Goldplat plc (LON:GDP) Chief Executive Officer Gerard Kisbey-Green caught up with DirectorsTalk for an exclusive interview to discuss their positive preliminary results for the year ended 30 June 2017
Q1: Gerard, these appear to be overwhelmingly positive results today, how would you sum up the year for Goldplat, in a couple of highlights and what were your main disappointments for you?
A1: During the last trading update, I said that we expected to exceed market expectations for Profit Before Tax as well as for gold production, we can now confirm both of these.
The operating profit from continuing operations were up 140% to £2.9 million from £1.2 million in FY2016 and this translated into a 43% increase in Operating Profit Before Tax from continuing operations of £2.8 million, up from about £1.9 million, almost £2 million, in FY2016. So, these numbers show continued steady improvements in the results from the company, that’s very positive.
The gold and gold equivalent production increased at all operations with an aggregate up 13.7% to 42,857 ounces, that from 37,000 ounces in 2016. Notably, the 2016 number was on the back of a 23.3% increase in 2016 over 2015.
I think the highlight of the year, in my opinion, is that towards the end of the financial year, we turned to operational profitability at Kilimapesa Gold Mine in Kenya, for the first time ever since acquiring the asset.
When it comes to disappointments, I think probably the first is the fact that we were unable to settle the Rand Refinery dispute during the year and secondly that the plant expansion at Kilimapesa, and consequent profitability, took longer than we had planned. Hence, we weren’t able to make the financial turnaround there that we had hoped for and finally, I guess, our share price performance despite continued improved performance and strong commodity prices throughout the year, the share price hasn’t performed as I would’ve preferred to have.
Q2: Over the past few years, Goldplat has invested relatively heavily in capital projects, what are your plans in this regard to this for the coming year?
A2: By and large, we set about quite an aggressive plan of capital expenditure over the last two years and most of these are concluded, also, I think we’re already seeing the benefits of those investments. The primary capital investment programmes for the 2018 financial year include the construction and commissioning of an elution plant at our Ghanaian operation, which is now well underway, and the Stage Three processing plant expansion at Kilimapesa. On this, I‘ve said in the past, that we’ll only make a decision to proceed once we are happy with continuous and sustainable good results from Stage Two, including the production from the underground mine.
Q3: On Kilimapesa, and more generally on Kenya, do you have any comments on the recent elections and how the current situation might affect Kilimapesa?
A3: Sure, firstly, we were very happy with how the elections proceeded initially. As we expected, we experienced decreased production for about a week over the election period as employees, as you can imagine, needed to return to their voting areas. The subsequent court action and requirement for a new Presidential election is interesting, especially in as much as only two candidates will be voted for and for both of them, this next term will be the last for which they are eligible so we expect quite a hard-fought campaign.
From an immediate Kilimapesa perspective, The Cabinet Secretary for Mining remains the same and we have very good relations with him, the Governor of Narok County was re-elected and most other elected officials who have any degree of influence over Kilimapesa were either re-elected or are individuals who are well-known to Kilimapesa and the Goldplat management. So, we’re very happy on that front.
Assuming that the presidential re-election goes ahead on 17th October, we will be prepared for the production slow-down and we don’t expect any major disruptions to our business. I think, overwhelmingly, we wish the country a trouble-free and a successful outcome of this election.
Q4: Finally, Gerard, you are now in a new financial year, what are the main areas of strategic focus for Goldplat going forward?
A4: To go through the operations, one by one, at Kilimapesa, we’ve got to focus on ensuring that we can produce sufficient quality ore from the underground mine on a sustainable basis so as to produce consistent operating profits and repay the debt in the company.
In Ghana, the focus must be to complete the installation of the elution plant and to focus on diversifying sources of material for this operation, not only within Ghana but, as the market well knows, from South America and elsewhere within Africa.
Lastly, in South Africa we need to focus on the carbon in leach (CIL) circuits which are proving most profitable source of business for that operation.
I think more broadly and in the longer term, we need to focus on strategic growth, and we are in a growth phase. In this regard, I have stated our intention to continue to grow the recovery business but also to grow the primary mining side of our business to reach similar production levels to that of the recovery operations within the medium term.