Goldplat profitability improves in fourth quarter

South Africa and Ghana-focussed gold recovery specialist Goldplat announced a substantial increase in fourth-quarter profitability on Tuesday.

The AIM-traded company said it achieved a combined operating profit of £4.36m for the three months ended 30 June, marking a 267% increase compared to the £1.19m recorded in the same period in 2023.

It said Ghana played a pivotal role in the strong performance, contributing an operating profit of £3.74m - a significant rise from the £0.44m achieved in the same period last year.

The growth was fuelled by a steady supply of materials from both Ghana and South America.

It said its operations in South Africa, however, saw a slight decline in operating profit, reporting £0.62m compared to £0.75m in the fourth quarter of 2023.

The South African operations were impacted by reduced by-product supply from current mining operations, prompting the company to focus on expanding its market share and implementing cost-saving measures.

Amid the strong operating performance, the company reported a profit before tax of £2.96m, reversing a loss of £0.59m in the fourth quarter of 2023.

The figure accounted for £0.41m in interest costs and £1.05m in foreign exchange losses, primarily related to trading activities.

Goldplat said it was also reviewing potential impairments related to royalties receivable from the sale of Kilimapesa, and had made a tax accrual of £0.32m for a tax liability in Kenya.

In Ghana, the performance of the combined gravity and flotation circuit was said to be promising, particularly in processing lower-grade fine carbon material.

However, the recovery of gold dore bars from some concentrates had been slower than anticipated, prompting a review and upgrade of recovery processes.

Goldplat said it planned to invest around £0.9m to upgrade its facilities in Tema, pending approval from local authorities.

In South Africa, Goldplat said it had been focusing on cash conservation and operational efficiency.

The company spent £0.8m on generators financed through a local South African bank, and anticipated spending an additional £0.5m on maintenance and environmental improvements over the next 12 months, which would be funded from internally generated cash flow.

Additionally, the company said it continued to work towards processing its old tailings storage facility (TSF), which contained a significant JORC resource.

Progress on that front was contingent on the approval of a water use licence, and agreements with third parties for pipeline installation.

As of the end of the fourth quarter, Goldplat's cash balances stood at £3.8m.

The funds would be primarily used to reduce trade finance requirements, repay intercompany loans and debts, and meet increased working capital needs in Ghana, along with capital expenditures.

“I am very pleased with the strong operating results achieved by the group during the fourth quarter, specifically in Ghana,” said chief executive officer Werner Klingenberg.

“The major focus for the group is on local beneficiation of material in Ghana, processing of our TSF, review of various cost elements and re-aligning our business in a declining gold market in South Africa.”

At 1239 BST, shares in Goldplat were up 4.84% at 6.5p.

Reporting by Josh White for Sharecast.com.