Goldplat poised for commercial production at Kilimapesa, recovery plants performing well

In its half-yearly report for the six months ended 31 December 2009, Goldplat (AIM: GDP) said it is realising its strategy of becoming a mid-tier gold producer as its Kilimapesa mining operation advances in Kenya towards commercial production. The company’s South African and Ghanaian gold recovery plants are performing well, generating healthy revenues, Goldplat said.

Operating profits grew by 54% from the previous first half to £1.225m, however foreign exchange movements impacted overall results, leading to a slight dip in pretax group profit to £1.15m compared to £1.2m in the same period a year earlier.

At Kilimapesa on the Migori Greenstone Belt in western Kenya, Goldplat's management has been working closely with  the  commissioner of Mines and  Geology to finalise the mining lease application with the final component, the cadastral survey, expected to be completed shortly. The final license decision has been approved, subject to the successful completion of the survey. Once officially granted, Kilimapesa will be permitted to make commercial sales of gold and production will recommence at the historic mine.

"These are exciting times for Goldplat as we continue to bolster our position as a gold producer in Africa.  With the mining licence allowing us to make commercial gold sales at our Kilimapesa Gold mine close to  finalisation”, Goldplat CEO Demetri Manolis commented. “What differentiates us is our ability to leverage our two gold recovery  businesses in South Africa  and Ghana, where we have  continued to increase the production efficiencies  which  in turn has improved our cash flow from which to grow the company”.

The emerging gold company produced 8,309oz gold from its gold recovery operations, compared with 12,084oz in H1 2008. The South African plant performed particularly well following a number of operational improvements during 2009. Goldplat commissioned a larger mill and increased its flotation capacity, moreover the company also expanded the range of materials being processed and the techniques used.  The South African operation contributed to the overall production 6,369oz, the Ghanaian operation produced 1,940oz.

Income at the Ghanaian recovery plant fell slightly short of management expectations, mainly  due  to delays in  the  delivery of concentrates to the refiners.  However, production has now increased and development is proceeding well.  A new incinerator has been commissioned and an intensive cyanidation plant is also being installed, which will enable Goldplat to sell its gold in bullion form and will,  as with the South  African recovery plant, result in cost savings and improve cash flow.
Furthermore the emerging gold producer added to its exploration acreage, as it acquired an option over a prospective 246 square kilometres Nyieme gold project in Burkina Faso. According to Goldplat, previous exploration on the property generated exciting results, with the identification of high-grade quartz vein structures over a 4km trend. The company plans to carry out a 2,500m diamond drilling programme, in addition to surface geochemical and mapping programmes, in order to define the southerly extent of the veins.

Subsequently Goldplat intends to establish a JORC-compliant resource at Nyieme, to form the basis of a production development programme.

“We are realising our strategy of building a portfolio of production and exploration properties to become  a mid tier gold producer. The development of a strong portfolio is paramount to our strategy and we are actively seeking other opportunities”. Goldplat is specifically looking at mining assets across Africa that utilise its knowledge and experience in the gold producing sector.

Looking forward Goldplat said the future looks bright for its recovery businesses due to good stockpiles and a steady flow of materials and contracts. Supported by its newly increased capacities and capabilities, the company believes that revenues should rise accordingly. Goldplat added it is "excited" about the prospects at Kilimapesa Gold, with commercial production poised to commence in the near future. With the new project in Burkina Faso and various other opportunities under review, the company is expecting a busy second half.

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