Source - LSE Regulatory
RNS Number : 0486X
Goldplat plc
18 December 2023
 

Goldplat plc / Ticker: GDP / Index: AIM / Sector: Mining & Exploration

18 December 2023

Goldplat plc

('Goldplat', the 'Group' or 'the Company')

Audited Results for the year ended 30 June 2023

Goldplat plc, (AIM:GDP) the AIM listed Mining Services Group, with international gold recovery operations located in South Africa and Ghana, servicing the African and South American Mining Industry, is pleased to announce its audited results for the year ended 30 June 2023.

The Company's annual report and accounts are available on the Company's website at http://www.goldplat.com/downloads  and hard copies will be posted by 19 December 2023 to shareholders that have elected to receive printed copies.

As announced on 4 December 2023, Resolution 1 to be put to shareholders at the Annual General Meeting of the Company being held on 29 December 2023, to receive the report of the Directors of the Company and the audited financial statements of the Company for the year ended 30 June 2023, will be adjourned in order to give shareholders the requisite notice. The date of the adjourned meeting will be confirmed in due course.

For further information visit www.goldplat.com, follow on Twitter @GoldPlatGDP or contact:

Werner Klingenberg

 

Goldplat Plc

(CEO)

Tel: +27 (0) 82 051 1071

Colin Aaronson / Samantha Harrison / Enzo Aliaj

Grant Thornton UK LLP

(Nominated Adviser)

Tel: +44 (0) 20 7383 5100

James Bavister / Andrew de Andrade

WH Ireland Limited

(Broker)

Tel: +44 (0) 207 220 1666

Tim Thompson / Mark Edwards / Fergus Mellon

Flagstaff Strategic and Investor Communications

Tel: +44 (0) 207 129 1474

goldplat@flagstaffcomms.com

 

 


 

 

Chairman's Statement

Goldplat PLC's precious metals processing facilities continued to show resilience by achieving creditable trading results during the 30 June 2023 year, during which it experienced some unique challenges.

Our portfolio of core assets consists of two gold recovery operations, in South Africa and Ghana, with plans to extend operations to Brazil. These operations recover gold and platinum group metals ('PGM') from by-products of current and historical mining processing, thereby providing mines with an environmentally friendly and cost-efficient way of removing waste material.

Looking at the trading results of Goldplat PLC ("the Company" or "Goldplat") and its subsidiaries, together referred to as "the Group", profit for the year remained strong at GBP3,068,000 (2022 - GBP3,963,000), resulting in a return on invested capital (Profit after Taxation divided by Total Equity) of 17.8% (2022 - 22.3%). Cash generation across the Group continued to be robust with net cash flows from operating activities of GBP3,343,000 (2022 - GBP2,997,000) and net year end cash of GBP2,781,000 (2022 - GBP3,895,000).

During the year the Group's operations have been impacted by:

·    Increased electricity supply cuts in South Africa;

·    Slow turnaround of debtors due to delays from a smelter in Europe; and

·   Delays in export of material out of Ghana during the last quarter due to finalisation of the renewal of our Gold License.

The above matters have been mitigated after the financial year end through utilising other smelters and the approval of the Gold License in Ghana. In addition, we are in the process of installing back-up diesel generation power in South Africa.

We remain focussed on long term visibility of earnings in the recovery businesses by increasing visibility of resources through the strengthening of partnership relationships and improved processing methods, whilst positioning ourselves as a service group focussed on key elements of primary producers' Environmental, Social and Governance (ESG) initiatives. Our key focus will remain on extracting value from gold bearing by-products whilst we investigate broadening the commodity spaces in which we operate and add value.

As indicated in the prior year, the Company will continue to return cash in excess of operating and development requirements to shareholders. Due to the challenges experienced during the year, resulting in significant working capital requirements, the capital invested into a new tailings storage facility ("TSF") in South Africa and future capital requirements to maintain operations as well as processing of the old TSF, the Company did not distribute any cash to shareholders during the year. We will continue to evaluate this position and, when appropriate, will distribute cash through either share repurchases or dividends, whichever the Board believes will add the most value, to the shareholders.

Goldplat has a pivotal role to play in the circular economy that extends to the extraction of minerals to re-processing of what would typically be dumped as waste materials. It also extends to responsible mining and business practices that underpin Goldplat as a sustainable partner for large mining groups.

As referred to in the Strategic Report, the business has adopted certain sustainability reporting principles in the current year including profiling material matters through the application of double materiality and linking these material issues to strategic responses and performance metrics.

As a starting point, we have conducted materiality assessments to identify where our highest level of sustainability impact could be and in turn, linking these matters to our strategic response, policies and performance management. We are committed to creating measurable value for all our stakeholders towards a just and socio-economic sustainable future.

Goldplat will continue developing its integrated sustainability strategy and reporting practices. This process is ongoing, and the Board will continue to monitor our obligations and make sure that we meet or exceed expectations as we continue to create and preserve value for all our stakeholders.

During the year the Group strengthened its executive management team with the appointment of a Chief Operating Officer (COO), Douglas Davidson, and Chief Financial Officer (CFO), Brent Doster. The executive management team is well positioned to execute the Company's strategy.

