Goldplat Share Discussion Threads

[kimboy2] 25/3/2022 13:47

DRD are quite interesting. They will have much lower costs than GDP for processing. Every $100/oz they save earns an extra $4m.

It seems clear that GDP haven't bitten off DRD's hand (or whoever it is). In the interims GDP say a key initiative is;

Evaluating the investment into larger tailings storage facility and additional mill and leaching capacity to enable us to reprocess our current TSF;

Not really sure why DRD doesn't just take over GDP and that would sort out the negotiation. They could pocket the TSF and sell what's left probably for a good deal more than they would need to pay.

Perhaps Martin Ooi's shareholding is a bit of a block.

[lowtrawler] 25/3/2022 11:03

ds2, thanks for those informed comments.

I assume they would special dividend profits from the TSF. If so, those dividends could easily match the current share price.

They have obviously been exploring options for the past 6 years and I hope they can reach a position in 2023 where they have agreements and permits in place to begin exploitation of the TSF. If so, those special dividends might be paid in 2024 and 2025. At least we can live in hope!

[dangersimpson2] 25/3/2022 09:56

I don't think they will get the full amount, since the focus now seems to be getting it processed by a third party. Hence all the talk of pipelines etc. The natural choice in the area is DRD Gold since there used to be a pipeline between the two areas and the ducting etc. is likely to still be in place.

I've asked them in the past why DRD are not jumping at the chance to process 2-3g/t tailings when they are currently doing 0.5g/t. The answer was that the Golplat tailings are not "clean tailings" i.e. from primary mining but instead are a mix of all sorts that have been processed over the years.

My guess is that we will end up with some kind of pre-circuit at Benoni to concentrate/remove impurities and then the pipeline to DRD, or similar.

Therefore the profits after costs are likely to be split with the third party. But this likely still makes this the best option since it significantly reduces the capex, but more importantly, reduces the time to process. Getting say $16m over a couple of years is much better than $32m over a decade, particularly where we are in the gold cycle. Plus the eventual tailings are someone else's problem, which means the investment into tailings dams at Benoni is significantly reduced.

The TSF really is the icing on the cake though, 2-3p EPS is very possible for this year from normal ops, and with an improving outlook, this should easily justify a share price 2-3x the current price. It will require consistent delivery and them keeping to their word about shareholder returns for this to happen, though. If the TSF then kicks off in this environment then we should be starting to see the multi-bag potential we all know is there but remains obscured by historical issues.

[frogkid] 25/3/2022 06:48

Many thanks folks

[kimboy2] 24/3/2022 12:42

Well IIRC the original statement said 16% using existing techniques. However there was an interview shortly afterwards with the bloke from Creamers, and he is a bit of a bluff cove, and he got Gerard to say at least 40% recovery. The Creamers bloke said words to the effect of 'come on we all know it will be at least 50%'.

The actual university report got recoveries up to 70%, though whether the processing is economic to such a recovery rate is another question.

[lowtrawler] 24/3/2022 11:36

Thanks Kimboy, I new higher recovery rates were expected but hadn't realised they had gone up to 50%. Working your numbers across the board as 50% recovery and 42% processing costs, it would give gross profits of $50m and after tax / minority interests, around $32m - around twice our current market capitalisation.

[kimboy2] 24/3/2022 11:26

The University work on recovery was published. Try googling;

EFFECT OF TEMPERATURE, CONTACT TIME
AND AGITATION SPEED DURING PRETREATMENT ON ELUTION OF GOLD
by
TEMITOPE PHILIP OLADELE

[kimboy2] 24/3/2022 11:22

82,000 ozs, plus some more since 2013
Recovery something like 50%
Costs of recovery around $800/ozs last I heard

If they can get a third party to do it then it can be done quicker, without capex at GDP and free up a load of space on the tip. Just a question of the price.

That about summarises the situation

[lowtrawler] 24/3/2022 11:21

frogkid, looking back to the January 2016 JORC. They had 82k ounces Gold; 216k ounces silver, and; 193k lb's of Uranium in the TSF. At the time, they expected to be able to recover 15-20% of the gold through existing circuits.

I believe a higher rate of recovery would now be expected and additional deposits have since been made to the TSF.

Assuming 20% recovery for each - we would have 16k ounces gold; 43k ounces silver, and; 39k lb's Uranium, all for the cost of processing. At current prices, that would be revenue of over $34m and I would estimate processing costs around $10m. Not bad for a company with market capitalisation around $16m.

[frogkid] 24/3/2022 09:37

Hi chaps, the environmental side interests me also. I have a decent holding in JLP. The dividend issue is a tough one. A growing company should be investing cash in growth, not paying dividends. I need to refresh my memory on the TSF...

