Goldplat Share Discussion Threads

[kimboy2] 19/3/2017 11:37

On tailings I was fairly astonished by the numbers in a feasibility study from DRD (I think) that were on this board a while ago. IMV GDP would have trouble competing with the big boys in this area. Size really does matter.

However I suspect that there is a load kicking around in Kenya from artisanal sites if nothing else. They have first mover advantage there, and some brownie points in the bank.

There is a jorc 68kozs on the Red Rock license for a start.

[sea7] 19/3/2017 11:30

Yep, Goldplat has never enjoyed a deep market. It has always been thinly traded on average. Not a traders stock.

The stock dam is likely to be a real share price trigger, when some details are released, about costs and timeframes. As long as they keep doing what they are doing then those Q3 results onwards, should be as good as you hope for KB, if not better.

[kimboy2] 19/3/2017 11:22

The GDP share market is fairly thin so it only needs one investor with a relatively modest budget by normal standards to have a significant effect.

I am expecting the Q3/17 results to be very good as the gold produced will be at record levels and the deficit at Kili should be much reduced.

There is also the stock dam in the background which will be a material event. I am hoping we get an RNS when the pit is signed over, which it was suggested is in process. The buying could be related to this.

[sea7] 19/3/2017 11:18

could bode well for the TSF at goldplat...

Meanwhile, Pan African’s Barberton Tailings Retreatment Plant (BTRP) produced 28 590 oz of gold at an exceptionally low all-in sustaining cost of $332/oz. It also increased gold production by almost 18% and paid for itself in just 18 months, Mining Weekly reported last month.

[sea7] 19/3/2017 10:59

I expect goldplat is also attracting investors who have seen that the issues of the past are largely resolved and that it is moving into profitability at all three operations and are now happy to invest. They see the uptrend intact, the business moving forward and have more confidence in making purchases.

[kimboy2] 19/3/2017 08:51

We will never know of course but I don't think the news would incline someone to think that GDP was a no brainer. There was no reaction once the news was released.

It may be that there is still news to come that the buying is ahead of. I was wondering whether it was related to these Kenyan licenses.

However I suspect the greatest liklihood is that it is just a straightforward investment decision. If they keep buying next week then we will probably find out who it is.

[sea7] 18/3/2017 11:48

Ds,

Thanks for the link.

You may be able to control your own news releases, however, as soon as you include third parties, the chances of someone doing a bit of early chatter is greatly increased.

We will see next week if the news has a further impact on the shareprice and whether or not any of the buying last week gets flipped. Whilst we won't know for sure, however, in the absence of any holdings rns's, we may have seen a few, in the know traders take some positions, with a view to a 10% return in a short space of time.

It does not matter for those with a longer view than the next couple of weeks though.

On the subject of the RR dispute, as time rolls on, it fades into the background further. Whilst it is still there, I get the feeling that whatever the outcome, it will be a footnote somewhere, in amongst a wider update.

[sea7] 18/3/2017 09:25

On the subject of a takeover, if someone was aiming at acquiring the whole business, then they would be looking at a substantially higher price to acquire at than the current level.

In my view the current price does not reflect the fixed assets or the stock dam and only covers the stock markets view of ongoing trading valuations. So buying as much as possible below what an acquirer thinks it is really worth makes sense, even if the price gets bid up a bit as a result. They would still end up with a bargain overall.

I suppose one way to quantify the effect of the rand dispute is that the scipion facility may only needed to have been $1 million in the first intstance and not two, had the invoices been paid when submitted and not questioned.

[kimboy2] 18/3/2017 08:57

The real question is how much can this extra $2m increase profiability.

This year they are only committed to building the Ghana elution at a cost of $2m. However they are also increasing production substantially which will absorb working capital.

While it is relatively easy to work out the financial effect of the elution column it is difficult to work out the effect on production as we don't know how much there will be.

One thing I think we can say. With South Africa producing at record levels, producing record profits and a surging share price it is transparent that the dispute with RR has had little effect on GDP.

The real effect is that it denies GDP over $1m dollars of working capital that could be usefully employed increasing profitability.

[kimboy2] 18/3/2017 08:43

It is not a takeover. Why would someone want to bid the price up?

[sea7] 18/3/2017 08:26

All in all its a good facility to have, as its on demand and whilst around 10% interest, which seems pricey, however, as KB pointed out, interest rates in SA are 7%, so on reflection not too out of the ordinary. I expect the slight premium takes into consideration all the issues the company has faced over the last few years.

Goldplat now has a pre-payment facility in place with aurament to accelerate payments for concentrate, a pre-export facility in place for capex demands, two refineries taking product and plans to enhance and grow the business at both recovery plants, at kilimapesa and gaining a wider reach in the search for feedstock.

Perhaps they will also be able to easily repay the $250k loan taken out in kenya, if they haven't completed that already.

...................

With regards to whose buying and why, I guess from our perspective, unless it is someone accumulating with the intention of launching a takeover, then it is largely irrelevant to us.

[sea7] 18/3/2017 08:14

from the rns

We will use the funds initially to complete stage two of the processing plant expansion at Kilimapesa and to repay the capital made available to Kilimapesa Gold Limited from other group subsidiaries for goods and services rendered. The result will be a cleaner and more appropriate group capital structure and availability of working capital for our recovery businesses."

So, stage 2 will move swiftly forward and the elution column will gain traction as well in Ghana.

As Gerard stated that this facility can be extended and increased...

The Loan Facility is available for a period of 360 days from the date of first draw-down and the term can be extended, or the size increased, on the mutual agreement of both parties. Interest is payable on amounts drawn under the Loan Facility at a rate equal to LIBOR plus a margin of 9.5 per cent per annum.