The Israel-Hamas and Russian-Ukraine conflict will continue to pose challenges to global supply chains and whilst Goldplat has no activities directly connected with Russia, Ukraine or the Middle East, the long-term effect of the conflict on the Group remains uncertain.

We look forward to continuing and building on the successes of the past few years and increasingly realising and growing the intrinsic value of Goldplat. I wish to thank all Goldplat's employees, as well as my fellow directors, our advisors and our shareholders for their efforts as we look forward to the coming years with enthusiasm.

Gerard Kemp

Chairman

15 December 2023

 

CEO Report

Overview of operations

Goldplat is a mining services company, specialising in the recovery of gold and other precious metals, from by-products, contaminated soil and other precious metal material from mining and other industries. Goldplat has a pivotal role to play in the circular economy that extends the extraction of minerals to re‑processing of what would typically be dumped as waste materials. Goldplat has two market leading operations in South Africa and Ghana focused on providing an economic method for mines to dispose of waste materials while at the same time adhering to their environmental obligations.

Goldplat has been providing these services for more than 20 years mainly to the mining industry in Africa, but more recently also in South America. Goldplat's extraction processes and multiple process lines enable it to keep materials separate, which provides a high degree of flexibility when proposing a solution for a particular type of material. The processes which are employed include roasting in a rotary kiln, crushing, milling, thickening, flotation, gravity concentration, leaching, CIL, elution and smelting of bullion. Goldplat recovery operations recover between 1,500 ounces to 2,500 ounces monthly through its various circuits and under different contracts. The grade, recovery, margins and terms of contracts can differ significantly based on the nature of the material supplied and processed. At a minimum, 50% of material produced is exposed to the fluctuation in the gold price, with the remainder of the production being offset by corresponding changes in raw material costs.

The strategy of the Company, which also drives the key performance indicators of management, is to return value to the shareholders by creating sustainable cash flow and profitability through:

·    growing its customer base in Southern Africa, West Africa, South America and further afield;

·    strengthening its license to operate in the jurisdictions in which it operates;

·    forming strategic partnerships with other industry participants;

·   leveraging its role in the circular economy to diversifying into processing of platinum group metals ("PGM"), coal and other commodities contaminated material;

·    ensuring the sustainability of its operations from an environmental, social and governance perspective; and

·    optimising the value to be extracted from the processing of its 2.2-million-ton, TSF.

Goldplat's highly experienced and successful management team has a proven track record in creating value from contaminated gold and other precious metals-bearing material.

The Group follows the responsible gold guidelines as set-out by the London Bullion Mark Association ("LBMA") and our processes are audited on a bi-annual basis, to provide further comfort to its suppliers, partners and customers.

Goldplat has a JORC defined resource (see the announcement dated 29 January 2016 for further information) over part of its active TSF at its operation in South Africa of 1.43 million tons at 1.78g/t for 81,959 ounces of gold.

Since the resource estimate was completed, more than 1,000,000 tons of material have been deposited on the TSF.

Operating results

The recovery operations continued to deliver strong results with profit after tax attributable to owners of the Company of GBP2,798,000 (2022 - GBP3,555,000), a decrease of 21.3% from the previous financial year.

The decrease was driven by increased electricity supply cuts in South Africa, delays at the smelters in Europe and being unable to export material from Ghana due to the delays in the finalisation of Ghana's gold export license.

Before the 2020 financial year, the cashflow generated was invested in sustaining and growing our mining portfolio in Africa, which we exited during the 2021 financial year. Since then, the Group has been focussed on the recovery operations to increase visibility of earnings through:

·    Growing its customer base and its raw material supply on site;

·    Securing its license to operate through maintain licenses and contained conditions; and

·    Securing and extending our role in the circular economy by expanding our business into other commodities.

Growing the customer base

During the year the Group retained all major woodchips and byproduct suppliers and secured additional supplies of material in Ghana and South America. A major supplier is defined as a supplier that supplied a material amount of raw material to the operations during the last financial year.

During previous years we removed low-grade surfaces sources from various sites owned by different entities, whilst during the year we secured a contract with DRDGOLD Limited ("DRDGOLD"), which provides us access to certain low-grade soils. As a result, we have removed material from fewer suppliers, although the quantity available from DRDGOLD has meant that our security of supply for our milling and carbon-in-leach circuits increased to more than 5 years.

The nature of these materials to be removed from DRDGOLD will vary in terms of the gold grade contained and the recoverability of the gold contained through our circuits. The analysis and processing of these materials to date has indicated that it will be viable to remove and process at current cost and price parameters.

Securing pipeline and developing alternative reclamation resources

Units

2023

2022

Product type


South Africa

Ghana

South Africa

Ghana

Low-grade surface sources

Number

1

0

5

0

Woodchips

Number

6

0

6

0

By-products

Number

5

12

5

6

The percentage contribution on different feed products to operating margins in South Africa does fluctuate from month to month but on average each product type contributes a third of the margins for Goldplat Recovery SA ("GPL"), highlighting each product's significance to the operations. In Ghana, Gold Recovery Ghana ("GRG") margin is derived only from the different types of by-products generated by current mining activities.

