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Goldplat (LSE:GDP), a gold recovery specialist focused on South Africa and Ghana, reported a significant increase in profitability for the fourth quarter on Tuesday.
The AIM-listed company achieved a combined operating profit of £4.36 million for the three months ending June 30, marking a 267% increase from £1.19 million during the same period in 2023.
The company highlighted Ghana’s substantial contribution to this performance, where it realized an operating profit of £3.74 million, up from £0.44 million in the previous year. This growth was driven by a consistent supply of materials from Ghana and South America.
In contrast, the South African operations saw a slight decline in operating profit, totaling £0.62 million compared to £0.75 million in the fourth quarter of 2023. This decline was attributed to reduced by-product supply from existing mining activities. Consequently, the company is focusing on expanding its market share and implementing cost-saving measures to address these challenges.
The company reported a profit before tax of £2.96 million, reversing a loss of £0.59 million from the same period last year. This figure included £0.41 million in interest costs and £1.05 million in foreign exchange losses related to trading activities.
Goldplat is also assessing potential impairments linked to royalties receivable from the Kilimapesa sale and has made a tax accrual of £0.32 million for a tax liability in Kenya.
In Ghana, the performance of the combined gravity and flotation circuit has been promising, particularly in processing lower-grade fine carbon material. However, the recovery of gold dore bars from some concentrates has been slower than anticipated, prompting a review and upgrade of the recovery processes.
The company plans to allocate around £0.9 million for facility upgrades in Tema, pending local authority approval. In South Africa, Goldplat is focusing on cash conservation and improving operational efficiency. The company has spent £0.8 million on generators financed through a local South African bank and anticipates spending an additional £0.5 million on maintenance and environmental improvements over the next year, funded from internally generated cash flow.
Goldplat is also progressing with plans to process its old tailings storage facility (TSF), which contains a significant JORC resource. Progress depends on securing a water use license and finalizing agreements with third parties for pipeline installation.
As of the end of the fourth quarter, Goldplat’s cash balances were £3.8 million. These funds are earmarked for reducing trade finance requirements, repaying intercompany loans and debts, addressing increased working capital needs in Ghana, and covering capital expenditures.
Chief Executive Officer Werner Klingenberg expressed satisfaction with the group's strong performance in Ghana and emphasized a major focus on local beneficiation, TSF processing, cost reviews, and business realignment in the declining gold market in South Africa.
At 1239 BST, Goldplat's shares rose by 4.84% to 6.5p.
