From the RNS:
We continue to focus on the work required to begin processing our old TSF which has a JORC Resource (January 2016) of 81,959 ounces in 1.43m metric tonnes (Table 1), at a DRD Gold processing facility. Since the completion of the JORC resource, circa 800,000 metric tonnes of material have been added to the facility at grades of circa 1.45g/t as per plant data and are not included in the current resource statement.
I.e. Goldplat has in excess of 120.000 Ounces of Gold in the TSF! Not bad. |
Yeah, this is exactly why they shouldn’t take on debt to pay a dividend. Disruption at a government facility turned a £2.5m PBT quarter in Ghana into a £0.5m quarter and probably impacted net cash at the BS date from £4.5m to £2.5m. It only pushed the revenue into January, but if they had banking covenants based on accounting periods they could have had issues. Whereas with net cash they are fine. |
Classic mixed bag. Again. |
 Lowtrawler,
Their debt is expensive for them, and taking on debt means that any short-term issues before the TSF is delivering could cause the business to fail, and shareholders reap none of the rewards. We've seen a number of issues in the past and the company has survived to generate the current high rates of cash flow because they held net cash and are cautious in how they use that cash. With a 30% shareholder, I doubt this policy will suddenly change.
Personally, I'm all for them spending a couple £1m to get a smaller-scale TSF processing in place if it accelerates the medium-term cash flow and puts pressure on DRD to deliver in a reasonable timeframe. I'm not in favour of them using debt to do it, just so they can pay a dividend as well. Others more vocal than me appear to be campaigning for dividends before any additional capex, whether the company has high IRR uses for that cash (which internal TSF processing may be) or not. If this campaigning is effective, one corollary will likely be having to wait for the DRD pipeline to process the TSF.
Either way, someone will not be happy. This is probably why the board largely ignore anyone's opinion apart from Martin Ooi! |
ds2, why would investing in capital for processing the TSF prevent dividends?
There is clearly a strong investment case to process the TSF and it should be funded from debt. Why use retained earnings for the TSF investment? It is a mistake consistently repeated by GDP. The most expensive form of borrowing is always from retained earnings - investors require a higher rate of return than any bank - yet GDP have consistently used retained earnings rather than borrowing for investment.
One of the surest ways to improve shareholder returns is to increase leverage and ensure maximum return of retained earnings to shareholders. |
On the gold recovery rate I think if we go with DRD then it will get chucked in the general mix and the recovery rate may be 25-30%. If GDP did it themselves they would be able to do a more tailored solution and may be able to get 50%.
The gold price is presently $2,900/oz and there are 120,000 ozs sitting outside their back door.
If we assumed 50% recovery, reasonable (possibly) given the university studies, and costs of $1200/oz we end up with a gross profit of over $100 million.
That will take a hell of a long time for the SA operation to earn at the present (declining) rate.
A senior director told me, a few years back, that they could churn it on the spot to process it and that was an option.
It would be interesting to know why that wasn't being considered now, assuming it isn't. |
At current gold price we are one of the most undervalued stock in the market |
DS. Couldn't agree more.
I sent an email two or three weeks ago to a director making this point, but I haven't had a reply so far.
Seems to be a general radio silence atm. Perhaps we will get a Q&A with the Q2 numbers. Don't suppose the important queations will get answered though. |
Getting the TSF processed is starting to become a priority at these gold prices. I think 50% recovery is optimistic, personally. But even at 30% recovery, there is around £85m of revenue, says costs $1000/oz then we are talking about £50m of PBT split between Goldplat and DRD.
If the pipeline/commercials aren't sorted soon, I suspect it would make sense at these prices to start processing it through the existing plant at Benoni. We know they have spare capacity as byproduct delivery has been declining recently, although it will probably require some additional equipment to pre-process before it can go back through the existing plant. Processing rates will be much slower than sending it all to DRD, but no one is going to complain if we get a couple of £m additional PAT now rather than a bit more in 2 years' time. |
we will see - i'm baffled.
this morning i was looking at solgold - a big gold explorer trying to become a producer in ecuador but the huge 3000 million float put me off!! Goldplat doesn't have this issue and should be printing cash but i've got too many already. |
This has got to be the cheapest GOLD producer on the LSE/AIM.
Q2 trading update due this week will no doubt be very upbeat. |
I should add that $10m increased npv is pure profit. There is no added cost associated with selling gold at a higher price (beyond tax) |
Nobody suggested $26m. I stated $10m, or around 4.5p per share. Thats assuming 50% recovery. Just because the shares haven't moved yet, doesn't mean there isn't a material underlying truth to what i have stated. I suspect the only proof some will accept will be absorbed AFTER the shares have risen to 15p+. To each his own |
wigwammer, gold has risen about $220 in the last month and there could be around 120k ounces in the TSF. If it were all fully recoverable, that might indicate $26.4m of additional sales value. However, we know that nothing like 100% will be recoverable and we also know there will be costs per ounce recovered. Any recovery is at least 2 years away and will then happen over a number of years. When you piece everything together, even with optimistic assumptions, it is unlikely the value added is as much as $10m. IMV, taking the latest price of gold, the pre tax NPV of the whole TSF is unlikely to exceed $60m.
Now, that's not to be sniffed at when the whole company is trading at around $15m valuation. Simply getting any element of the TSF included in the GDP share price would put a smile on all our faces. |
Around $10m added to the pre tax npv of the TSF over the last month |
the stock price is baffling. this should be trading at least double if not treble the level its trading at! |
There should be a quarterly trading update over the next week or so. With the share price nudging up in the last few days, perhaps it will make pleasant reading? |
Goldplat went back to the labour court again in december 2024 regarding a longstanding case where they dismissed employees in 2016 for theft...
Resultantly, the application for condonation of the late delivery of the
application for leave to appeal stands to be dismissed. I am, however not inclined to
award costs against Goldplat having considered the principles of law and fairness. |
Imagine GDP valued 900m |
isn't goldplat a bit like drdgold? Sibanye Stillwater 50% of it... market cap 909.53M! |
anyone think this is goldplats, ghana subsidiary.
taken from asante golds financial statements in relation to their ghana minining ops at bibiani and chirano mines.. expressed in thousands of $ ('000)
b) Gold refining contracts
During the year ended January 31, 2024, the Company received deposits of $5,153 related to a contract for the treatment of fine and contaminated material containing gold. Under the arrangement, the customer extracts gold from the material and the Company is paid for the gold net of refinery costs. The deposits represent advance payments from the customer that occur when the material is delivered to the customer and revenue is recognized when the material is refined into gold. During the nine months ended October 31, 2024, the Company received additional deposits of $5,233 from the customer and earned $10,386 of revenue from the extraction of 5,566 ounces of gold. |
Lowtrawler. After so many banana skins I feel I have waited long enough. I am not happy with the management and disappointed by the lack of apparent action by Martin Oii.
Finally I have found what I consider a better home for the freed up cash which is AAZ. Do your own research if interested.
I will keep my paltry 50,000 shares for now. In case? |
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