Although GPL has retained all contracts during the year the consolidation continues in the South African gold industry; mines are closing or are becoming more efficient in their processing, resulting in reduced volumes and grade of woodchips and by-products received.

As a result, GPL focus is to increase its share of the market in South Africa, securing business of a major mining group in South Africa it is not servicing currently and looking to neighbouring countries to supplement current feedstock.

The focus of GRG in Ghana remains on opening the West African market, specifically securing more feedstock out of Ivory Coast, Mali and other countries. After year-end GRG received its first supply from a mining group in Ivory Coast which provides additional confidence on future supply out of this jurisdiction.

The Group continues to investigate and research different types of discard and waste sources from industry to increase the flexibility in the types of material it processes.

License to operate

Due to the nature of the recovery services the Group provides and the commodities we recover, we require various licenses to operate and need to comply with the conditions of these licenses.

During the year the group continued to invest cost and capital to maintain these licenses and to ensure our operations comply with these licenses.

During the year GRG renewed the Minerals Commission - License to Purchase and Deal in Gold and the Environmental Protection Authority License. The delay in the renewal of the License to Purchase and Deal in Gold in Ghana had a significant impact on GRG's ability to export material and as a result secure material from suppliers.

The Department of Water and Sanitation of the Republic of South Africa has authorised the water use licence of GPL during June 2022 which includes the extraction and use of water in its recovery processes and the impact of its disposal of tailings on a new TSF, according to the conditions set out in the licence, which is valid for 12 years. This has enabled GPL to construct a new TSF that will provide an additional seven years of deposition capacity.

Below is a summary of some of the major licenses required by operations to operate in current jurisdictions:

License to operate

Valid until

2023

2022



South Africa

Ghana

South Africa

Ghana

Current licenses

November 2040*

Precious Metals


Precious Metals




Refining License


Refining License



January 2024

Air Emissions License


Air Emissions License



Expired*

Mining Right (expired May 2023)


Mining Right
(expired May 2023)



Annual

Radio-active License


Radio-active License



2034

Water Use License


Water Use License



Annual

Precious Metals


Precious Metals




Import Permit


Import Permit



Annual

Precious Metals


Precious Metals




Export Permit


Export Permit



Annual


Ghana Freezone Authority


Ghana Freezone Authority


May 2026


Minerals Commission - License to Purchase

and Deal in Gold


Minerals Commission - License to Purchase

and Deal in Gold


18 December
2025


Environmental Protection Authority License


Environmental Protection Authority License


New application

Waste License




*     GPL does not require a mining right in South Africa to continue its operation and is conducting its operations under a Precious Metals Refining License which only expires in November 2040. As GPL does not have an identified mineral deposit and does not extract any ore from a mineral deposit, it could not renew its mining right per the Department of Mineral Resources and Energy ('DMRE'). We have applied to the relevant Government authorities to convert the existing environmental management plan in place to an integrated environmental authorization and waste management licence. We await their response.

Circular economy

Goldplat has a pivotal role to play in the circular economy that extends to the extraction of minerals to re-processing of what would typically be dumped as waste materials. It also extends to responsible mining and business practices that underpin Goldplat as a sustainability partner for large mining groups.

During the year all of our operating profit was derived from the processing of discards or waste materials from historic or current mining activities.

Goldplat believes that it can extend this pivotal role it is playing in the circular economy to the gold industry in South America and into other commodities including the platinum and coal mining industry in South Africa.

As a result, we made a strategic investment of GBP150,000 to obtain the usage of a small spiral plant for our gold operations in South Africa and acquired a 15% shareholding in a fine coal recovery technology company. Goldplat has an option to invest an additional GBP1.5m, which will increase our shareholding in that business to above 50%. This investment would be used to operationalize the technology through the construction of a fine coal washing plant in Mpumalanga, South Africa.

Management is still evaluating this option which would provide us diversification in our recovery operations into a different commodity, namely coal, of which significant resources are available in South Africa, with opportunities not just for processing but also for environmental rehabilitation.

During the year we invested capital to increase our ability to process precious metal group minerals and engaged with potential partners that can assist in increasing supply of material out of the PGM industry.

In addition, the Group has decided to acquire land in South America, specifically Brazil, a process which has not been completed to date, at a value of circa GBP103,000. The decision was driven by the need to establish an address in South America from which we can service our clients. In time we plan to increase operational plant capacity in Brazil to provide solutions for lower grade material not processable at our other plants due to the cost of transport to those facilities.

Tailings Facility

With the approval of the water use license, GPL constructed a new TSF, which is adjacent to the current TSF, which was completed in August 2023 and is currently being commissioned over a period of 9 months. The new TSF has sufficient capacity to store the tailings we will produce in our current operations for the next seven years.

The new TSF has been constructed by using regulated synthetic liner and design drainage which should enable more process water to be re-used in the plant and reduce seepage and contamination of ground water.

The new TSF allows us to divert all deposition from the current facility, which will provide us with the ability to use the current facility to recover the JORC resource through DRDGOLD. The processing of our old TSF remains dependent on the approval of the water use license over certain areas for the installation of a pipeline to the DRDGOLD process facility. The application process is ongoing with engineering designs being finalised with final application to be done before end of December 2023. Approval is estimated to be received within Q4 of the 2024 financial year.

