Goldplat Share Discussion Threads

[kimboy2] 21/5/2018 08:10

Just on DD4 issue of contracts being the source of all problems and whether the price of gold was struck at the start or end of the contract they seem to be buying material up front a lot more.

This is no doubt due to the fact that they have more cash these days but gives the supplier cash up front, and no doubt ensures a better price.

This in effect sets the price at the start of the contract, as before.

[kimboy2] 20/5/2018 23:18

Just to add to that at the interims they said they had over 32kozs in stock. The cost of this in the inventory was £1.934m.

That works out at £60/oz. Most of that will be haulage to the Benoni works.

[kimboy2] 20/5/2018 22:34

Well ISTR that the large batch they got for the SA CIL recently cost about £800k. As the batch is about 90kt that will work out at under £10/t.

If you take into account the cost of delivery then it seems pretty dirt cheap.

As this is the most profitable line I don't think price negotiation really comes into the equation to any significant degree.

The major expense is in the processing rather than the purchasing. This is not surprising as the gold is obviously difficult to extract.

[sea7] 20/5/2018 20:43

shareholder - the south africa business is close to capacity most of the time, however they do have spare elution capacity - it is a mature operation.

ghana is being rebuilt after the loss of 90% of the business a few years ago, when the ghana govt stopped the 3rd party tolling that goldplat did with endeavour and the environmental breaches at the CIL section meant it got closed down, the company got fined and that was the end of that section.

It was left with the spirals and incinerator sections which made up 10% of the business, now it is 100% of the business - the company was monitored for 18 months after the breach and with the elution column in place and the remnants of the old stockpiles from the CIL section finally removed, they can expand further.

This has all taken time and returns are being generated in line with the plans at present. The next steps will see production increases in both operations, specifically the TSF in SA and further enhancements in ghana.

[sea7] 20/5/2018 20:30

I do not take it the wrong way, healthy debate with differing views can sometimes unearth things that one or more did not notice, which can make a big difference to an investment case.

[sea7] 20/5/2018 20:22

I understand goldplats business model, how it works and why it works the way it does.

There are a lot of personal relationships with individuals on which a lot is based. The sector of players in south africa, whilst appearing large is not. There is a vast amount of who you know, as well as what you know happening daily.

The type of environment and model you are trying to implement simply doesn't fit the dyamics of the operating environment, nor its players.

I know what you are saying, however, it just doesn't work like that in this aspect of this industry.

There is bidding on some material and yes, goldplat gets outbid at times, however, it has that leverage based on stockpiles to walk away from overbid, overpriced material.

[kimboy2] 20/5/2018 20:22

We are all prisoners of our own experience

[sea7] 20/5/2018 20:13

shareholder - an example of a deal with goldplat and midlands minerals from 2009.




Following initial encouraging assay results from the loaded carbon, Midlands entered into discussions with Gold Recovery, who subsequently conducted a site visit to Sian and took their own samples, the results of which led to Midlands entering into contractual discussions with Gold Recovery. A contract between the two parties has now been signed, and the re-bagging and preparation for shipping of the loaded carbon has commenced. Midlands estimates approximately 100 tonnes of carbon at this time, with the exact tonnage to be determined when all CIL tanks are emptied, and the final weighing takes place.

Under the agreement with Gold Recovery, a charge of US$130 per wet tonne of carbon received will apply and payments to Midlands will be computed as follows:

- For carbon assaying between 30 and 200 g/t gold, Midlands will receive 70% of the agreed gold content;

- For carbon assaying more than 200g/t gold, Midlands will receive 80% of the agreed gold content.

The agreed upon content means the final assay results, upon which, payments will be based. These final samples are taken simultaneously by Midlands, Gold Recovery, and by an 2 independent referee prior to processing. One sample is kept in secure custody for purposes of due diligence.

[sea7] 20/5/2018 20:00

shareholder -- you say.

Firstly you can have a percentage on what the presales people validated

..........

the material prior to purchase has three samples taken, one for goldplat, one for the supplier and one kept by the lab as an independent sample. The results of this sample are then scaled up and a best estimate is taken on the total contained across the whole consignment. The actual amount recovered may be more or less than the samples indicate - this is where the knowledge of those involved comes into play. Goldplat pays a low rate per tonne on some material, such as a few dollars a tonne for low grade and obviously a lot higher for material such as grease that can be contain significant quantities of gold by volume, however, they do not get much of it.

The exact terms of the sourcing teams contracts and what latitude they have with regards to bidding for stock and whether or not they have bonus payments attached to results is not going to be disclosed.

These guys know what they are doing and do it well.

