Goldplat Share Discussion Threads

[flyingswan] 06/9/2016 18:31

Gold is on the move high at the moment. If we can achieve a breakout it must be good for Goldplats GDP bottom line?

[michaelfenton] 06/9/2016 08:18

Kimboy 2 - good point re the stockpile which had slipped my memory.

[sea7] 06/9/2016 08:17

I would think that any acquirer would be in the region of three times earnings as a starter. Then there is all the other parts to put a value on.

[sea7] 06/9/2016 08:09

The net current asset value is 1.58p per share as at the interims. This figure should have improved greatly, as it is one of the lowest I have seen in goldplats history.

We will see when the accounts come out in 3 weeks.

The working capital ratio in those interims is 1.2, it used to be over 2. I am looking for this ratio to improve a bit as well, as a ratio of 2 is a much stronger position.

[sea7] 05/9/2016 21:20

KB,

To me, the value of the fixed assets, such as the circuits, elution columns etc, only become relevant in a takeover situation, so whilst I make a note of book and NTAV, I generally exclude them from an ongoing operational valuation, as opposed to a final valuation.

Those fixed assets represent a sunk cost and I am interested in what they can produce, not what I can sell them for. Lets face it, used elution columns and ball mills aren't going to fetch that much on the second hand market.

Goldplat should be able to make 20% across the board, year in year out. Once kili is sorted and we are further along the road with the capex programme, then we should be seeing much better numbers than we are already.

[kimboy2] 05/9/2016 20:51

Not sure NTAV is the way to value GDP.

[sea7] 05/9/2016 20:49

Hi dd,

Hopefully he didn't base his decision on that VSA price.

I guess he may have thought, that the price of 6p with a mcap of £10m, PBT of £2m, gives 5 x pretax earnings and that was his point at which to sell.

Each to their own, obviously.

From my point of view, these figures are historic and already over two months old.
Looking forward into the coming year, we should comfortably exceed this £2m PBT by a considerable amount. With the momentum we have at present, it is not too difficult for goldplat to double this PBT figure to £4m, which on 5 x pre tax earnings is 12p a share. This obviously takes no notice of any cash balances that may exist as well.

As you say, none of us really know what may or may not transpire, so all we can do is invest based on what we know and what our assessment is.

[discodave4] 05/9/2016 19:41

Evening S7, hope all is well.Glass half empty - The net tangible asset value (from the interims) is just over 6p if my calcs are correct. NG sold on the 24th the share price was about 6p (the bid had ticked up that day to 5.75 at close so don't know what price he actually got), not too far off the NTAV though, thus wouldn't say he sold too much below (true) value price?.Only NG knows the reason for his selling up, perhaps to just take a decent profit, perhaps he knows 6p is all it's worth in the medium / long term........truth is nobody knows!.DD

[sea7] 05/9/2016 17:28

Talking of ghana,

The company's site in tema is 4.25 acres on a 60 year lease, with the option of extending for another 20 years.

They also signed a 51 year lease on the adjacent property, which is 2.52 acres.
This was originally going to be used for storage.

The ghana site overall is 6.77 acres. As to how much space the remaining equipment and materials takes up, I am not sure, however, there does appear to be a fair bit of space available for future plans.

In comparison the South africa plant is 54 acres.

[sea7] 05/9/2016 17:01

Nicks last purchase was back in june 2015, when the price was 2.25p. I cannot see him having an average price much over 3-4p overall. He is booking a decent profit nonetheless.

He will have his reasons for selling, however, it is not likely tied to the current and future value of this company, if it was then he would not be selling in my view.

We have confirmation of PBT of £2m, so we are comfortably generating this much from the assets at this time. As we have built up to this amount over the preceding year, then the forthcoming year is going to produce more.

With a mcap of about £10m and expected increases in returns, the current p/e is undemanding.

The book value, as at the interims is 10.75p.

Nicks selling on the 24th august coincides with the trading update, announcing PBT of £2m on the same day.

As he has been selling at what can be considered, a below value price, then I would say his reasons for selling are personal and not in relation to this company.

[kimboy2] 05/9/2016 16:24

I suspect he got rid of a few more today.

[michaelfenton] 05/9/2016 13:26

Kimboy2 - have looked closely into this and agree you might be right. he still appears to bne holding a couple of million? So jsy taking a profit on the news?

[kimboy2] 05/9/2016 13:03

If you just look at the 'Y' trades since Aug 24th. May be wrong of course in my presumption.

[michaelfenton] 05/9/2016 12:25

Kimboy2 - True Nick Gomersall sold 1.7M that is public knowledge. Why do you think he has sold more since then (1.2M according to you)?

[sea7] 05/9/2016 12:05

As Nick is below 3% now, we won't get any more notifications.

An overhang of this size, in an illiquid stock like this, definitely has an impact on the ability of the share price.

[kimboy2] 05/9/2016 11:47

Seems clear to me that there is an overhang in the market atm with Nick Gomersall runnig down his holding.

He had 5m and reduced by 1.7m on the 24th August to 3.3m on the back of the £2m profit announcement. I think he has sold at least another 1.2m since then so a couple of million left to go.

IMV there is no doubt that this has held the share price back.

[sea7] 05/9/2016 08:36

There is also general sentiment, that the stock has risen over 200% in just over a year and a significant number are taking profits on the back of the PBT being announced.