DRDGOLD and Goldplat Plc are currently in the process of evaluating different variables that will impact on the processing of the TSF, as well as the commercials of doing so; this process will be completed alongside the water use license. To enable us to process the current TSF through a DRDGOLD facility, we will require approval to install a pipeline to this DRDGOLD processing facility (as indicated in paragraph above) and will need to finalise commercial agreements with DRDGOLD.

Electricity Supply

During the year, the South African operation lost circa 13% of its production hours due to electricity supply outages, which has a significant impact on our lower grade circuits. The lower grade circuits operate continuously, and any hours lost result in a loss of production.

Due to the increased uncertainty of electricity supply in the medium term, we have decided to invest in diesel generators which will be able to sustain operations in South Africa during electricity cuts. The capital cost of these investments will be GBP750,000 and will be financed over 36 months with one of our local banks. Based on 25% of available hours expected to be lost during the next 24 months, we expect that the capital cost of the generators will be recovered within 24 months. During this year, we will also continue to investigate other options to secure electricity supply, for example additional connections to the local Municipality Grid or a new direct connection to Eskom (South Africa Electricity Generator and Supplier); however, the timelines of these options remain uncertain and unclear.

The diesel generators are expected to be operational by the end of January 2024.

Anumso Gold Project - Ghana ('AG')

The gold mining license under the Anumso Gold ('AG') project expired during March 2021 and was not renewed as was the intention of the Company and the joint venture partner, Desert Gold Ventures Inc. The investment in AG was disclosed as a discontinued operation during the 2021 year. In that year we were informed that mineral right fees since 2013 were outstanding, which is still being disputed. None of the joint venture partners intend to capitalise the AG project to settle the claim and current AG liabilities exceed its assets by the minerals right fees outstanding. The Company's share of outstanding minerals right fees is GBP369,000 and this has been accrued in prior years.

Outlook

Our focus during the year has been, and will continue to be:

·    to open up and expand our market share in West Africa and further into the rest of Africa;

·   to acquire land in Brazil, and expand our service delivery, specifically on lower grade material in Brazil and elsewhere in South America;

·    increase our market share in South Africa and increase client base in neighbouring countries;

·    to reduce the of cost of production, specifically on our CIL circuits in South Africa;

·  to agree commercial terms on the reprocessing of the TSF with DRDGOLD and finalise the regulatory requirements to allow us to pump material through a pipeline to the DRDGOLD facility;

·    leveraging our strength and capabilities through the processing of other precious metals and commodities.

The recovery operations have nearly always been cashflow generative and during the year we have utilised some of this cashflow to build the new TSF in South Africa, support working capital levels as a result of delays in renewal of our Gold licence in Ghana and delays experienced on payment from a smelter in Europe. The Company will remain focused on sharing future cashflows with shareholders, specifically distributing cash surplus (above Group's operational requirements and growth plans) to shareholders.

The South African operations will continue to serve the South African gold industry and will focus on sustaining profitability from old mining clean-ups and as part of its diversification strategy will continue investing capital into processing PGM's.

We are working with DRDGOLD to find the most economic methods to reprocess TSF (which has a JORC Compliant Resource of 81,959 ounces) and receiving environmental approval for a pipeline which will be required to transport material to a facility for processing.

Goldplat recognises the cyclical nature of the recovery operations as well as the risks inherent in relying on short-term contracts for the supply of materials for processing, particularly in South Africa where the gold industry is in slow longer term decline. These risks can be mitigated by improving our operational capacities and efficiencies to enable us to treat a wider range of lower grade materials and leveraging on our strategic partnerships in industry to increase security of supply. We will continue to seek materials in wider geographic areas. We shall also keep looking beyond our current recovery operations for further opportunities to apply our skillsets and resources.

Conclusion

The last few years involved a lot of changes in Goldplat's business as we have set out to increase sustainability and growth of our recovery operations. I would like to compliment Goldplat's employees, its advisors, my fellow directors and the Company's shareholders not just for their efforts and support, but for how they have embraced the changes and remained focused on the opportunities they bring. This year we have seen the benefit of these changes and the Board is looking forward to building on this year's successes, creating opportunities from the ever changing environment and returning value to shareholders.

Werner Klingenberg

Chief Executive Officer

15 December 2023

CFO Report

Overview

Goldplat delivered another year of good results despite delays at the smelters in Europe, delays in finalising our gold export license in Ghana, increased electricity supply cuts in South Africa and inflationary pressures.

Goldplat achieved a profit after tax of GBP3,068,000 (2022 - GBP3,963,000), a decrease of 22.6% from the previous year.

Revenue decreased by 3% to GBP41,881,000, whilst the average gold price during the year remained constant at USD1,829/oz (2022 - USD1,833/oz).