[kimboy2] 24/3/2022 09:06

Growth is certainly an issue, which is where Kili was meant to step in. In theory it was meant to provide exponential growth from the recovery plants cash flow. For whatever reason GDP couldn't execute that plan though.

I would like them to do more on environmental clean ups. There was some indication of doing more on this some time ago, particularly in Ghana, but it seems to have gone quiet.

[lowtrawler] 24/3/2022 08:19

frogkid, exploiting the TSF would be enough to make the share price explode. What is it, 6 years since it got a JORC? Even if the business fails to grow, it is generating over $3m cash each year and so would provide a very nice yield if only they had a dividend.

[frogkid] 24/3/2022 08:04

I think the biggest problem faced, and why the share price does not really improve, is how to grow the business. I have been in and out of this for years and always been disappointed, but never lost money. I currently have no position. Frog

[russman] 24/3/2022 07:42

No point having a presentation if GDP have nothing to explain.

[kimboy2] 23/3/2022 07:31

One of the problems they have is that they can get outbid for material by others offering cash up front. I know when Gerrard was in charge they were sometimes getting turned over at the last moment in bids for material.

[michaelfenton] 23/3/2022 04:46

Kimboy - I think the company is able to pay a dividend and build inventory? For such a small company they are making great profits? Shareholders are bailing out as they feel the company will never pay a dividend (I expect they will at some stage).

[lowtrawler] 22/3/2022 22:19

Thanks for that explanation kimboy. I hadn't realised sourcing was still a problem. I now understand why you would prefer inventory to be built than dividend to be made.

[kimboy2] 22/3/2022 18:45

They have had continuous problems in Ghana sourcing material, which are only now being resolved. In the interims they say about Ghana;

We experienced a steady and reliable supply of materials from our regular clients during the period and this significantly contributed to the 146% increase in revenue year on year to £10,710,000 (H1 2020: £4,359,000).

The target was some time ago to achieve 20kozs pa from Ghana.

There is no inventory in Ghana the last I heard.

South Africa is moving to processing lower grade material because of a lack of material.

In SA the raw materials fell from £3.4m in June 21 to £2.7m in Dec 21. This is I reckon 2 years supply in SA. Whether there is enough for every circuit is another question.

[dinky00] 22/3/2022 16:19

EPS doubles, share price falls 14%That makes sense

[lowtrawler] 22/3/2022 13:59

The poor results in 2018, at least partially caused by lack of supply, kick-started them into a stronger supply focus. That has reaped benefits with the current good supply levels. I am concerned if they build up large inventories, they will lose focus on the supply.

I can understand that supply is patchy so more inventory is required than would be the case with a widget maker. However, 2 years seems more than ample and your desire to reach 5 years seems overkill. I am also concerned on how this might impact current suppliers - as I understand it, they are paid as we process the material, if we don't process material for 5 years, it is a long time for them to wait.

[kimboy2] 22/3/2022 12:44

What makes you think we have a steady supply? Ghana certainly hasn't and I believe that SA has been constrained sometimes.

[lowtrawler] 22/3/2022 12:41

Kimboy, why do you feel we need to hold many years of inventory? If we have steady supply - which we have had over many years now - surely the aim should be to reduce inventory to a minimum.

[kimboy2] 22/3/2022 08:57

Yes GDP selling the GCAT shares was a big vote of no confidence IMV. The ones who make money at GCAT will be those who take up the last fund raising at the derisory price, not the early punters.

On the dividend I would much rather they build up inventories of ore than give out a dividend. I notice that stocks fell in the last numbers.

If they can say that they have 5 years of profitable raw material on site then GDP will be re-rated from 2 or 3 at present to something more respectable.

I reckon it may take something like £4m to get to this. They have perhaps 1 - 2 years stock atm.

On Werner I thought that Gerard did a pretty good job in difficult circumstances, apart from Kili of course. I have still not heard of any convincing explanation of why Kili failed to live up to expectations. It absorbed about 10 years of profitability.

Since Werner took over various of Gerard's projects have started to bear fruit, including the dumping of Kili. There has also been the benefit of an increased gold price, which will float all boats.

We shall have to see on Werner, but it is certainly better to have a lucky general than a good one.

[michaelfenton] 22/3/2022 08:03

Yes Gerard KG has always been adept at taking care of himself?

[lowtrawler] 22/3/2022 07:49

As far as I'm concerned, the sooner we get out of GCAT the better. They are burning through cash and a workforce size that cannot be supported by the size of mine. Will be amazed if anyone other than the directors make money.