that to initially 3 tonnes a day and then by acquiring a new electric boiler, we managed to increase that further to 5 tonnes of throughput per day. In the meantime, we had acquired an elution plant from DRD Gold and that plant consisted of three 4 tonne elution columns so what we’ve done now is we’ve stripped the plant and we’ve just now installed the first of the 4 tonnes columns and the ancillary equipment and infrastructure within the footprint of our existing elution facility in Johannesburg at the Benoni plant. What we should be able to do with that now is we will be able to start that up shortly and be eluting at a rate of about 8 tonnes of throughput per day. With that done we should be able to clear the backlog stock by the end of the year and then have significant increased capacity for elution in-house going forward.
Q3: You’ve also eluded to doing business in South America, what can you tell us about this?
A3: We did refer to this in our announcement of the ops review. It’s not something new, I think consistently it’s been part of our strategy and specifically that we started to articulate the expected growth to the diversification of the Ghanaian operations. We are aware that there’s a lot of our product material in many parts of South America, and indeed North America and the rest of the world, and for numerous reasons it makes sense for us to, where possible, ship the material to our Ghanaian facility and process it there primarily. So with that in mind, we’ve been doing quite a lot of work at working out what material is available in South America with what plant and exactly what kind of commercial terms we might be able to present to some clients down there. With that in mind, we had a team going down to Brazil a couple of weeks ago and it was really exploratory, they wanted to meet a few people, get to terms with the lay of the land, in terms of the legalities, the tax and royalty requirements, Customs and Excise and it was a very successful trip. I guess if I was to say now that we are making some inroads there and hope to turn our strategic thinking into practice in the not-to-distant future, hopefully we’ll be able to announce sometime in the future some progress there.
Q4: In a few words, do you think you could tell us what you’d attribute the turnaround in Goldplat Plc’s fortunes to?
A4: I think a couple of things. First of all, it is a good solid fundamental business, indeed it’s a niche business in many respects. Secondly, it has had a strong and a stable team throughout. So with this business and the team and understanding the problems which we face in the business, we’ve been able to properly identify what we want to achieve, what resources we need to do so and now we’ve started to manage these resources, the old ones and the new ones to achieve these goals. In many instances, it’s really been a matter of simply allocating people to functions where they already have the skills and experience and the giving them the appropriate responsibility and accountability. We’ve made a couple of significant new hires where we had gaps and we’ve also put significant amount of money into replacing or refurbishing equipment and infrastructure. So we’ve spoken about the single refinery risk and we’ve alleviated that and then finally, just basically thorough strategic planning, management control of the business so I think we’ve turned a corner but we’ve got a long way to go. I think it is really down to those previously mentioned basics.
