Operational Update

Goldplat plc / Ticker: GDP / Index: AIM / Sector: Mining & Exploration

31 August 2016
Goldplat plc ('Goldplat' or the 'Company')
Operational Update

Goldplat plc, the AIM quoted African gold producer, is pleased to announce a positive operations update for the three months ended 30 June 2016 (the 'Quarter') for its two market leading gold recovery businesses in South Africa and Ghana, and its Kilimapesa Gold Project in Kenya, reporting a total gold and gold equivalent production of 11,969 ounces, continued profitability and steady progress on priority capital projects.

Production for the Quarter

During the Quarter, the Rand Refinery silver toll recovery project was completed and although the contract is currently under dispute, the Directors are confident that the dispute will be resolved.  Preliminary results from the project show a total of approximately 3,700kg of silver (1,593 gold equivalent ounces) and 42kg (1,350 ounces) of gold were produced for the Rand Refinery. Including this production, total gold produced during the Quarter was 11,969 ounces, total gold and gold equivalents sold was 6,584 ounces and gold and gold equivalents transferred to clients was 9,131 ounces, amounting to total gold and gold equivalents sold and transferred of 15,715 ounces. The difference between the gold production and gold sales and transfers reflects the reduction of stock.

This was an excellent Quarter for Goldplat, as with the elutions for the silver project reaching completion during the Quarter, the elution circuit was once again available for producing own and client gold.

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

• During the Quarter, 11,095 ounces of gold and gold equivalents were produced, a total of 5,012 ounces were sold and 9,131 ounces were transferred to clients by way of metal transfers.

• The Company successfully completed the silver toll recovery project for Rand Refinery to which the high grade circuit and approximately half of the increased elution capacity had been dedicated.
• The current dispute between the two companies is on-going and the Board is confident that the dispute will be resolved.
• Overall inventory was significantly reduced following the completion of the silver project as 100% of the elution capacity being available for gold recovery during the latter part of the Quarter.
• GPL successfully delivered the first Dore bars to Heraeus Refinery as part of our strategy to de-risk from single refinery dependency. 
• A new General Manager and a Strategic Sourcing Manager has joined the GPL team, adding significant strength to the operational team.
• The metallurgical research into optimising metal recovery from tailings recovered from the Tailings Storage Facility, part of the re-processing project, was completed. Complementary test work to determine the operational variables of the pre-treatment of the tailings will have to be completed before the plant design, production planning and economic assessments can be undertaken.

Gold Recovery Ghana ("GRG")

• During the Quarter, 304 ounces of gold was produced at GRG with 947 ounces being sold, the difference again representing the depletion of stocks.
• The renewal of the Gold and Environmental Protection Agency licences are in progress. The processing of these applications is taking longer than anticipated but GRG is working closely with the relevant authorities and expects the process to be concluded during H1 2017.
• The new commissioning date of the elution plant project is still being negotiated with the Ghanaian Authorities and will be agreed once the licences have been renewed.
• The de-commissioned carbon-in-leach ('CIL') plant was containerised and shipped to Kenya. This has freed up significant surface area, part of which will be used for the Elution Plant project.
• Relationships with clients in Ghana remained stable during the Quarter and deliveries from these clients have normalised.
• During the Quarter, representatives from the company visited a number of gold mining operations in South America and agreed to process a trial batch of material. The results from the trial were very encouraging and the decision has been taken to move a procurement officer to South America for a period of six months to arrange more trials, and potentially the processing of full batches.
• As part of our strategy to explore other international markets, a delegation will be visiting gold mining operations in Guinea to investigate the availability of materials for processing at GRG.

