GoldPlat Regulatory News (GDP)

Goldplat plc / Ticker: GDP / Index: AIM / Sector: Mining & Exploration

20 February 2023

Goldplat plc

('Goldplat', the 'Group' or 'the Company')

2nd Quarter operating results update

for the period ended 31 December 2022 ("Q2")

Goldplat, the AIM listed Mining Services Group, with international gold recovery operations located in South Africa and Ghana, servicing the African and South American Mining Industry, is pleased to announce an operational update for Q2.

The two recovery operations continued to produce good combined operating profit during Q2, albeit down 41% on a strong Q2 period during the previous financial period, of £1,382,000 (Q2 2021: £2,356,000) (excluding listing and head office costs and foreign exchange losses).

The Ghanaian operation continues to perform well as a result of the steady supply of material and achieved an operating profit for Q2 of £1,026,000 (Q2 2021: £1,012,000), however the South African operations have been impacted during the last two months of Q2 by electricity cuts by the electricity provider in the country. Notwithstanding the electricity cuts, the South African operation achieved an operating profit for Q2 of £356,000 (Q2 2021: £1,344,000).

The electricity cuts we referred to in the quarterly update announced on 8 November 2022 have continued into Q3 and are expected to continue to some extent at least until the end of calendar year 2023. We have been evaluating our options to manage the situation. Generating our own electricity through the use of diesel generators or renewable energy sources currently does not prove to be feasible and we will instead focus on easing the bottlenecks created as a result of the reduction in electricity supply and increase output during periods of electricity availability through focussed management and initial capital outlay of less than £50,000. We will also adjust processing methods on some material to increase capacity through our plant to limit the impact that this has on production through our incineration units.

Not all of our production circuits have been impacted to the same extent, with our by-product's circuits having more capacity to deal with supply of material. Regarding the by-products, we received a large supply of material during December 2022, which has been processed during December 2022 and January 2023 and we will see the sales of this material coming through during Q3.

Goldplat processes an assortment of material throughout the Group from different clients and on different contracts making use of a wide range of plant and equipment. The Group has been delivering profitability for the last 12 quarters, which is in line with management's focus on ensuring sustainable cashflow and profitability.

Whilst we cannot predict the level of electricity supply for the rest of the year, should the electricity cuts in South Africa continue at the current level, although we still expect to generate operating profits over Q3 and Q4, we believe it is unlikely that we will be able to meet market expectations for the current financial year. We will keep the market updated with regard to the impact of the electricity supply and on the progress of our business generally.

The application for a pipeline to the DRD Gold premises is still being evaluated by the authorities and although we have indicated before that it will be by no later than June 2023, the timelines for when approval will be received are not that clear and we will update the market once we have more clarity. The pipeline will provide Goldplat Recovery Limited with the ability to process the existing Tailings Storage Facility ("TSF") which contains a JORC resource of circa 82,000 ounces of gold (Table 1) at a DRD Gold processing facility. The negotiations of the terms and conditions of processing our existing TSF at a DRD Gold processing facility still need to be finalised.

Goldplat has identified, and to an extent secured, material in ECOWAS ("The Economic Community of West African States"); however, the export and processing of these materials remains dependent on approval from government officials. We continue our engagement with the governments and mines in the ECOWAS to agree processes and controls on the export of gold bearing products and remain encouraged by the value we have identified that we can offer in these countries.

The majority of material processed in Ghana during Q2 was from clients inside the country, however we secured a larger consignment out of South America during December and we should see the returns from this during the last two quarters of the current financial period.

We continue with our expansion into South America on a measured basis, and we have identified a location and property which we are negotiating to procure for less than £100,000.

The construction of the new TSF started in Q2 (to 31 December 2022) and while we aim to have this completed by the end of Q4 (to 30 June 2023), some delays may result due to the rainy season in South Africa and additional preparation work required.

During the period we made a strategic investment of £150,000 to obtain the usage of a small spiral plant for our gold operations in South Africa and acquire a 15% shareholding in a fine coal recovery technology company. Goldplat has an option to invest an additional £1.5m, which will increase our shareholding in that business to above 50%. This investment would be used to operationalize the technology through the construction of a fine coal washing plant in Mpumalanga, South Africa. Management is still evaluating this option which would provide us diversification in our recovery operations into a different commodity, namely coal, of which significant resources are available in South Africa, with opportunities not just for processing but also for environmental rehabilitation.

During Q2 the Group incurred capital cost of £253,000 and we are estimating that we will require a further £1,500,000 during the next 12 to 18 months to be spent on repairing and maintaining current operations, and on improved lining of the new TSF and improving the environmental impacts of our current processes.

Cash balances in the group remained strong at £2,920,000 at the end of Q2 (Q2 2021: £1,452,000). We still have significant balances invested in inventory and debtors with main exposures to smelters in Europe and South Africa.

Werner Klingenberg, CEO of Goldplat commented: "I am pleased to announce continued profitability in the Group, particularly considering some of the challenges we are facing. Our solutions have always been flexible and unique and I believe that the team will find a way to handle the impact of electricity cuts in South Africa, whilst reducing their impact on our results.

We still see opportunity for supply in West Africa and we continue to increase our supplier base in South America, supporting further investment in the region.

Our aim remains to increase visibility of earnings through, becoming a partner to the mining industry, by maintaining and increasing our value offering to clients, improving our environmental management and processes and expanding our processes to increase the types of by-products and waste we can beneficiate and also through identifying and securing previously mined resources."

For further information visit www.goldplat.com, follow on Twitter @GoldPlatPlc or contact:

The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

Table 1

Mineral Resource Estimate of the TSF, South Africa

The Tailings Mineral Resource Estimate was announced in accordance with the JORC Code (2012) in a press release on 29 January 2016. Mark Austin of Applied Geology & Mining (Pty) Ltd was the Competent Person responsible for that announcement. The Company confirms that all material assumptions and technical parameters underpinning the Resource Estimate continue to apply and have not materially changed.