Goldplat Share Discussion Threads

[kimboy2] 22/5/2018 14:06

One of the beauties of GDP is that labour is a relatively small cost - £5m out of £26m total cos.

Just didn't understand how the 'restructuring' of the same workforce will cost savings. Though at 5ktpm output will probably be greater than the other two plants separately so perhaps they meant this.

They didn't say anything about the grades problem mentioned a month ago, but seemed to have sorted it out sufficient to be confident enough about production to go with stage 3.

[sea7] 22/5/2018 13:32

All staff, as far as possible, will be offered positions in Plant 2, or at the mine, where possible.

This should avoid any lay offs as far as possible, regarding all those currently employed at plant 1.

It says to me that plant 2 is less labour intensive and they are trying to ensure that no member of staff is made redundant.

[russman] 22/5/2018 10:27

Cannot make head nor tail of Kili; no figures provided.
May make break-even one day.
Artisans seem to have more idea.

[kimboy2] 22/5/2018 09:29

The RNS unfortunately didn't give us any numbers to work from for Kili. They can be a hostage to fortune I suppose.

They will be removing some overheads by closing the initial plant and apparent cost savings on labour, though I didn't quite understand it. Presumably they are just using them more efficiently.

It looks to me as though they are opening themselves up for a greater range and quantity of artisanal material and not just the highest grade material. I would have thought that a couple of thousand ounces is only scratching the surface of artisanal gold in the area.

The increases CIL capacity, once they do stage 3, will also increase recoverability by giving them more time on the CIL.

The question is how profitable will all this be, Kili has certainly been a long and tortured tale. However if they can get the AISC around $1000/oz and output to 10kozs then it will be doing very nicely.

[kimboy2] 21/5/2018 21:20

Hopefully they will get the power line in so they don't need the diesel.

Intersting the comment about stage 3 as and when financing allows. I believe stage 3 will cost about £0.5m and will increase production by about 2.5koza.

IMV they have the finance available if they wish, but they seem to want to have Kenya self financing.

[sea7] 21/5/2018 19:09

There should be some decent savings after closing plant 1. Diesel alone must have been a fair cost.

[kimboy2] 21/5/2018 19:05

They seem to have increased production at Kili. The rate for stage 2 was meant to be 120tpd but they are now processing 5ktpm.

It seems they are also going to take in artisanal material so output could be significantly higher next year.

It looks as though Kili output is 1kozs for Q4/18.

Stage 3 will be done incrementally freeing each choke point as they want to increase production.

The target aisc was $1050/oz and Gerard said a limit of production would be around 15kozs pa.

Anyway the one negative from the recent update has been sorted and indeed enhanced pretty quickly.

[sea7] 21/5/2018 16:57

looks like the local mp in nyatike, migori, has had enough of the chinese miners...



They have that period to vacate the constituency in peace, otherwise I won’t be liable for any loss of property on their part,” Mr Odege said.

He said he will mobilise miners from the constituency to march to a Chinese mine headquarters and evict them.

“We will meet here and march to their headquarters to evict them. We know that the local security team has boycotted this meeting because they are offering them police (to protect them). They should know I will be on the front line,” Mr Odege said.

The MP said he had written several letters to the Ministry of Mining on the issue and that he had been assured that no mining licence had been issued in Migori County.

The constituency is rich in gold, copper, tin and sapphire which are mined at government-owned land at Matanda and Osiri where tension has been high after Chinese miners invaded the areas.

“I have already drafted a letter calling for an end to the illegal Chinese activities in Nyatike,” the MP said.

[sea7] 21/5/2018 14:56

This is about two months ahead of schedule. The ops update in july 2017, stated about a years worth of tailings capacity remained at plant 1.

[kimboy2] 21/5/2018 14:54

The good news is that they have sorted the problems out reported last month. Indeed enough to push the button on phase 3.

[michaelfenton] 21/5/2018 14:52

True plant 2 fully operational but will not raise the next set of figures? Good news even if we will have to wait awhile to see the upgrade effecting the bottom line.

[sea7] 21/5/2018 14:41

rns out - kili plant 1 closed - plant 2 fully operational at 5k tonnes a month

[shareholder7] 21/5/2018 14:04

Anyway Gerard is presenting tonight so watch he for a big jump in the share price tomorrow (:-

[kimboy2] 21/5/2018 13:45

Just because I disagree with you doesn't necessarily mean I am a paid ramper.

The point I was making was that most material was purchased rather than being on the sort of contract highlighted. Some of the material was purchased some considerable time before it was processed at a much higher price of gold.

Manolis bought a considerable amount in during 2013/14 period, which is where the contract issue arose. The loss on the inventory would have been much greater than the contractual issue and lasted much longer.

The contracts were profit maximising as gold will rise in the long term. However in a falling gold environment the contracts will compound losses on the inventory which may put unbearable strain on the company.

Changing the contracts removed this risk

[shareholder7] 21/5/2018 13:33

Agree with you DD, this post shows that he has no idea and no shares in the company Must be part of GDP and agree with you he has no value to this conversation

[kimboy2] 21/5/2018 12:14

Well I think we have established that we a load of salesman would make little impact on the profit given the relatively small sums spent on material.

On contracts the historic problem I think was not particularly significant. Of more significance I suspect was the effect of the gold price on the relatively large inventory of material that they had at the time.

As for RR that was a bad debt. If you wish to characterise that as a contractual problem then fine, but that is an assumption.

As for contracts today it would seem reasonable to expect 100% of material to be acquired on contract, what else could it be. But they are on a multitude of different contracts and quite why you assume no one is competent to deal with them I am not sure.

Most contracts will just be for the purchase of material.

[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.