Goldplat plc (LON:GDP) Chief Executive Officer Gerard Kisbey-Green caught up with DirectorsTalk for an exclusive interview to discuss their interim results for the six months ended 31 December 2017 and the final settlement of Rand Refinery dispute.
Q1: We’re chatting this morning about Goldplat’s results for the 6-month period to 31st December 2017, in your opinion what are the highlights for that period?
A1: I think, generally speaking, the progress being made on all the current project as well as towards our strategic objective across the operations, that has been the collective highlight. These are many and include:
• The sourcing of sufficient volumes of appropriate quality by-product material on all our operations, the strategic goal for all our operations.
• Securing material for the carbon-in-leach (CIL) circuit in South Africa and we’ve achieved that by acquiring the stock pile.
• Developing Ghana as our hub for international growth and we’ve made great progress in West Africa as well as South America.
• Installing and commissioning of an elution plant at Gold Recovery Ghana where the elution column itself has been commissioned and we plan to pour our first gold bar in the middle of March so good progress there.
• Growing production at Kilimapesa so that the operation becomes profitable on a sustainable basis.
Q2: Talking about the numbers, do they reflect the positive progress that you’ve been talking about?
A2: On a Group basis, yes absolutely, and relative to the same period in the previous financial year, as well as if you were to annualise the numbers to give an indication of performance for FY2018. On that basis, I think we’re very pleased with the results.
If you look them on the production and sales side, all the operations are showing steadily improving results. Of course, you need to drill down further, we don’t have time to drill into each number, but I’d like to highlight a few relevant areas to help our investors to understand.
For example, in Ghana, the production is lower on a comparative basis, but that is per our plan, we planned lower production less ounces but better-quality ounces in terms of the grades so we’re delivering on our planned financial outcome.
At Kilimapesa, the trend is good, it’s upwards but below our plan. There we’re affected by election-related issues during the period and so the build-up in production is slightly behind what we had planned.
On the financial side, the operating profit of just under £1.6 million for the period was up 56% on the previous interim period which is fantastic. Capital expenditure was just over £1 million, that’s on plan and the cash reserves are strong, notwithstanding the fact that during the period we spent £800,000 on procuring a strategic stockpile of feed in South Africa and we spent about £500,000 on repayment of debt. Profit before tax was down mainly due to unrealised foreign exchange losses.
Q3: What progress has been made on the various initiatives in Ghana, your recovery growth platform?
A3: A number of things are happening in Ghana and as you pointed out, it is our planned platform for growth of our recovery business.
So, first of all, we’ve been commissioning the elution plant, that began at the end of December 2017 and that commissioning has performed well. We are currently installing the rest of the associated equipment and infrastructure and we plan to have our first gold pour in-country by mid-March. This is a big step forward in terms of in-country beneficiation so we’re really happy with that.
Secondly, in Ghana, we are now receiving material on a regular basis from three different South American producers and our reach into the region is improving all of the time. We have also made good progress elsewhere in West Africa and we’ve got a very nice consignment of material en-route from an existing client in East Africa. So, all going well really on the procurement side, developing Ghana as that hub.
During the period, we had acquired and shipped to Ghana a small pilot plant to use on our artisanal tailing clean-up project and as investors are aware we’re working with the government on this. We’ve been asked by the government to put it on hold whilst other parts of the government’s strategy are put into place and then we’ll kick off that strategy.
Q4: Finally, I noted that Goldplat have made good progress on the Rand Refinery dispute, what can you tell us about that?
A4: We are delighted to be able to report that we have agreed upon a full and final settlement of the dispute with the Rand Refinery. They have paid Goldplat Recovery an amount in settlement which contractually we are not in a position to elaborate on.
That said, what is most important to me, with the dispute is over, is not as much the financial effects and the fact we’ve been paid something back but more importantly, we no longer need to waste any management time on the issue and we will have no ongoing legal fees. In all cases when you’re in a legal dispute, there’s legal risk out there with respect to the outcome so now we can renew our long-standing relationship with the Rand Refinery, have a fresh start and do business together in a way that is mutually beneficial to both parties.
So, this is a great outcome and a great relief for us all at Goldplat.