Goldplat plc (LON:GDP) Chief Executive Officer Gerard Kisbey-Green caught up with DirectorsTalk for an exclusive interview to discuss their preliminary results for the year ended 30th June 2018.
Q1: Gerard, your final results are out today, as a starting point can you give us a quick run through the headline numbers?
A1: I think at the headline number level, an increase in revenue for the year of about 6.8% and this is mainly driven by a higher gold price, dollars per ounce, and a slight increase in gold sold for our own account during the year.
When you drop down to the group operating activities for continued operations, there was a decrease and that’s mainly due to a one-off bad debt write off of £320,000 and the losses as we’ll talk about later on, losses in the mining exploration segment.
Lastly, finance costs were up significantly on the previous year and that’s mainly due to high interest charges on borrowings and then we’ve entered into quite a lot of pre-financing sales to refiners to expedite the revenue to them and also to secure contracts.
Q2: Looking at Goldplat’s operations in more detail, South Africa remains your standout producer, has all gone well here during this year?
A2: Yes, South Africa is a very mature operation and it’s continued to be so, and, on most levels, it’s contributed most to our numbers. Significant things on the process side during the year were that we finally resolved the rand refinery that had been going on for a couple of years. We also acquired a strategic stock pile of material for our carbon-in-leach circuit and obviously, in local terms, we received a very high, in fact record local gold prices in grams per ounce.
Possibly on the negative side, the stock dam that we want to start reprocessing, during the course of the year we didn’t secure an alternative tailings deposition facility which is still ongoing. Also, progress on the platinum group metal side was slower than we would’ve liked, and it will surely be our focus for this year going forward.
Q3: Next up is Ghana, the figures show a decrease in production compared to last year but am I right in saying that last year’s number a slightly skewed as a result of a large on-off contract during FY17?
A3: Yes, that is correct and it’s similar to the case in South Africa. To be honest, I did not articulate what I saw as our base line production levels for both recovery operations in the absence of any one-off large contracts, but we do strive to conclude and complete at least one large one-off contracts as each of the operations during the year.
As you said, at the beginning of this year we didn’t get one done in Ghana, I’m not extending that, we had quite a few successes there, we completed the installation and commission of the elution plant and we cleaned up the plant, generally the stockpile material at the plant during the year. So, I think we stand in good stead now to process very efficiently material going forward.
Progress at procuring material and sorting materials from outside of Ghana, and primarily the focus is, as you know, West Africa and South America, progress I think is very good, albeit it didn’t translate during the year into sourcing of big batches of material. We are very confident as a team that these will come through in the current financial year.
Q4: Finally, Kilimapesa gold mine in Kenya. Achieving profitability on a sustainable base at Kilimapesa I know was a key focus for you during the year, what is the current status at the mine?
A4: At the mine, in terms of the processing, we are still at the stage 2 expansion at the plant, at plant 2. The result of this during the year was we achieved the production levels we were looking for, but the grades are lower than what we’d hoped, and we need to put more capital in in the near future really to progress to stage 3, increase the throughput and make the lower grade material that we’re managing to mine the source profitable.
So, the result is our loss at Kilimapesa is similar to those of the previous financial year where we’d hoped to eliminate those losses completely, if not make some profit, at least be close to breakeven at Kilimapesa so very disappointing.
What I have announced previously is that we are seeking to secure financing or investment of some sort into Kilimapesa from outside parties to help us to get to a point where we can install or commission stage 3 of the processing plant, hopefully get to sustainable profitability there.
Q5: Looking ahead more generally, you state that within the 2-year period you want to build primary mining production.so that it matches that of the recovery operations. How are Goldplat planning on achieving this?
A5: The 3-year plan was a 3-year plan and we’re now 1 year down the track, so it has become a 2-year plan. What I’ve said before is we’re not going to explore and build mines, it’s not our area of expertise and neither do we have the capital and neither do our shareholders want us to do that.
We are, and will continue to be, looking opportunistically for production or very near production assets that we can acquire in some sort or other. Bearing in mind, our status in the pecking order as a junior miner and finance resources to new capital, we’ll keep looking but we’re not going to take ounces and acquire ounces just for the sake of it.
So, we’ve been quite hard looking at a number of different projects, it only really takes one large acquisition or a couple of smaller ones to get to the target. Once we find something, it could take anything from 6-18 months to conclude it but it’s just a matter of finding that asset and keeping our ears to the ground and keep looking.
I’m still confident at this point in time, that the 2-year horizon to conclude that is achievable.