This in my view, is to be expected and not indicative of a skeleton in the closet.

We can look at centamin for example, which had a high of 183p per share last month and has dropped off, post results, which were quite good by all accounts. I haven't read them, only the highlights. It was trading at 55p last november and is at 157p this morning.

The reliance on rand refinery was clearly identified as a risk, which bore out and caused all these issues. Hence the use of other refineries, albeit at a slightly higher cost with regards to transportation and time.

We do not have the specifics surrounding the rand issue, however, we do know the worst case impact. Ghana production drop off, is something that ought to be covered soon as it does need answering. We may simply find out that as the EPA and gold licences are in the process of being renewed, that production has been curtailed whilst this process is being carried out. I am not under any illusion as to the speed at which the wheels of bureaucracy turn in Ghana, or Kenya for that matter.

They were after the responsible gold award in Ghana, this may be taking place and
not disclosed for all we know.

In my view the turnaround that has been achieved, despite the issues that crop up has been excellent from a business perspective and is a testament to the standards which Gerard, Hansie, et al have set for the company.

The rand refinery invoice issue is disappointing as it was meant to strengthen the relationship between the two companies by working together in this way. An independent team appointed to go over all the details, give an answer, will not be prohibitively expensive and is a required step before any costly court rooms are booked, which shouldn't be needed at all.

We know about kili and what needs to be done, work is in progress and will take time, nothing we can do about it. It is a legacy asset, that should never have been on the books in the first place, however, it is and we might as well get it into a profitable state as there are likely to be wider opportunities there, especially on the artisanal front.

The bit at the end of the update, stating that the company was profitable after head office and non operating subsidiary costs, was also said at the end of the april update.

I, like all others, are looking for answers to the remaining issues, clarity on the way forward on these matters and progress on the capex programme to date.

We will hear soon enough.

[kimboy2] 05/9/2016 08:12

Agree with much of that though I wouldn't close Kili now. The time to do that was about 3 or 4 years ago.

As for RR I think they have been a shambles and I wouldn't necessarily park any blame with GDP. The more we are independent of this unreliable partner the better.

[shareholder7] 04/9/2016 11:01

You really don't need to be rocket scientist to work out GoldPlat1 SA is worth $19m on its own. This was the valuation 2 years ago when the minority interest was sold and its valuation has since risen. So current market cap of GDP is what our 75% in SA is worth 2 killi loss making and burning cash 3. Rand Refinery nearly bought down GDP because they were at the end of the process and GDP had no alternative 4. Ghana then went into losses as RR refused to take product 5 As soon a RR took GDP production revenue and profit returned 6. Germany used as alternative in the meantime So what does this tell us RR is the key to making GDP successful So what do we do Get into a contract that both sides are disputing and GDP start legal procedures against RRRR then say they can't take any product in August so GDP have to find alternative at high transportation costs and timing issues RR shareholders are GDP customers so what message does this say to them ? Check out their web site So if GDP do this what is the next thing they will do Share price is down the toilet due to this and if they had a great relationship and troll agreement would have worked out we would be looking at a share price of 10 to 12 p after finals Now you have to write off 650k so profit before tax is now 1,350k plus you have legal expenses and time committed Simple really I hate to say it but same old story, what is management up to Too many engineers not enough business people running the company Solution1. Close killi 2. Get into bed with RR and sort out those issues3. Focus on gold recovery 4. Get some experience commercial people in

[kimboy2] 04/9/2016 09:13

There are plenty of things about GDP I don't understand e.g.

1. Why has capacity at SA doubled ? Is it simply down to grades ?
2. What is the RR dispute about ?
3. Why has Ghana production fallen ?
etc etc

One thing that is fairly certain though is the numbers that we have been given. The full narrative behind the numbers is less clear, and imv that will always be the case.

As for the 'gut feeling' that there is something unpleasant going to be revealed in the prelims, well I feel this is an indicator of the particular investor sentiment rather than anything particular about GDP.

I know for example that GDP found out about RR on the Friday and announced it on the following Monday.

Doesn't mean a problem won't be revealed, just unlikely IMV.

Such is the nature of investment.

[wigwammer] 04/9/2016 07:56

Yes, the statements are vague but they are not vague.Try to take yourself a little less seriously.

[discodave4] 04/9/2016 02:31

wigwammer,What is it you don't understand?The statements are clear enough to most people. Posters have explained and your still confused......say no more!.DD

[kimboy2] 03/9/2016 22:35

Crikey.

The biggest problem with all commodity companies is that things can go wrong out of nowhere. The main killer though is that they are usually indebted, which thankfully GDP isn't.

RR seems to be the main negative at present so let's have a look at some figures.

The contract was to toll process silver sulphide and the outcome was 3700kg of silver and 42kg of gold. This is a total equivalent of 2,943 eq gold ounces with a value of approx $3.9m.

The unpaid bill is for $931k. RR have paid some bills but we don't know how much for.

The unpaid amount works out at $316/au oz, plus whatever they have already paid.

As a comparison I have been assuming a cost of processing the stock dam of about $500/oz. While there will be a higher recovery rate with the RR project there is also a profit margin to add on. RR charge a 50% margin for example.

Anyway we obviously don't know all the details, but given what we do know from the numbers given, the amount charged doesn't seem out of the way.

We will no doubt find out eventually.