Analyst Comment9 Jun 2022 13:26
New fair value as profits increase and growth opportunities realised
Goldplat produces gold (plus minor silver and platinum group metals – PGMs) from by-products of mining and plant clean-up. It has two operating recovery plants – one in South Africa and a growing operation in Ghana. Goldplat is cash-generative with an effective management team, focused on growing the business. We recalculate our fair value today using a new methodology, incorporating forward projections of profitability, now that South Africa and Ghana seem on a steady path. Our new fair value on this methodology is 18.7p/sh (from 10.6p/sh), which uses a 3.5x EV/EBITDA multiplier for FY 2023E EBITDA (a multiple that is set at a slight discount to peer companies) and adding in the value of investments and net cash. Therefore, we see upside to the current share price and believe Goldplat to be a useful diversifier to any gold investment portfolio.