The material as I said earlier must be maintained in stock piles to enable the company to keep the circuits running 24/7. As feedstock is drawn down, it is replaced with newly sourced stock. Materials are blended through the circuits from
different piles to optimise the recovery rates.

you state....


The reason why the share price has fallen was due to missing production targets and not getting in contract

The drop in ghana is documented and reasons given and it was expected in the year plan, however, material being processed ensured continued profitability

The company has numerous contracts in place and material is delivered as it becomes available, which on some contracts can be once or twice a year.

Production was up yoy..

28,534 gold equivalent ounces were sold and transferred during the nine months ended 31 March 2018 (nine months ended 31 March 2017: 27,714 ounces)

The drop off in the share price is due to external reasons more than anything else

Material held on site is processed as fast as possible, however, there must be way more than the circuits can handle for the reasons already stated and for one other consideration - that being, if there is a period where the company is not able to quickly source more feedstock, they have reserves to rely on, to keep that or several circuits in production until they do.

[shareholder7] 20/5/2018 18:29

At last a conversation about salesmen It was not that long ago people were laughing at me to suggest thisThe guy in South America is a keeper, tremendous experience and you would not want to fire him if he did not find enough materials Now we come to compensation You and the board have never put a compensation plan in place as they have never managed a sales teamFirstly you can have a percentage on what the presales people validated Secondly they can be a team target or a payment on Monthly GPThirdly I would pay more for stuff being processed in Ghana as we get 100 percent etc etc etc just needs looking at They are many ways to put a compensation plan in placeFourthly if we have all this material why are we not processing it as go back to the first 2 min of the video The reason why the share price has fallen was due to missing production targets and not getting in contract It's great we are discussing this and I just hope other shareholders can see that GDP business model needs a radical revamp and a sales person on the board / consultant

[sea7] 20/5/2018 11:39

further to my comments...

Good progress continues regarding sourcing of material for GRG with a delayed shipment of by-product material on-route to GRG from an existing East African client and a very successful trip to Peru in February 2018 likely to yield a number of new clients.

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

The part you refer to regarding targets in this business, would be difficult to implement in any satisfactory way.
This is due to the fact that material when sourced, can sit on site for months and months before being processed and even then only a portion of it, as the grades are blended to optimise production, based on factors such as the gold price.

Any sales force, could not really be assessed on this type of result as the exact stockpiles are mixed together in some cases and you could not have quarterly/monthly results and commisions to a sales team when the material may not get processed for nearly a year. Also, you could not really pay sales staff on tonnage, as grade varies and they could buy in tonnes and tonnes of low grade stuff at their leisure to make target, as there is more than enough of that kicking about. They might do alright out of it, however, the company would not.

Goldplats stockpiles are never, ever completely exhausted and are therefore never completely turned into cash. The stockpiles are needed to provide continuous supply and options during different economical changes, such as gold price changes in dollar or rand. The bigger stockpiles also allow goldplat to turn away material that suppliers want to much for.

Do not forget that a lot of goldplats material is contracted in such a way that the gold content is irrelevant.

Goldplat processes the material and returns all gold recovered to the supplier in exchange for processing and treatment fees, nothing more. As there are no other alternative players who provide this sort of service, for the types of material processed, goldplat does not bid for this material, it is delivered as and when the supplier has accumulated enough, a timeline is given on processing, it is processed and then dore sent for refining and returned to the supplier as bullion - no sales team required.

From what I recall some years ago, goldplat has a tariff that is applied for processing and this is known in advance, so there isn't much in the way of negotiating, when it comes to this aspect of the business.

[sea7] 20/5/2018 11:30

The point regarding kili being gerards baby. This mine was on care and maintenance and had been left to rot after demetri left. Ian Visagie did next to nothing with it and it wasn't until Gerard took over in feb 2015, that they began to get it up and running again.

I personally railed against them even starting with Kili back in 2007, I also indicated to Gerard, when he took over that I favoured simply walking away from it and cutting the losses, however, Gerard feels that it can be a profitable operation, so I chose to give him the benefit of the doubt, based on his actual mining experience and my lack of it. We will see which view turns out to be correct, however, gerards is looking right at this time.

As for me having targets to hit, well I have had some in the past, however, that is not for this board.

If you look at the working capital position, you see steady improvements in this area as well, which, as a shareholder, should inspire you with confidence in the companies abilities.

There are always issues and areas for improvement and as long as each one is addressed and resolved or progressed, then we are in the right place.

[shareholder7] 20/5/2018 11:27

Sea are you sure you don't work for GDP?So defensive

[sea7] 20/5/2018 11:20

shareholder.. your comment

I am pleased that the penny has now dropped that you don’t need salespeople to sell the gold which did take you all a bit of time to grasp.

