GoldPlat Regulatory News (GDP)

26 Jul 2006 07:01

Goldplat plc26 July 2006 Goldplat plc / Ticker: GDP / Index: AIM / Sector: Mining & Exploration 26 July 2006 Goldplat plc ('Goldplat' or 'the Group') Admission to AIM Overview • Goldplat is an established producer of gold and platinum group metals ("PGM") recovered from by-products, such as woodchips, fine carbon and grease, of the mining process • Listed on AIM today having raised £1.5 million • Existing operation in South Africa with supply relationships with wide range of mining companies including Anglogold Ashanti, Goldfields, Harmony, Placer Dome, Impala Platinum, Lonmin and Anglo Platinum • Mining operations in South Africa are obliged to dispose of mining by products in an environmentally friendly manner - Goldplat's ongoing availability of raw materials is therefore not dependent on particular mines with finite resources • Plans on course to establish a complementary recovery facility in Ghana • Management team with many years' experience in the recovery of gold and PGMs as well as gold production from mines • Defined strategy to become a leading junior gold mining business supported by revenue generated from the gold and PGM recovery operations Goldplat CEO Demetri Manolis: "Our intention is to create a successful juniormining house focussed on gold production assisted by revenue secured from theGroup's recovery business, which extracts gold and platinum group metals fromby-products of the mining process. Our main operation is in South Africa, whichhas established relationships with the major mining houses, who all have a needas well as an environmental obligation to dispose of their by-products. It isthe intention to expand our operations into Ghana where we will service theexpanding West Africa gold industry. We intend to utilise the cash flowgenerated from these operations as well as our experience and networks withinthe industry to identify gold deposits of 200,000-2,000,000 ounces of containedgold in order to fulfil our strategy and build value for our shareholders." Goldplat plc has raised £1.5 million through a placing of 20,000,000 NewOrdinary shares at 7.5p per share giving the Group a market capitalisation ofcirca £7.8 million and has listed on AIM today - 26 July 2006. The funds raisedwill be used to complete the acquisition of Goldplat Recovery (Pty) Limited,establish a complementary recovery operation in Ghana, evaluate gold miningopportunities and for general working capital. HB Corporate is the NominatedAdviser and Broker to the Company. Through its wholly owned subsidiary, Goldplat Recovery (Pty) Limited ('GoldplatRecovery'), the Group is an established producer of gold and platinum groupmetals ("PGM") recovered from by-products of the mining process. Its plant inSouth Africa is located near the centre of the East Rand Goldfield and rawmaterial feedstocks are sourced from many of the major South African miningcompanies including Anglogold Ashanti, Goldfields, Harmony, DRD Gold, PlacerDome, Bema Gold, Simmer and Jack, Impala Platinum, Lonmin and Anglo Platinum. The safe disposal of mining by-products to Goldplat Recovery fulfils animportant aspect of the mines' environmental management programmes as well asproviding an additional income stream. The Directors believe that GoldplatRecovery is the leading operator in its field in South Africa. Strategy The Directors intend to make a number of improvements to the existing plant,which will enable Goldplat Recovery to be competitive in the higher gradesection of the market. The Group also plans to expand its operations to process by-products from goldmines in West Africa and an initial contract has already been secured withAnglogold Ashanti. Production of gold is expected to commence towards the end of2006 at a plant to be constructed in the Free Zone Port of Tema in Ghana, thesecond largest gold-producing country in Africa. The environmental permitsrequired to secure the site have been obtained. Operating costs in Ghana areexpected to be considerably lower than those at the existing plant and the newplant will also process materials with a much higher gold content. In tandem with the expansion of the recovery business, the Directors' strategyis to take advantage of their considerable experience in the gold mining sectorto become a junior gold mining company in Africa. This will be achieved byutilising the cash flows generated from the by-product processing operations toidentify and evaluate opportunities. Accordingly, the Board is currentlyreviewing a number of opportunities and is in exploratory talks in relation toprojects in Ghana, Mozambique and Kenya. Operations Goldplat Recovery operates from a freehold site of 22 hectares near Benoni inGauteng, South Africa near the centre of the East Rand Goldfield. The sitehouses the processing plant and raw material stockpiles. In