Goldplat Share Discussion Threads

[sea7] 08/5/2020 10:14

lowtrawler

goldplat have identified areas where supplies exist
they have partnered in places like south america with locals to assist in procurement.

They have contracts in place with all but one of the big miners in south africa - Harmony is the one they do not have a contract with.

the standard pricing model goldplat now use is the average of the last 28 days gold price and is only determined at the point of processing, not when the material is stored onsite awaiting its turn.

Goldplat must keep strategic stockpiles as it blends and adjusts the grades and type of materials to optimise the circuits. E.g - higher gold price - lower grade material processed, lower gold price, higher grades pushed through

they already do mine clean ups etc - such as in Uruguay - most recently.

Contracts are structured...

goldplat buys material upfront and stores it - for own account.
goldplat takes material, processes it, returns all gold to supplier, less processing charges, Sometimes as gold, sometimes as cash.
Goldplat takes material and has a split based on expectations of recovery - eg 50/50.

Goldplat and the supplier take three samples from the material and have it assayed for content. Goldplat keeps one, the supplier keeps the other and the third is held by an independent third party -to remove any disputes later on. This also determines prices or type of contract.

[michaelfenton] 08/5/2020 10:10

Lowtrawler - nice piece. The problem with Goldplat is management. They have slipped up so many times that no one takes them seriously. On paper sure they look like a tinpot organisation but when you dig deeper you discover forgotten and valuable assets. The core business offers so much but management are distracted by ongoing problems such as Kili and they are so slow to deal with what they are sitting on - stuff just sits there for years on end. Most of us on here are longterm holders who have been waiting a long time to monetise our assets. Kili is such a good example and so far it is all words and no action except increasing losses. Stockdam etc? With POG sitting at 1700 and quite likely to hold or rise lets have some action please whilst the door is firmly open. Ramp up production and lets pile up the cash?

[lowtrawler] 08/5/2020 09:05

Agreed on the narrative Kimboy2 but if you had an asset up for disposal, I think you'd probably describe it in positive terms. No different for GDP.Clearly, as gold climbs, we will get more interest. In my view, if they can extract any possibility of value from kili whilst removing the costs, risks and resources then they should take it. I'd like to see them concentrate on the recovery business and create a model which they can replicate internationally.

[michaelfenton] 08/5/2020 07:30

Covid19 escalating fast in Ghana, 49% increase in the last week - not sure about Kenya and no one will want to take on Kili if they cannot mine? Africa as a continent has only 9 intensive care beds per million people. So Virus could again be a factor for Goldplat.

[avsome1968] 07/5/2020 23:08

Also if gold can climb a few more steps say closer to 2k per oz it will go and not for free, valuable asset in recent RNS, deal could come anytime, gold back up strongly.

[kimboy2] 07/5/2020 18:18

I don't think the BoD are in the give it away camp as they keep referring to it as a 'valuable asset'.

[lowtrawler] 07/5/2020 12:10

I'm in the let's give it away camp. At the moment it's loss making and draining our resources. Any way to get rid is better than none.

[russman] 07/5/2020 10:34

Over the years GDP have that they have stockpiles of x,y&z.
It would be useful to know roughly what the wip is quarterly.
& the TSF could be years away.

[pog1234] 07/5/2020 09:54

Spot on Kim, reasonable depends on many things including your own view/beliefs! Either we just want to get rid of it for free or token amount/earn out = direct saving in cash flow or we believe money could be made, either some or a lot = price negotiation

Right now it appears that no buyer believe they can make money since no deal has materialized, or that GDP thinks more money can be made than the buyer = they cant agree on price...

[michaelfenton] 07/5/2020 09:48

Not for me to say but would depend on what is on the table? I do not know how to value Kili?

[kimboy2] 07/5/2020 09:42

What is reasonable?

[michaelfenton] 07/5/2020 08:53

I do not have faith in the management when it comes to mining. Kili has been a total disaster and still is in my book. So lets get shot of it and not continue with the line that it is a valuable resource. It is a loss making mine. Any reasonable offer considered. Lets face facts?

[kimboy2] 07/5/2020 08:32

I think the great probability is that they will sell Kili, or maybe find a partner.

If in a couple of years they have loads of inventory and the recovery operations are going full blast, and they have £3m in the bank doing nothing ... then it is an option.

The fact is their record on Kili has been terrible. IMV part of the problem is that it is difficult to get the calibre of people you would like to manage a gold plant producing 7kozs pa.