That is somewhat patronising, especially when you do not know any of those on this board personally and are not crediting us with the possibility that we may have known this for many years.

Morkel is part of a sourcing team, he does not do it by himself. They have to bring in material, as the circuits will run dry if they do not - they are delivering on this, as there has been a continuous supply.

from the results..

"A large stockpile of raw material was purchased during the period to secure production through the CIL circuits. Metallurgical test work to optimise recoveries from this stockpile is ongoing. The gold content of our current raw material at the end of the period is estimated to exceed 1,000 kg (in excess of 32,000 oz) of gold for the first time since 2013, highlighting the focus and energy the sourcing team has put into finding the right materials for the operation."

ends...............

If morkel and the others do not supply feedstock, then their competency would be questioned and it is highly unlikely that they would remain in their roles. In south africa, the supply contracts have been in place for many years and are revisited and renewed at regular intervals by the team in SA.

Knowing rand refineries history, as I do, they have taken people to court before, over the use of the word "krugerrand" as they felt they own it (they lost), they have also been to court over other trivial matters, which they have pursued relentlessly. Based on this, rand refinery would have gone the distance, if they felt they had a good case. They are not known to cough up out of court.

This company has been doing much better of late than it has in years and that is what shareholders want. The primary focus is downside protection and operational stability. Upside comes after those considerations.

[sea7] 20/5/2018 08:54

shareholder - I neither work for, nor am I related to GKG.

I put forward my views based on the facts that I have from the company accounts and rns's.

I do prefer to see people put forward viewpoints that do not neccesarily agree with mine, as it goes some way to prevent confirmation bias occuring.

Many years ago, the biggest earner at one point was woodchips and the company had several years worth of supplies on site. In april 2013, they had 28k ozs of material on site, of this 28k ozs, around 15k ozs were contatined in 60k tonnes of woodchips.
sp angel note - april 2013 - 500kg of gold in 60k tonne of woodchip at 8 g/t.

With mining declining in SA and the amount of timber supports etc, that are available for processing reducing, they have switched focus to the CIL plant. I think they are being proactive in adapting to the environment they are working in.

They removed the single refiner risk, by getting plenty of contracts up and running with other suppliers, to prevent the situation happening again, which also removed rand refineries ability to dictate what it wanted to goldplat, as it had a hold over the company from a refining point of view.

rand were undergoing a 5 year upgrade to their plant, they "lost" so much gold, they had to borrow off all their shareholders, they have had court cases due to staff nicking gold and a lot of staff turnover. Gerard indicated to me in an email, that only one of the individuals that dealt with goldplat during the 2014 timeframe and the silver sulphide contract remains at the company - that being the CEO.

Whilst the shareprice is not really reflecting the work done, due to the fact that sentiment in the gold market is down, gold bullion purchases by players are down, dollar strength and interest rate rises are weighing on gold, the share price will do well, as soon as these headwinds subside - and they will.

[michaelfenton] 20/5/2018 04:46

The POG is an important factor. Given the recent political uncertainties in the world I would have expected a rise and not a slight fall even allowing for the relative strength of the US dollar.

[sea7] 19/5/2018 22:58

taking the longer view..

op profits...

2007 £769k
2008-£1.739m
2009-£1.824m
2010-£2.059m
2011-£3.054m
2012-£4.527m
2013-£2.639m
2014-£153k
2015-loss £711k - Gerard became CEO 15th Feb 2015
2016-£1.212m
2017-£2.910m
2018-H1 £1.58M - Annualised - £3.16m

These figures show the how the company has been through its turnaround and the results are starting to bear out.

The problems with Goldplat began when the boardroom bust up took place in mid 2012, then demetri stormed out and quit, about one month before the kenyan govt moved the goal posts and announced regulations that would bring kilimapesa ownership and development into question. This was followed by the 20% drop in the price of gold in early 2013, which showed up the flawed business model they were operating, which only worked when gold was increasing. This had the knock on effect of making contracts onerous to goldplat and feedstock on site that was already owned outright, loss making.

Just as they were making progress, the issues with Rand cropped up, this was when Ian was CEO, the impression was that the relationship froze when they began dealing with him. This culminated in the refusal of rand to accept goldplat dore in late 2014, which prompted the sudden change of roles and Gerard taking over as CEO, when he was originally going to be the new chairman, in place of Brian when he was due to step down.

The company has not been at this level of op profitability since june 2011 and the company structure is much stronger than it was back then.

Sure there are outstanding matters, aren't there always, however, they are not legacy issues, they are matters that are primarily out of the company's control, such as the new tailings pit in benoni.

The numbers are bearing out the successes since the dark days of a few years ago.