The margins of the Group depend upon the volume, quality and type of material received, the metals contained in such material, processing methods required to recover the metals, the final recovery of metals from such material, the contract terms, metals prices and foreign currency movements. During the year, the gross profit margin decreased from 23.1% to 17.7%, which was driven by high volume of high-grade low-margin batches processed in Ghana and impact of electricity supply cuts in South Africa, where less gold was produced for the same fixed costs expensed. This was exacerbated by foreign exchange losses, which increased by GBP685,000.

The table below on the operating performance of the two recovery operations combined (excluding other Group and head office cost, foreign exchange gains & losses, finance cost and taxes) reflects the ability of the recovery operations in South Africa and Ghana to produce profitably at various gold prices and production levels for the last 5 years.


2023

2022

2021

2020

2019

Average Gold Price per oz in
US$ for the year

1,829

1,833

1,846

1,560

1,263

 


GBP'000

GBP'000

GBP'000

GBP'000

GBP'000

Revenue

41,881

43,222

35,400

24,809

21,769

Gross Profit

7,422

9,994

6,199

7,312

3,114

Other (Loss)/Income

(96)

53

56

0

0

Administrative Costs

3,021

2,332

1,694

1,977

861

Operating Profit Before Finance Costs

4,305

7,715

4,561

5,335

2,253

Financial review

The major functional currencies for the Group subsidiaries are the South African Rand (ZAR) and the Ghana Cedi (GHS) whilst the presentation currency of the group is Pounds Sterling (GBP). The average exchange rates for the year are used to convert the Statement of Profit or Loss and Other Comprehensive Income for each subsidiary to Sterling.

As set out in the table below, the average ZAR and GHS weakened against the Pound Sterling by 5.8% and 55.0% respectively. The exchange rates as at the end of the year are used to convert the balance in the statement of Financial Position. As set out in the table below, the ZAR and GHS closing rate depreciated by 20.6% and 49.3% respectively, which resulted in the GBP3,231,000 loss on exchange differences on translation during the year.



2023

2022

Variance



GBP

GBP

%

South African Rand (ZAR)

Average

21.43

20.26

5.8%

Ghanaian Cedi (GHS)

Average

13.7

8.84

55.0%

South African Rand (ZAR)

Closing 30 June 2023

23.87

19.80

20.6%

Ghanaian Cedi (GHS)

Closing 30 June 2023

14.60

9.78

49.3%

Apart from the gold price, the Group's performance is impacted by the fluctuation of its functional currencies against the USD in which a majority of our sales are recognised. The average exchange rates for the year used in the conversion of operating currencies against the USD during the year under review are set out in the table below:



2023

2022

Variance



USD

USD

%

South African Rand (ZAR)

Average

17.78

15.23

16.7%

Ghanaian Cedi (GHS)

Average

11.37

6.66

70.7%

Personnel

Personnel expenses increased by 11.6% to GBP5,214,000 (2022 - GBP4,674,000) during the year as a result of an increase in production personnel from 394 to 415. The increase in personnel has been driven by an increase in production units and the construction of the tailings facility in South Africa. We spent a total of GBP89,000 on various training programmes for our personnel.

Net finance loss

The net finance loss for the year can be broken down into the following:


2023

2022

Interest component

GBP

GBP

Interest receivable

69,000

0

Interest payable

(283,000)

(207,000)

Interest on pre-financing of sales

(956,000)

(449,000)

Intercompany foreign exchange income/loss

510,000

(157,000)

Operating foreign exchange losses

(221,000)

(1,071,000)

Net Finance Costs

(881,000)

(1,884,000)

Net finance costs decreased to GBP881,000 (2022 - GBP1,884,000) during the year as a result of:

·   Decrease in foreign exchange losses in operations of from GBP1,071,000 to GBP221,000. During the prior year we had a large foreign exchange loss in Ghana due to the depreciation of the GHS against the USD during that year. As we pre-finance a portion of our sales to the smelters, the exchange rate on the day we receive most of our funds was lower than the exchange rate on the day we recognise the sale in our records.

·  The Group has a USD loan outstanding to South Africa, at year end the value was GBP1,183,000 (2022 - GBP2,395,000). Due to the ZAR weakening against the USD and the USD strengthening against the GBP, an unrealized profit was created in the Group, which was the major contributor to the intercompany foreign exchange income of GBP510,000.

As a result of delay in finalization of batches at a smelter in Europe, the balance prefinanced increased and the year it remained outstanding increased, resulting in an increase in interest on pre-financing of sales to GBP956,000 (2022 - GBP449,000).

The interest payable on borrowings relates to buy-back of the minority share in GPL during the previous year and increased as a result of the increase in the prime overdraft rate in South Africa during the current year.

Taxation

During the year the income tax expense decreased by more than 80%. This has resulted in a decrease in the effective tax rate from 24.7% to 8.3%, which was driven by the following:

·   Decrease in taxation rate of 15.59% for GPL, to 9.84%, due to a change in the mining tax rate formula and a decrease in profits resulting in a lower taxation rate based on mining tax formula applied in South Africa;

·    Decrease in GPL profits before taxation from GBP4,648,000 to GBP2,781,000.

GRG is registered as a Free Zone company in Ghana and was taxed at 15% (2022: 15%) during the current year.