addition, GoldplatRecovery has surface rights over an adjacent site of 12 hectares where itproposes to establish a tailings facility in 2007. After testing to establish gold or PGM content, moisture content, recoverabilityand size, Goldplat Recovery purchases the materials from the mine operator(occasionally it will undertake a joint venture whereby the mine operator sharesin the resulting profits). In order to provide a high level of service to itscustomers, Goldplat Recovery's policy is to purchase raw materials when theybecome available. This also helps management to schedule production in anefficient manner as well as making it more difficult for potential competitorsto enter the market. Goldplat Recovery's extraction processes and multiple process lines enable it tokeep materials separate, which provides a high degree of flexibility whenproposing a solution for a particular type of material. The processes which areemployed include roasting in a rotary kiln, crushing, milling, thickening,flotation, leaching, CIL, elution and smelting of bullion. Recently, a gravityconcentrator was installed in the low grade circuit and a second flotationsection has been erected in the underground line. It is intended to install afluidized bed furnace in the high grade circuit. Production is scheduled to make the most efficient use of the materials takinginto account the ore grade and anticipated recovery factors. Raw materials areblended and routed to the various plants in an effort to ensure that productionlevels are reasonably consistent from month to month. In some cases, similarmaterial can be treated in different plants. The wide variety of materialsstockpiled means that the company can benefit from being able to blend materialsfor more effective processing. Precious metals are usually recovered from materials within a single process. Insome cases, there may be a second process which takes place many monthsafterwards, for instance where the residue from processing very high gradematerial is left to oxidize in a stock dam in order to enhance the overallrecovery rate. Such stock dams can contain substantial amounts of gold and PGM. Goldplat Recovery's plant is designed to process a variety of material, such aswoodchips, fine carbon and waste grease. The final product for sale can eitherbe smelted gold bars, or gold or PGM concentrate. Goldplat Recovery is also interested in the rehabilitation of mining areaswhere, although mining operations have ceased, material has been left in thearea containing gold or PGM which is difficult to extract, and may haveenvironmental problems such as low level radioactivity. Trading Record and commentary Year ended 31 Year ended 30 Year ended 30 Period ended 31 June 2003 June 2004 June 2005 Mar 2006 £ £ £ £Continuing operationsRevenue 120,767 2,935,958 3,743,475 2,593,197Cost of sales (76,258) (962,759) (2,868,093) (2,358,775)Gross profit 44,509 1,973,199 875,382 234,422Administrativeexpenses - (683,727) (242,165) (262,801)Operatingprofit/(loss) 44,509 1,289,472 633,217 (28,379)Operatingprofit/(loss)- Discontinuedoperations 24,121 22,259 (22,733) 1,347Totaloperatingprofit/(loss) 68,630 1,311,731 610,484 (27,032)Finance income 3,975 13,356 34,338 4,784Finance expense (41,146) (38,234) (11,313) (14,652)Netprofit/(loss)before tax 31,459 1,286,853 633,509 (36,900)Tax - (171,947) (224,425) 9,671Netprofit/(loss)after tax 31,459 1,114,906 409,084 (27,229) The increase in revenue over the period reflects the commissioning of the PGMflotation circuit during the year ended 30 June 2003 and the purchase of thegold plant towards the end of the first quarter of the following year. The yearended 30 June 2005, the first full year of operation of both plants under themanagement of Goldplat Recovery, saw sales of gold and PGMs reach 10,900 ouncesand 3,851 ounces respectively. This reflected a combination of higher processingthroughputs offset by lower recoveries compared with the previous year. Theaverage revenue per ounce of gold showed a marginal increase to £229 (2004:£224) whereas PGM prices weakened from £366 to £334. Total revenue fromcontinuing operations for the year ended 30 June 2005 increased by 27.5 percent. to £3.7m. The results for the nine months ended 31 March 2006 were affected by a number offactors which were either operational in nature or were the result of decisionstaken for the benefit of the year as a whole and the longterm efficiency of theprocessing plant. These included investment in a gravity concentrator and twoflotation circuits in order to increase recovery rates from higher gradematerial by up to 30 per cent. The company also took steps to increase itsburning capacity to improve recovery rates by making major repairs to the kilnand installing seals. Furthermore, during the period two additional mills wereacquired to provide extra capacity at the low grade milling