[pog1234] 07/5/2020 08:19

Michael, Kili is worth a lot´or nothing as Kimboy says. It is only worth something if someone is willing to make the required investments.
The following factors are some of the things which affect the value:
1. Loss-making mine, i.e. risk
2. Capital required to increase production and make it profitable, i.e. capital required
3. Political risk in Kenya
4. Gold price remains high
5. Most likely you will have to believe there is more gold in the ground and be willing (have the capital) to drill and find it to increase your resources and invest even more to increase production further making the upside a lot better than the meager 10K/year which is planned - I think this is key, otherwise who would take on such a risk we are talking about for a part of a mine which will not make a killing?
6. Goldplat risk, GDP has never been a mining company as such and thus have limited experience from building and running a mine compared to pure prospecting and mining companies - who would invest in a company with limited experienced running the mine for you?

All in all, I think GDP has to sell all of Kili or make the investment themselves. Finding an investor IMHV will be difficult. My best bet for a partner to become interested would be to try to find someone who wants to take on less risk with GDP remaining as a co-partner. Both invest cash and expertise and GDP stays invested to secure continuity. The plan would be to expand the resources by drilling as well as making the current business profitable.

[michaelfenton] 07/5/2020 08:08

Thanks Kimboy - very nicely put. The question still remains do we really want to be a miner in Kenya? GDP is a small company and needs to concentrate on it's core business? JMO.

[kimboy2] 07/5/2020 07:47

The value of any gold mine will depend on the cost of production. The plan is for selective mining to get ore out at 4g/t and produce at 7kozs pa.

To produce sufficient ore at this grade requires investment in the mine itself. This is primarily what they are looking for.

The project AISC was around $1050/oz. Whether it would still be this, or lower with additional investment, remains to be seen.

This AISC number includes the capital cost in terms of depreciation of the plant. I would expect the actual cash cost of production to be around $750/oz.

That is why I think it is a valuable asset, even if gold is $1200/oz.

As for why it can't find a buyer I think the problem is it falls between two stools. It is too big for a small time private punter, and too small for a large investor.

If GDP wants to get full value from Kili then it will need to spend the $3 - 4m itself IMV. ATM it is not in a position to do that and the cash it is generating is better spent on building up inventories to feed the recovery plants.

That may change.

[michaelfenton] 07/5/2020 06:57

Kimboy can you please educate me as to why you think Kili has such value and why they cannot find a buyer? Most of our assets seem of little value as reflected in the SP?

[kimboy2] 07/5/2020 05:43

I don't think it is worth anything. On the other hand I suspect that Kili is worth more than the market cap of GDP.

That doesn't mean anything though unless you can find someone to stump up the cash.

[avsome1968] 06/5/2020 22:45

Evening all

If we manage to sell Anumso what price are we talking about?

[michaelfenton] 06/5/2020 13:39

Yes I posted it on LSE as macaumike.

[lowtrawler] 06/5/2020 13:23

Extracted from LSE (where I think you posted it Mike?)

Goldplat - quarterly update, production getting back on track...

Goldplat (GDP) has updated emphasising that it is “pleased to report the progress made on key initiatives during the period, while maintaining profitability” and “with all the recovery operations restarted as of 20 April 2020 the group should continue generating profits during the last quarter”…;

It noted its South Africa business was placed on care on maintenance 5 days prior to quarter-end and, though its Ghanaian business was not required to close, “not all circuits could be operated at full capacity towards the end of March” there. Overall, “the cash and cash equivalents on hand at date of the announcement was £ 3,200,000”. That compared to “approximately £2.8 million of cash on hand and access to facilities of £500 000” on our prior update.

There will also be some current quarter impact – the restart of production in South Africa is at a reduced output and Ghana circuits could still not all be operated at full capacity in April for instance, but also noted is for South Africa “plans to increase production to full capacity shortly” and Ghana “operations should return to normal capacity during May we expect… will make up for most of the lost production during the last quarter”. It is also noted “the group continues to benefit from the higher gold spot price”, and the shares have responded higher to 4.45p capitalising the company at £7.5 million. The share price compares to around 3.5p when we previously updated, concluding the lockdowns will end at some stage and meanwhile the gold price is set to rocket. So now is NOT the time to sell. In fact BUY.

With the last half-year results having showed a gross profit of £3 million on revenue of £12.5 million, with “administrative expenses” £0.7 million and the share price still comparing to more than 7p reached in February when the outlook for gold was arguably not as strong as it is now, our stance remains buy.

[sea7] 06/5/2020 12:32

excellent MF - further indications of SA society returning to normal

[michaelfenton] 06/5/2020 12:00

Rand Gold smelter being fired up again this week.