During the year, the dividend from GPL to the Company incurred a withholding dividend taxation charge of 5%. The withholding dividend tax for the year was GBP69,000 (2022 - GBP71,000).

Other comprehensive income

During the year the Group experienced a loss in foreign exchange translation reserve of GBP3,231,000 and was primarily made up of:

·   Foreign exchange translation loss in GRG of GBP1,259,000 as a result of devaluation of the GHS during the year against the GBP by 49.3%; and

·   Foreign exchange translation loss in GPL of GBP2,169,000 as a result of devaluation of the ZAR during the year against the GBP by 20.6%.

Property, plant & equipment

During the year we spent GBP1,911,000 on the acquisition and construction of plant and equipment, mainly at GPL in South Africa.

We incurred GBP1,480,000 in GPL, with the main contributors to the capital expenditure in the current year being capital incurred on the new TSF project of GBP969,000 and the refurbishment of our oldest CIL circuit of GBP302,000.

We incurred GBP430,000 in GRG, of which GBP263,000 related to the new milling, gravity and flotation circuit increase recoveries from material received. This plant will start operating by Q3 of 2024 financial year. A further GBP123,000 on yellow equipment and GBP44,000 was incurred on the extension and improvements to our laboratory.

Intangible Assets

The intangible assets relate to the goodwill on the investment held in GMR and GPL. The balance has been assessed for impairment by establishing the recoverable amount through a value-in-use calculation, the detail of which has been disclosed in note 5 of the financial statements.

Right-of-use asset

The right-of-use assets decreased during the year by GBP224,000. The primary reason for the decrease is due to assets with a value of GBP230,000 that were transferred to property, plant and equipment, as they are now owned by GPL.

The Group acquired plant and machinery and vehicles on finance leases for GBP146,000.

The remainder of the changes relate to amortisation for the year and foreign exchange movements as indicated in note 19 of the financial statements.

Investment in Caracal Gold

During the year the Company sold all its shares in Caracal for a total consideration of GBP681,000.

Receivable on Kilimapesa sale

GMR is entitled to receive a further 1% net smelter royalty on all production from Kilimapesa up to a maximum of $1,500,000, on any future production from Kilimapesa. As at the end of the year, based on production at Kilimapesa, GBP601,000 is receivable.

Loan receivable

As part of the repurchase of the minority's share, shares were also issued to a new minority in South Africa, in the 2022 year, Aurelian, a portion of which is payable from dividend proceeds. The balance outstanding is GBP164,000.

Inventories

The increase of GBP8,086,000 in the inventory balance, relates mainly to an increase of GBP7,991,000 in inventory at GRG.


2023

2022


GBP

GBP

Precious Metals on Hand and in Process

16,618,000

8,186,000

Raw Materials

2,462,000

2,730,000

Consumable Stores

1,054,000

1,132,000


20,134,000

12,048,000

The increase in GRG inventory relates mainly to an increase in precious metals on hand and in process of GBP7,938,000 driven by the inability to export material due to delays in the renewal of the gold export license.

The raw material stock is only held in South Africa, and relates to the low-grade material processed through our Carbon-In-Leach ('CIL') circuits. During the year we've processed some of the high grade, higher cost material, but stock levels remained the same. With the agreement reached with DRDGOLD, by which we can remove and process materials on DRDGOLD premises, we have not just increased the availability of raw material for processing, but also put GPL in a position to operate with lower levels of raw materials at our premises.

Trade and other receivables

The Group's trade and other receivables fluctuates based on grade and volume of batches and material processed during different periods of the year in the two operating entities.

Apart from the gold bullion produced in South Africa, on which payment is received within 14 days, for the remainder of the concentrates we produce, the payment terms on average are between 4 to 6 months.

During the year, the trade and other receivables increased by GBP19,303,000, of which GBP11,328,000 relates to an increase in GRG and GBP7,710,000 to an increase in GPL.

The increase in GRG was mainly due to the delay in outturn of batches delivered to a smelter in Europe. In GPL, the reason for the increase was similar although larger volumes of material delivered to the smelters closer to the end of the financial year also contributed to the year-on-year increase.

Provisions

In terms of section 54 of the regulations of the Minerals Resource and Petroleum Act of 2002, in South Africa, a Quantum of Financial Provisioning is required for activities performed under mining lease. The Quantum was reassessed during the current year and increased by GBP78,000.

Deferred tax liabilities

The deferred tax liabilities decreased during the year from GBP1,013,000 to GBP531,000. The decrease is a result of a reduction in the taxation rate used during the current year in South Africa decreasing from 25.43% to 9.84%. The reduction in tax rate is because the South African subsidiary is taxed on a mining formula tax, which is driven by profitability margins and capital spend. Due to reduction in profitability and increase in capital invested, the tax rate reduced.

Interest bearing borrowings

In the prior year, GPL entered into a ZAR denominated bank facility of ZAR 60 million (approximately GBP3.02 million) with Nedbank, to finance the repurchase of shares from minorities in South Africa. The full ZAR 60 million was drawn during the first half of the prior year and the principal on the bank facility is repayable monthly over 36 months. The interest payable on the facility is the South African Prime Rate plus 1.75%.

