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Preliminary Results
Goldplat plc, the AIM listed gold producer, announces its preliminary results for the year ended 30 June 2014.
Overview:
– Focussed on growth of market-leading gold recovery operations in Africa
– South African gold recovery operation became the first secondary gold producer to be accredited as a “Responsible Gold” depositor, significantly enhancing competitive advantage – certification already positively impacting contracts, profits and cash flow
– Significant cost saving initiatives implemented across all operations through renegotiated contracts, upgraded infrastructure and improved efficiencies to mitigate effects of lower gold prices during the period
– Additional revenue streams identified in South Africa, including potential diversification into highly prospective recovery opportunities in Platinum Group Metals
– Evaluating new site location for Ghanaian CIL operations following decommissioning of previous site
– Opportunity to increase Ghanaian client reach and internationalise fine carbon operations – first consignment of material received from North Africa and opportunities identified in Australia and South America
– Continued progression of discussions with Joint Venture partners to advance the development of the Kilimapesa Gold Mine in Kenya
Financials:
– Operating profits of £153,000 (2013: £2.64 million) – Company returned to profitability in H2 2014
– Loss before tax of £248,000 (2013: profit £207,000)
– Net cash position of £1.66 million as at 30 June 2014 (2013: £2.36 million)
Chairman’s Statement (Excerpt):
The year ended 30 June 2014 has been a challenging period for Goldplat, but one from which it has emerged strongly, having cemented its position as the leading gold recovery company in Africa. In particular Goldplat has obtained certification in South Africa as a producer of “Responsible Gold”, a status not achieved by its competitors and one which has enhanced its competitive advantage. The strong performances from the recovery operations in H2 2014 are expected to continue into the future.
In my statement last year I said that the first half of the period under review would be a difficult trading period, but that we expected improvements to show during the second half. That has been the case, and, at the operations level, the losses of the first half have been more than recovered in the second half.
These results must be seen against the background of a substantial reduction in the gold price. For the year ended 30 June 2013 this averaged approximately US$1,600/oz., while, for the current year the price averaged some US$1,300/oz. It follows that the same volume of gold sales would result in income of some US$300/oz less than for FY 2013, and this difference is reflected in the reduction in turnover of £7.884m.
Goldplat’s exposure to the gold price is mitigated by the fact that it can, and does, adjust the price of gold bearing material it purchases, thus putting it at an advantage compared with a mine reliant on a finite orebody. However, the major part of Goldplat’s costs are processing costs, which do not vary with the gold price, and as a result the main factor in the improving trading position has been the rigorous cost control measures introduced by management across all operations. Together, the executive Directors have refocused the recovery operations resulting in a strong H2 2014 performance that eliminated the losses of H1 2014 and aligned the recovery operations for further growth in several key focus areas for the next financial year.
Net finance costs of £419,000 (2013: £59,000) comprise primarily exchange differences due to the weakening of the South African Rand. They are non-cash items. The loss before tax is therefore £248,000 (2013: profit £207,000) and the loss for the year is £356,000 (2013: £399,000).
