Goldplat Share Discussion Threads

[dangersimpson2] 27/9/2018 11:53

I agree wigwammer. It would have to be a fairly stand out deal to make it worth investing in a new producing asset rather than bite the bullet and fund Kili Stage 3 themselves so it can finally start to pay.

Given where the rating is on the rest of the company I would have thought they would have put this on the back-burner - but they keep bringing it up so maybe they know more than me. The question I would be asking though is what is their competitive advantage - if they can clearly articulate that and why a new producing asset capitalises on that whereas Kili stage 3 doesn't, that would be a good sign. If their thinking on this isn't clear then that would be a worry for me.

[michaelfenton] 27/9/2018 10:11

DD you are most welcome to express your views. I am on a learning curve (as are we all?)and happy to listen to any raional argument.

[wigwammer] 27/9/2018 10:01

Excellent post 5756. Many thanks, kimboy. I agree with your point on valuation - even a conservative estimate of recovery and profitability per oz from the stock dam covers the current market cap, and the announcement of a monetisation of this asset is likely to see a substantial rerating. My concern is - what will they do with the cash? The strategy of offloading the exploration at kili to fund another cheap and producing asset elsewhere appears a little muddled. At least they understand the issues at kili. Fingers crossed for a resolution to the dam issue anyway :)

[sea7] 27/9/2018 09:27

Hi DD,

yep I see that.

I am looking at this from the sustainability perspective, as opposed to levels of profitability, based on where we are in the story.

I do not disagree with you on the fact that there are still issues dragging on and dragging things down, however, get these challenges overcome and the picture behind these issues, is far better. I emailed Gerard, when he took over, to say that I felt he should dispose of kili and focus on the surface ops. He felt that there is a future for kili, so I gave him the benefit of the doubt - cannot go back on that now. There will be a conclusion to the kili issue one way or another - sale/jv/solo profitable running/ or use the plant for an east african recovery hub or close and walk away.

I like everyone else, wish to see higher returns overall and capital growth
and that is the direction we are heading, even if it doesn't seem that way today.

[michaelfenton] 27/9/2018 09:14

Can we try to be civil on here. It is true that Kimboy is always positive and sees the glass half or even more full. others who appear to be non holders are knockers. Personally I like to see both ends of the spectrum as it keeps a balance. Kili in my mind has been a total disaster and should have been disposed of years ago. Now they are looking for investors? I am hoping for a gamechanger to put me on the right side. But Gerard record so far has not been up to much - always promising and not delivering.

[kimboy2] 27/9/2018 08:33

I notic the big plant clean up in South America is due to be concluded in Q1/18, which must mean it is imminent.

I also notice that the third fluidised bed has been installed in Ghana which increases capcity by 33%. They are clearly expecting an increase in material in Ghana.

[sea7] 27/9/2018 08:26

One positive that did stand out to me, was that had they not spent £1.9m on raw materials, which they state will see them through the next 24 months, primarily in south africa, we can see that the cash position would have been £3.5m, which is considerably higher than last year.

Despite the losses, that fact should not be overlooked.

They wrote off £320k bad debt - one off item. Meaning admin costs higher than last year.

The net finance loss of £722k - does include £543k of interest and finance liabilities. The increase in interest on borrowings and finance liabilities was due to financing of the construction of the elution plant at GRG during the period and Plant 2 at Kilimapesa in the previous period, as well the Group cost in pre-financing sales to smelters and refiners.

Again the net finance loss, at that level will not be repeated going forward, as the elution plant is up and running, along with plant 2 at kili. The smaller part of the loss is stated as pre-financing sales to smelter and refiners - as the demand on cash has been reduced, these facilities will be used less as well.

Included in the foreign exchange loss from continued operations of £199,000 (FY 2017: £11,000) is £80,000 unrealised loss on translation of the proceeds from sale of shares in subsidiary.

They spent over £2m in capex and development in the period, purchased £1.9m of raw materials and still had £1.4m in cash left.

The last place that the issues of the past disappear from is the balance sheet and this was the set of accounts, I had been waiting for, which was to draw a line under all those issues.

Sadly, the Kili issue is still there. The sourcing in ghana is being worked upon and we can expect some news here.

The positive side to development of the story is there, however, it is, once again being overshadowed by the issues in kenya and losses in ghana.

[kimboy2] 27/9/2018 07:24

A passable impression of Private Frazer, but nonsense of course.

There are two levels with GDP. Firstly the current plans for the recovery operations and Kili and executing them, and secondly potentially game changing developments in the stock dam and mining venture.

Firstly South Africa is doing very well. It produced a post tax profit of £2.75m. GDP's 76% of this is worth £2m pa. IMV that alone is worth more than the £8m market cap of GDP.

The rest of GDP is valued negatively. Is that realistic?

Clearly the results didn't meet out expectations at the beginning of the year. A £892k loss at Kili when a small profit was expected is a bad result. This was due to stoppages due to elections, rain and a delays with spares along with running plant 1 and poor grades.

As for this year they have closed plant 1 and the cost of the spares won't recur. The rest is about getting the quantities and grades of material to feed the plant. We shall see if they can do that.

The plan for Kili is to spend perhaps £2m to expand production up to 10kozs and get economies of scale to reduce costs. They are hoping to do this with outside capital perhaps selling a 50% stake for £5m with £2m going into KIli.

Is a mine with a potential £1.5-2m profit and scope to explore to expand production and cash flow to finance it worth £10m. Possibly but we shall see if anyone comes forward.

On Ghana it is simply a question of getting the material in and ideally a stockpile. The target is eventually 20kozs pa. If they did this then Ghana would be producing a profit of £2-3m pa.

This is clearly a business that they are still building from a standing start a couple of years ago.

The bottom line is can they get everything pointing in the right direction this year. If they can get Kili to breakeven and enough feed into Ghana then they will do £2-3m, and ignoring FX, attributable this year.

Overshadowing all this is a second level with GDP which are potential game changers. Firstly the stock dam resolution is imminent and will probably be announced before Christmas.

IMV this will produce attributable post tax cash flow greater than the present market cap when the deal with probably DRDgold is announced

Secondly there is the potential of a mining venture. A 25 or 50kozs mine with a profit of perhaps $2-300/oz profit will completely change things. It will depend upon the details of any acquisition or agreement.

If they can get a deal like Matala then it will be transformational. We shall see.

[michaelfenton] 26/9/2018 16:02

The spin is wearing a bit thin?

[kimboy2] 26/9/2018 15:14

Our leader speaks;



Quite interesting as well.

[dangersimpson2] 26/9/2018 11:54

My initial reaction was slight disappointment at these results. Although the operating profit was broadly in line with my expectation the EPS being negative is not a good headline. I still think they should report an adjusted EPS figure that removes one-off exceptionals & inter-company FX.

Kilimepasa losing 900k really hit profits again. Getting investment here to build a sustainable platform for profitability must be a priority.

There is a lot of operational detail which is good but I was also hoping for more information on the TSF processing options. Until e have some numbers here this will be considered a zero value option by the market.

More when I've had chance to dig deeper into the numbers.

[1rodson] 26/9/2018 10:27

All jam tomorrow, then mybe I will buy some tomorrow, but hang on what's that old saying...........TOMORROW NEVER COMES!