GPL provided security over its debtors as well as a negative pledge over its moveable and any immovable property, with a general notarial bond registered over all movable assets. The Group entered into a limited suretyship for ZAR 60 million, in favour of Nedbank.

The balance outstanding on the reporting date was GBP1,183,000 of which GBP898,000 is repayable in the next 12 months.

Refer to note 18 of the financial statements for further disclosure.

Trade and other payables

The increase in trade and other payables of GBP28,225,000, was mainly driven by delays at a smelter in Europe and also the delay of export material in Ghana, due to delay in the renewal of our gold export licence.

In general, we pay our suppliers before we recover the value from material processed and delivered to smelters or refiners. Suppliers are either paid in full or a percentage of the balance is paid until we receive our final results from refiners or smelters. We receive external funding for material delivered to smelters to finance this gap between receipts and payments. During the year the balance funded increased as a result of delays at smelter in Europe to GBP19,054,099 (2022 - GBP7,421,000).

The delay in exports resulted in increases in stock holding and as result contributed to an increase in raw material accruals payable to suppliers to GBP17,799,000 (GBP4,638,000).

Conclusion

Looking forward, we expect inventory, trade and other payables and trade and other receivables to reduce as we start exporting in the first quarter of the new financial year in Ghana and realizing profits on these sales. We remain focused on generating cash to fund our capital spend on compliance projects as well as the generators and creating value for our shareholders.

Brent Doster

Chief Financial Officer

15 December 2023



 

Statements of Financial Position - Group



Group

Group

Figures in £'000


2023

2022

Assets




Non-current assets




Property, plant and equipment


5,265

4,763

Right-of-use assets


352

576

Intangible assets


4,664

4,664

Investment in subsidiary or associate


1

1

Unlisted investments


63

-

Receivable on Kilimapesa sale


571

556

Other loans and receivables


145

189

Total non-current assets


11,061

10,749

Current assets




Inventories


20,134

12,048

Trade and other receivables


29,205

9,902

Current tax assets


58

100

Receivable on Kilimapesa sale


30

142

Investment in Caracal Gold


-

727

Other loans and receivables


19

8

Cash and cash equivalents


2,977

3,895

Total current assets


52,423

26,822

Total assets


63,484

37,571

Equity and liabilities




Equity




Share capital


1,678

1,678

Share premium


11,562

11,562

Capital Redemption Reserve


53

53

Retained income


12,328

9,530

Foreign exchange reserve


(9,401)

(6,170)

Total equity attributable to owners of the parent


16,220

16,653

Non-controlling interests


1,033

1,150

Total equity


17,253

17,803

Liabilities




Non-current liabilities




Provisions


743

811

Deferred tax liabilities


531

1,013

Interest bearing borrowings


285

1,417

Lease liabilities


37

111

Loan from group company


-

-

Total non-current liabilities


1,596

3,352

Current liabilities


 

 

Provisions


207

208

Trade and other payables


43,196

14,971

Interest bearing borrowings


898

978

Lease liabilities


139

259

Bank overdraft


195

-

Total current liabilities


44,635

16,416

Total liabilities


46,231

19,768

Total equity and liabilities


63,484

37,571

 

 

 

Statements of Profit or Loss and Other Comprehensive Income - Group



Group

Group

Figures in £'000


2023

2022

Revenue


41,881

43,222

Cost of sales


(34,459)

(33,228)

Gross profit


7,422

9,994

Other income / (loss)


(96)

53

Administrative expenses


(3,021)

(2,332)

Profit from operating activities


4,305

7,715

Finance costs


(881)

(1,884)

Profit before tax


3,424

5,831

Income tax expense


(356)

(1,868)

Profit for the year


3,068

3,963

Profit for the year attributable to:




Owners of Parent


2,798

3,555

Non-controlling interest


270

408



3,068

3,963

Other comprehensive loss net of tax




Exchange differences on translation relating to the parent




Losses on exchange differences on translation


(3,231)

(522)

Total Exchange differences on translation


(3,231)

(522)

Exchange differences relating to the non-controlling interest




Losses on exchange differences on translation


(203)

(5)

Total other comprehensive income that will be reclassified to profit or loss


(3,434)

(527)

Total other comprehensive loss net of tax


(3,434)

(527)

Total comprehensive (loss) / income


(366)

3,436

Comprehensive (loss) / income attributable to:




Comprehensive (loss) / income, attributable to owners of parent


(432)

3,033

Comprehensive income, attributable to non-controlling interests


66

403



(366)

3,436

Earnings per share attributable to owners of the parent during the year




Basic earnings per share




Basic earnings per share


1.67

2.08

Diluted earnings per share




Diluted earnings per share


1.65

2.05

 

 

 

 

 

 

 

Statement of Changes in Equity - Group

Figures in £'000

Share

Capital

Share

premium

Share

Redemption

Reserve

Foreign

currency

translation

reserve

Retained

income

Attributable

to owners
of the
parent

Non-

controlling

interests

Total

Balance at 1 July 2021

1,698

11,491

-

(5,258)

6,846

14,777

3,637

18,414

Changes in equity









Profit for the year

-

-

-

-

3,555

3,555

408

3,963

Other comprehensive income

-

-

-

(522)