circuit andflotation circuit and two sets of spirals were purchased to be used inconjunction with the fluidized bed furnace. Current trading and prospects Following this period of investment in the first nine months of the year, themanagement accounts of Goldplat Recovery for April and May 2006 indicate thatthe unaudited profits for this two month period amounted to approximately£65,000 before tax and after adjusting for costs associated with the AIMflotation. The Directors consider that the operational outlook is now favourablebut believe that the full effect of the recovery in profitability will only beevident in the Group's results for the year ending 30 June 2007. Mining opportunities The Directors are currently reviewing a number of gold mining opportunitieswhich they believe will add significant value to the Group and complement theexisting and proposed gold and PGM production plants in South Africa and Ghana.The Group is currently in exploratory talks in relation to projects in Ghana,Kenya and Mozambique. Typically the Directors will be seeking to acquire golddeposits comprised of between 200,000 and 2m ounces of contained gold. Directors Brian Moritz, aged 70, Non-executive Chairman Brian is a chartered accountant and the former Senior Partner of the Londonoffice of Grant Thornton, one of the leading international accounting firms. Heis currently chairman or director of a number of junior mining and explorationcompanies, the majority of which operate in Africa. He also specialises inadvising companies, mainly in the area of flotation. In his former role at GrantThornton, he was registered by the London Stock Exchange as a nominated adviserqualified executive for companies seeking admission to the AIM Market and aListed Company sponsor. Demetri Manolis, aged 49, Chief Executive Demetri was born in Cyprus and gained his mining and metallurgy degree in 1981at the Technical University of Athens. He worked in chrome and bauxites mines inCyprus and Greece until 1983 when he emigrated to South Africa becoming a SouthAfrican citizen. In 1986, he obtained his Certificate of Competency for MineManagers. Between 1989 and 1992, he was variously General Manager and ManagingDirector of Consolidated Modderfontein Mines Limited, a goldmining companylisted on the Johannesburg Stock Exchange. Between 1992 and 2000, he wasManaging Director of Gravelotte Mines Limited, a privately owned undergroundgold mining company. Here, he and his team grew sales from ZAR 1.6m in 1992 toZAR 45.4m reaching a peak net profit of ZAR 10.1m in 1999. Demetri becameManaging Director of Goldplat Recovery in July 2000 and together with IanVisagie, he took over management control of Goldplat Recovery in November 2000and its rapid increase in profitability since then has been under hisleadership. Ian Visagie, aged 46, Finance Director Ian is a South African citizen. He trained as a Chartered Accountant with KPMGin its Pretoria office. Having gained post qualifying experience with KPMG hemoved into a mining environment in 1990 when he joined ConsolidatedModderfontein Mines Limited as financial manager where he first worked withDemetri Manolis. In 1992, he joined Gravelotte Mines Limited as financialmanager. He joined Goldplat Recovery in March 1997 as financial director. WithDemetri Manolis, he took over management control of Goldplat Recovery inNovember 2000. John Woolgar, aged 66, Non-executive Director A former stockbroker, John has 35 years' substantial and diverse Cityexperience, principally involving private investors in smaller companies. As aformer corporate adviser, he raised funds for over 30 companies by way ofOfficial List and Unlisted Securities Market flotations, Business ExpansionScheme and Enterprise Investment Scheme private placings. He conceived the ideaof Web Shareshop (Holdings) Plc as a cost effective method of attracting largenumbers of private investors into new issues and as a delivery system forprivate funds into placings. More recently (in 2004) he co-founded ZariResources plc (now Genesis Petroleum Corporation plc) as an AIM-listedinvestment company and oversaw its reverse takeover of Genesis PetroleumCorporation Limited. Similarly (in 2005) he co-founded Zareba plc (now QuadriseFuels International plc) and oversaw its reverse takeover of Quadrise FuelsInternational Limited. Following Admission, it is the Directors' intention to appoint an additionalindependent non-executive Director. * * ENDS * * Contacts:Demetri Manolis Goldplat plc Tel: +27 (0) 11 4231203 Mob: +27 (0) 82 454 7392Ian Visagie Goldplat plc Tel: +27 (0) 11 4231203Brian Moritz Goldplat plc Tel: +44 (0) 20 7298 2222Hugo de Salis St Brides Media & Finance Ltd Tel: +44 (0) 20 7242 4477Luke Cairns/ Edward Hutton HB Corporate Tel: +44 (0) 20 7510 8600 This information is provided by RNS The company news service from the London Stock Exchange