Kilimapesa Gold ("KPG")

• Kilimapesa produced 570 ounces of gold during the Quarter and 625 ounces from the mine were sold.
• Monthly losses continue to be reduced by improving gold yields, and cost reduction through various initiatives.
• Processing of high grade artisanal tailings from within the licence area continued and have contributed very positively to the overall gold production for the Quarter.
• Limited production of high grade ore from on-reef exploration at Teng-Teng continued during the quarter, with a second outlet being developed.
• Plans are still underway to prepare for a mining licence application.
• The Knelson concentrator plant trials proved to be very successful - the equipment has now been installed and re-commissioned at the new plant site. The concentrator will be used to process lower grade artisanal tailings.
• Good progress is being made on the new plant project:
  • The EIA report has been approved and KPG has received a VAT exemption for import of plant and equipment. 
  • The CIL plant from GRG has been shipped to Kenya and was cleared through customs during the Quarter.
  • All major infrastructure is being manufactured at GPL in South Africa and shipped to Kenya as containers are filled.
  • The land required for the tailings deposition has been acquired and the design for the tailings facility has been completed.
  • The tailings facility design for the Knelson concentrator tailings is complete and a borrow pit has been excavated.
  • On-site, water supply to the plant has been completed with storage tanks installation complete.
  • Various civil works around site have been completed.
  • The plant design is complete and approved with a wet crushing section added during the Quarter.
  • A geologist was appointed on 1st July 2016 to strengthen the team.
  • A facility for $250 000 has been arranged with Stanbic Kenya specifically for capital equipment.

Anumso Gold Limited ('Anumso")

Good progress was made in finding a partner for the Anumso project. A letter of intent, to invest and earn into the project, was signed post the Quarter-end by a Canadian listed company. A binding option agreement is expected to be finalised during September 2016. Such an earn-in will provide investment into the project, with Goldplat retaining exposure without having to raise capital during the earn-in period.

Rand Refinery silver project dispute update

Further to the announcement made on 11 July 2016 regarding the dispute between GPL and Rand Refinery, the two parties have been in discussions regarding the best possible way to resolve the dispute amicably. A joint team has been appointed to manage a process of investigation, to be run by independent external industry experts, to assist the parties resolving the dispute. The investigation is expected to be completed during the final quarter of 2016, following which the two parties will seek resolution in light of the findings of the independent investigation.

During the course of this investigation Rand Refinery will deal with Goldplat in a "business as usual" manner regarding refining and payments, keeping the disputed amount separate from other accounts. The dispute is unfortunate given the original intention of the project, to enhance the relationship between the two parties, and to demonstrate the improved capability and flexibility gained by GPL with the installation of the new elution plant.

Gerard Kisbey-Green, CEO of Goldplat plc, commented:

"This has been a very strong final Quarter of FY 2016 and I am very pleased with what the various Goldplat teams have achieved. Notwithstanding the dispute with Rand Refinery, the silver project was a great technical success and processing the first trial batch of South American material successfully in Ghana was an unexpected bonus!

These projects and a number of others are proving that the capital invested in infrastructure and new equipment during the year was well invested and will continue to deliver returns going forward.

Committing a milling circuit and a substantial portion of the elution capacity at GPL to the Rand Refinery silver project for most of the Quarter meant we had a lot of client and own material to elute in the final month of the Quarter. I am pleased to say that all client material and a significant amount of our own material was successfully processed during the month.

Lastly, I believe that both the Kilimapesa project and our strategy to procure material from South America have gained momentum during the Quarter and will continue into the new financial year. Whereas the results reflect the operational performances only, I am pleased to report that including all head office costs and costs associated with non-operating subsidiaries, the Group was profitable during the Quarter."  

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About Goldplat                                                                                                
Goldplat plc, is an AIM quoted gold recovery services company with two market leading operations in South Africa and Ghana. The Company's strategy is focussed on utilising its cash flow generated from flagship gold recovery operations in Africa to self-fund sustainable growth and expansion of niche gold recovery business model. The Company also has a small gold mining and exploration portfolio in Kenya, Burkina Faso and Ghana and is evaluating various opportunities to create value or monetise these assets.