Operations Update

Goldplat plc / Ticker: GDP / Index: AIM / Sector: Mining & Exploration
31 October 2014
Goldplat plc ('Goldplat' or 'the Company')
Operations Update

Goldplat plc, the AIM listed gold producer in Africa, announces an operations update for its two market leading gold recovery businesses in South Africa and Ghana, and its Kilimapesa Gold Project in Kenya. The Directors remain confident that the Company is on track to report an operating profit for FY 2015, and believe that there are exciting prospects for expanding its recovery business.

Overview

• South African operations generated an operating profit for the quarter ending 30 September 2014 ('Q1 2015') following initiatives introduced in FY 2014
• Increasing focus on processing Platinum Group Metals in South Africa; trials to be held by end 2014, with no material capex required
• Ghana operations unable to deliver gold concentrate due to refiner strike action; not expected to negatively impact H1 2015 result
• Company accelerating discussions with potential JV partners at Kilimapesa Gold Project, which is operating within existing cash resources

Goldplat Recovery Pty Limited ('GPL') - South Africa

GPL, which recovers gold from by-products of the mining process, has continued to perform robustly and profitably for Q1 2015. This is largely due to the successful implementation of various initiatives made by the Company during FY 2014, which were reported in the Company's Annual Report, as well as the competitive advantages derived from GPL's accreditation as a producer of Responsible Gold.  

During the period, GPL has started to upgrade its main rotary kiln to reduce electrical consumption and improve the quality of ash produced, which will enable enhanced gold recoveries. The Company has also commenced a metallurgical efficiency project on its carbon-in-leach ('CIL') circuits which should further improve its gold recoveries for Q2 2015 and beyond.

Furthermore, GPL has started its drive towards increasing its presence in the Platinum Group Metals ('PGM') market.  During October 2014, two of GPL's metallurgists visited prospective mining clients with a view to purchasing by-products from the mining process to recover PGMs with positive results.  GPL will be looking to conduct trials for some of these potential clients by the end of 2014 and will update the market in due course.  No material capex will be required for this initiative.

Whilst Q1 2015 has seen a robust performance operationally GPL's cash position has deteriorated during Q1 2015 as deliveries of concentrates were not made to Goldplat's third party refinery as a result of temporary industrial strike action and subsequent delays at the refinery. GPL has been actively working on alternative metallurgical processes to remedy current and future delays at the refinery and in order to rapidly increase cash balances. The Directors believe that the cash position will normalise during Q2 2015.

 Gold Recovery Ghana ("GRG")

Due to the temporary strike at the refinery referred to above, during September 2014, GRG was unable to deliver gold concentrate produced at the Company's gold recovery operation in Tema resulting in unrealised profits for Q1 2015.  GRG is expecting to make deliveries shortly and this is not expected to negatively impact H1 2015 results.

GRG is working together with the Environmental Protective Agency ("EPA") which granted GRG a four week extension to submit a revised Environmental Management Plan ('EMP') whilst the various test work and analysis are being finalised. The EMP is now required to be submitted by 19 November 2014.

With regards to GRG's toll-processing agreement with Endeavour Resources, operations were temporarily suspended in June 2014 to allow GRG to obtain an additional permit from the EPA.  GRG continues with its permit application to allow the toll-treatment to re-commence. 

Kilimapesa Gold ("KPG")

Goldplat is accelerating discussions with potential joint venture partners to advance the development of KPG, with a view to identifying a joint venture partner before the end of 2014.  KPG has not required new funds from Goldplat during Q1 2015, as increases in gold production have enabled it to operate within its existing cash resources.

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