The good thing here is that it is not a term loan and is a revolving-pre export financing facility, which allows drawdowns, repayments and further drawdowns on demand. The 360 period is the initial period to determine the repayment rate and I expect would continue to be used as a benchmark to calculate ongoing repayments, as drawdown and partial repayments are made.

.............

Security on the drawn amounts has been granted over Goldplat Recovery (Pty) Limited's ("GPL") tailings facility in South Africa, intercompany loan agreements, contracts and proceeds of sale with gold refiners, and the collection bank account operated by GMR for that purpose.

My understanding of pre export financing is that, revenue is required to flow directly to the financier, who deducts interest and charges and then returns the balance back to the borrower. This would mean money flowing into goldplat from refinery sales, would go to scipion first, interest, charges, repayments taken and the balance sent onto goldplat.

[sea7] 18/3/2017 07:58

Dangersimpson,

I did think that there were no persons or groups, which would be able to gain by ratcheting up the share price for an equity raise, however, included it is one of the possibilities.

Since the rns, it would appear that abnormal trading volumes in the three days preceding the announcement, amount to a leak somewhere.

If volumes return to the usual pattern then it will be fairly obvious.

[kimboy2] 17/3/2017 14:55

There is an update from VSA;



One or two things I noticed.

Firstly they state that stage 3 of Kili is due to be completed in H2/17, which is something that hasn't been confirmed by GDP.

Secondly they say the loan will be repaid from profits of Kili within the year. That would imply profits from Kili of about £1.8m for a full year. This would be an annualised turnaround of over £3m profit from H1/17.

The implication is that GDP intend to purchase material from South America with the cash. Presumably it gives them an advantage purchasing and allows them to get their feet under the table.

[ironstorm] 17/3/2017 14:26

Ah so thats where the leak was . . .

Good news though lets see if this generates further interest from the General Investing Public.

[kimboy2] 17/3/2017 14:18

Yes very good news IMV. The interest rate may look steep but interest rates are 7% in SA, and of course the money is to be invested in projects which yield 100% pa.

The $2m, by happy coincidence, happens to be the amount needed for the Ghana elution column. I am still expecting it to be up an running by the end of the year.

I notice that the facility can be increased and extended. Be interesting to know how far. I think the present known future investments are;

Ghana elution - $2m
SA elution - $2m
Stage 3 Kili - $0.5
Stock dam - $0.5

With cash flow and facility we could get most of these done this year, IMV.

[dangersimpson2] 17/3/2017 13:53

There we go:



Loan financing not equity. LIBOR +9.5% isn't cheap but this is South Africa.

[dangersimpson2] 17/3/2017 12:46

I doubt anyone is buying to push the price up for an equity raise because there is no one whose interest it is in to do so. It can't be director or company buying or that would have to be declared. No one holds enough to make it worth them trying something like that - the dilution spared would be small in comparison to the money spent.

So occam's razor says that this is normal buying pressure by a person or people who believe the company to be materially undervalued.

Now it could be that the company or their brokers have been engaging in presentations to raise the profile of the company and the rise is in response to this. I don't think this would be related to any capital raise though - unlike most companies Goldplat have actually been quite open about their strategy - that there are some capital expenditures that would generate significant returns to shareholders if they were accelerated through a capital raise (equity or debt) however they have to balance the future step change in profitability vs the dilution caused (equity) or change in risk profile (debt). Gerard stated that they would only consider equity at levels in excess of 10p which was clearly the minimum level that they felt would balance those things at the time. I would expect as time goes on and more of those rapid payback capex items get internally funded from free cash flow then the acceptable level will rise. One day the share price may reflect that balance or it may remain below that level until all significant capex has been internally funded and we won't see a fund raise.

What is good is that the increased trading activity increases liquidity and means that more investors would be willing to consider a microcap like GDP as an investment. It's a shame that the spread hasn't tightened more to reflect this though. A large spread is not a big impediment to the returns of a long term investor but can be a psychological barrier for those interested in investing in the company.

[danielmiller1] 17/3/2017 12:37

IT certainly works over you oh great stupid one.

LolololololololololoDID YOU CAPITALISE ON HARVEST LIKE I TOLD YOU YOU WOULD LOLOLOLOOLOLOLOLO DAN DID

LOLOLOLOLOLOLOLOLOLOL SUN IS SHINNING BRIGHTLY THERE OR WERE YOU STILL SHOOTING THE MESSENGER LOLOLOOLOLOLOLOLOLOLOLOLOLOLO

[sea7] 17/3/2017 11:30

Yep, sitting on nice gains, tks.

[wigwammer] 17/3/2017 11:27

Well done to those that held on.+50% ytd.The correct judgement was clearly to act on the positives rather than focus on the negatives.

[sea7] 17/3/2017 11:24

strong buy side again today.

The patterns over the last few days, almost give the impression that each trade alternates sell then buy. Either coincidence, or someone actively selling into the market and buying again into a different vehicle. I wouldn't think two people would actively create their own market to transfer their stock to each other, as it is easier to arrange in one hit.

Then we could have a concerted effort by unnamed parties pushing the price up, for an equity raise, or as KB indicated, Martin Ooi aggressively buying.

A lot of these trades are blocks of 50k, 25k, 100k shares which is not the usual pattern of retail buyers, who normally focus on buying odd amounts which round up to figures such as £1k, 5k, £10k etc.

Imo either someone is pushing the stock or someone is mopping up all these sells for reasons we are not aware of.