Edison Investment Research sees growth potential in Goldplat as Kenyan production nearsEdison Investment Research sees growth potential in Goldplat as Kenyan production nears

Edison Investment Research was encouraged by a recent operational update from Africa operating gold and platinum miner Goldplat (LON:GDP), which it said confirmed its steady progress with both of its gold recovery plants in South Africa and Ghana operating in line with expectations, while production in Kenya is expected to commence shortly.

Other achievements highlighted in the report included the purchase of a further 20,000 tonnes of reprocessing material, which amounts to 5% of the existing stockpile or three months worth of material, and the successful commissioning of the intensive cyanidation plant in South Africa.

Edison commented that the stockpile replenishment increased the potential to pay annual dividends, while the cyanidation plant will reduce the discount paid on gold contained in concentrates by the Rand Refinery, reduce transport and refining costs and improve payment terms to boost cash flows.
Goldplat is also pursuing the installation of an intensive cyanidation plant in Ghana, with similar benefits as in SA, and the purchase of an elution plant, which Edison said would enable it to export gold bullion, rather than loaded carbon, thereby reducing transport costs and carbon consumption.

In Another update, grid electricity has reached Kilimapesa in Kenya, where commercial operations are anticipated shortly, to further reduce costs.

The broker refrained from re-evaluating the stock, but said that its value could go up if its South African and Ghanaian stockpiles are replenished.

Edison is currently projecting Goldplat to post revenues of £16.7 million in 2011 compared to £12.8 million this year and a pre-tax profit of £3.6 million compared to ££2 million in 2010.

Goldplat has an expansion plan in place to up production at Kilimapesa in Kenya to an expected range of 5,000 to 6,000 oz (ounces) per year, also expecting to finalise the mining lease over the project shortly.

In Burkina Faso, Goldplat is currently conducting a trenching programme at the Nyieme gold project, which will recommence after the rainy season in August. A diamond drilling programme over the area previously drilled by Sanu Exploration is scheduled to start on 16 August.