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(Alliance News) - Goldplat PLC's shares fell sharply on Thursday as the company revealed second-quarter production difficulties in two of its units.
Shares in Goldplat were down 10% at 3.37 pence each in London on Thursday morning.
In the three months to June 30, production in Goldplat Recovery Ghana was below expectations following difficulties in sourcing processing materials. A trial batch of new materials has been received from a new client in Mali, and Goldplat hopes this will result in continued future business on a larger scale.
The Ghana unit made "considerable inroads" in developing markets in Ivory Coast, Mali and Burkina Faso, Goldplat said.
Production in Kilimapesa Gold, Kenya was halted after it was put on care and maintenance in May. Remaining stockpiles will be treated on-site to reduce maintenance costs, Goldplat said.
On a more positive note, Kenyan authorities have begun refunding Kilimapesa's VAT claims for the first time. To date, USD200,000 has been refunded.
Goldplat Recovery Pty Ltd, based in South Africa, maintained "good production levels" during the quarter, achieving the planned margins despite production in June lowering.
The company said: "Production during the last month was lower as a result of a planned trial on
a stockpile batch of the lower grade strategic material which was processed for evaluation purposes."
Goldplat is currently engaging in cost-cutting initiatives which will save the company GBP500,000 per year. Cost-savings have already improved efficiency in the South Africa unit, the company said.
Goldplat broke even in the second half of the year so the company expects to make a full-year operating loss at broadly the same level incurred during the six months ended December 31.
In the six months to December 31, the company made an operating loss of GBP653,000.
Chief Executive Werner Klingenberg said: "We delivered continued profitable production in South Africa during the quarter and achieved substantial savings by putting Kilimapesa under care and maintenance. In the next quarter, we aim to accelerate the progress of growing the greater West
African market.
"Management's continued priority will be to maintain the established momentum of the recovery operation and improve the reliability of sourcing material. Discussions regarding seeking an investment partner for Kilimapesa Gold remain ongoing and we hope to update the market in due course."
