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LONDON (Alliance News) - Goldplat PLC on Friday said it has installed new equipment aimed at improving the production and efficiency of its gold recovery operation in South Africa and secured a new contract with its third-party refinery.
The new equipment will clear the previously accumulated backlog of material that needs to be processed and improve profitability at the operation, whilst the contract with Rand Refinery follows in the wake of previous problems between the pair earlier in the year which had caused the backlog.
Goldplat shares were up 8.9% to 2.45 pence per share on Friday afternoon.
The South African miner's subsidiary Goldplat Recovery (Pty) Ltd runs a plant in South Africa which processes by-products from the mining process to recover gold.
Goldplat has now installed a new electric boiler at the plant which is currently being commissioned and this will have a "significant impact" on the treatment of the backlogged material that was accumulated in the first half due to problems with its third party refiner, Rand Refinery.
Goldplat is aiming to have the backlog cleared by the end of 2015, which has had a "positive impact" allowing for an additional two kilogrammes of gold production per month from the existing wood chip stockpiles, it said.
The ZAR2.5 million spent on the new wash plant is expected to be recovered within six to seven months, it said.
"We are very pleased to announce the completion of certain capital projects, which we believe will have an immediate positive impact on flexibility and ultimately profitability of the operations. Particularly satisfying is the fact that despite the cashflow problems experienced throughout the past 18 months, Goldplat has managed to, and continues to manage to, finance strategic and essential capital projects internally," said Chief Executive Gerard Kisbey-Green.
In addition, the company said it has entered into a contract with Rand Refinery, whereby Goldplat will be paid to treat and refine gold and silver from Rand.
"This is expected to yield silver and gold for which Goldplat will be paid treatment and refining charges. The high-grade circuit will be dedicated to processing the material under this contract for an initial two months," said Goldplat.
The material that was supposed to be processed through the high-grade circuit will now be processed through the low-grade circuit which is scheduled to be commissioned in mid-September.
The miner has also commissioned a new wood chip wash plant
"Regarding Rand Refinery, we are pleased that despite the challenges, the relationship between Goldplat and Rand Refinery is strong and that we continue to find mutually beneficial ways to work together," added Kisbey-Green.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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