Goldplat reports £1.84m operating profit for the Sept quarter

Aim-listed Goldplat’s two recovery operations in Ghana and South Africa achieved a combined operating profit of £1.84-million, excluding listing and head office costs, finance cost and foreign exchange losses, for the quarter ended September 30 - the first quarter of the group’s 2025 financial year.

The finance cost and foreign exchange losses incurred in the quarter mainly related to trading activities and resulted in a combined profit before tax, excluding listing and head office costs, of £1.45-million.

The Ghanaian operation, which benefitted from an increasing gold price and continuous good supply of material, achieved a profit before tax for the quarter of £901 000.

Goldplat notes, however, that the Ghanaian operation is going through a business model change with the requirement to beneficiate all concentrates to doré gold bars in-country, which is placing increased demand on working capital.

The South African operation achieved a profit before tax for the quarter of £550 000 and was supported by stable production, albeit lower than the previous year, improved cost management and increasing gold price.

GOLD RECOVERY GHANA

As announced in the fourth quarter of financial year 2024 update, Goldplat says the focus and preference of the authorities in Ghana is on local beneficiation of concentrate.

The transition in process for Gold Recovery Ghana (GRG) has resulted in a reduction in debtors as doré bars produced from concentrate can be sold and payment received in less than two weeks, which is lower than the turnaround of about four months in the past.

It has also contributed to an increase in inventory value on site which has been driven by a good supply of material from the current customer base and healthy stock levels before the transition started.

“Through investment in plant capacity and changes at our operations, we believe these levels should normalise over the next two quarters.

“We are actively engaging clients to manage supply against current and future requirements and where possible, will divert material to South Africa to ensure a more diversified solution for our customers; and we plan to make use of working capital facilities to finance material onsite in the medium term whilst our plant capacity is increased and stock levels are managed,” says Goldplat.

As a result of these changes, the company says, GRG is currently the only local gold by-product beneficiation provider in Ghana.

Goldplat notes that it is still planning to invest £900 000 to increase capacity in the short term, after approval from the authorities is obtained for the expansion. This investment is required to increase plant capacity and to increase the recovery of gold from concentrate on site.

“Our objective is to improve and enhance our current solution so that we are able to provide a niche solution to customers at their mine site in future, who due to current country regulations may not be able to export material to our premises in Ghana.

“The local beneficiation requirement has impacted all aspects of our business and we continue to review, update and change our process and procedures to manage risks and maximise margins,” says Goldplat.

GOLDPLAT RECOVERY

Production during the first quarter of 2025 remained stable, after declining during the last two years, owing to continuous improvement initiatives to improve recoveries. Strict cost control measures have been implemented to conserve cash in the short term.

Goldplat says its focus remains on increasing its by-product market share in South Africa as it expects reductions in by-products received from current mining operations owing to changes in their production profile.

During the quarter, the company paid the last monthly instalment on the loan from Nedbank. The loan of £3-million was used to buy back 16.6% of shares from minorities in South Africa in 2021.

The company says it continues to focus on the work required to begin processing its old tailings storage facility (TSF), which has a Joint Ore Reserve Committee (Jorc) Resource of 81 959 oz in 1.43-million tonnes at a DRDGOLD processing facility.

Since the completion of the Jorc resource, about 800 000 t of material have been added to the facility at grades of about 1.45 g/t as per plant data and not included in current resource statement.

The processing of the old TSF remains dependent on the approval of the water use licence by local authorities and approval from third parties in certain areas for the installation of a pipeline to the DRDGOLD processing facility.

During the first quarter, says Goldplat, there have been several engagements with all parties involved and good progress has been made, with the aim of getting all approvals completed by June 2025.

The company says its cash balances in the group remained strong at £3.1-million at the end of the quarter. The cash balances will mainly be used to manage working capital requirements in Ghana and repayment of intercompany loan balances and other capital requirements.

“I am pleased with what our teams in the two business units have achieved during the quarter. In Ghana, the team managed to implement several new processes and procedures in a short period to focus the business on local beneficiation, and in South Africa, streamlined the operations due to lower visibility of supply of material.

“This was all done while maintaining operational profitability. There is still significant work to be done, but all our efforts will create a more robust business providing a niche solution to the industry it operates in.

“The focus for the remainder of the year is to reduce inventory levels in Ghana, whilst increasing cash on hand, improve the local beneficiation solution in Ghana to ensure constant margins, progress the approval of the TSF pipeline, continue cost management efforts in South Africa and increase market share in South Africa,” says Goldplat CEO Werner Klingenberg.