-

(522)

(5)

(527)

Total comprehensive income for the year

-

-

-

(522)

3,555

3,033

403

3,436

Non-controlling interests in subsidiary dividend

-

-

-

-

-

-

(139)

(139)

Decrease of Non‑Controlling Interest (21.30%)

-

-

-

(500)

3,589

3,089

(3,089)

-

Increase of Non‑Controlling Interest (4.67%)

-

-

-

110

(787)

(677)

677

-

Decrease of Non‑Controlling Interest (4.24%)

-

-

-

(100)

715

615

(615)

-

Increase of Non‑Controlling Interest (4.24%)

-

-

-

100

(715)

(615)

615

-

Cost of share repurchase in subsidiary (21.30%)

-

-

-


(3,999)

(3,999)

(413)

(4,412)

Proceeds on issue of shares in subsidiary (4.67%)

-

-

-


716

716

74

790

Cost of share repurchase in subsidiary (4.24%)

-

-

-


(653)

(653)

(68)

(721)

Proceeds on issue of shares in subsidiary (4.24%)

-

-

-

-

653

653

68

721

Cost of Share Options Issued

-


-

-

11

11

-

11

Cost of Company Shares Repurchase

(53)

-

53


(401)

(401)

-

(401)

Shares issued from options exercised

33

71

-

-

-

104

-

104

Balance at 30 June 2022

1,678

11,562

53

(6,170)

9,530

16,653

1,150

17,803

Balance at 1 July 2022

1,678

11,562

53

(6,170)

9,530

16,653

1,150

17,803

 

Figures in £'000

 

Share

Capital

Share

premium

Share

Redemption

Reserve

Foreign

currency

translation

reserve

Retained

income

Attributable

to owners
of the
parent

Non-

controlling

interests

Total

Changes in equity










Profit for the year


-

-

-

-

2,798

2,798

270

3,068

Other comprehensive loss


-

-

-

(3,231)

-

(3,231)

(203)

(3,434)

Total comprehensive income for the year


-

-

-

(3,231)

2,798

(433)

67

(366)

Non-controlling interests in subsidiary dividend


-

-

-

-

-

-

(184)

(184)

Balance at 30 June 2023

 

1,678

11,562

53

(9,401)

12,328

16,220

1,033

17,253



 

Statements of Cash Flows - Group



Group

Group

Figures in £'000


2023

2022

Net cash flows from operations


4,511

6,471

Finance cost paid


(521)

(1,884)

Income taxes paid


(647)

(1,590)

Net cash flows from operating activities


3,343

2,997

Cash flows used in investing activities




Proceeds from sale of Kilimapesa


-

312

Proceeds from sale of Caracal


727

-

Other cash payments to acquire equity or debt instruments of other entities


(126)

-

Proceeds from sale of property, plant and equipment


30

142

Acquisition of property, plant and equipment


(1,911)

(850)

Cost of Share Repurchase from Minority Shareholder in Subsidiary


-

(3,791)

Cash flows used in investing activities


(1,280)

(4,187)

Cash flows (used in) / from financing activities


 

 

Proceeds from drawdown of interest-bearing borrowings


-

3,031

Proceeds from issue of shares in Subsidiary to Minority Shareholder


-

247

Proceeds from exercise of share options


-

104

Payment of interest-bearing borrowings


(1,620)

(673)

Cost of Share Repurchase in Company


-

(401)

Repayments of other financial liabilities


-

-

Repayment of leases


(287)

(367)

Payment of dividend by subsidiary to non-controlling interest


(185)

(139)

Cash flows (used in) / from financing activities

 

(2,092)

1,802

Net (decrease) / increase in cash and cash equivalents


(29)

612

Cash and cash equivalents at beginning of the year


3,895

3,459

Foreign exchange movement on opening balance


(1,085)

(176)

Cash and cash equivalents at end of the year

 

2,781

3,895



 

Accounting Policies

1. General information

Goldplat plc is a public company limited by shares domiciled and registered in England and Wales.

The address of the Company's registered office is Salisbury House, London Wall, London, the United Kingdom EC2M 5PS. The Group primarily operates as a producer of precious metals on the African continent.

2. Basis of preparation and summary of significant accounting policies

Statement of compliance

The consolidated and separate financial statements have been prepared in accordance with UK - adopted International Accounting Standards ("IAS") and the Companies Act 2006 as applicable to entities reporting in accordance with IAS; as applicable to entities reporting in accordance with IFRS.

Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis, except for derivative financial instruments that have been measured at fair value.

Functional and presentation currency

These consolidated financial statements are presented in Pounds Sterling, which is considered by the directors to be the most appropriate presentation currency to assist the users of the financial statements. All financial information presented in GBP has been rounded to the nearest thousand, except when otherwise indicated.

The Group's subsidiaries' functional currency is considered to be the South African Rand (ZAR), Ghana Cedi (GHS) and the Company's functional currency is Pounds Sterling (GBP) as these currencies mainly influences sales prices and expenses.

Use of estimates and judgements

The preparation of the consolidated and separate financial statements in conformity with UK - adopted IAS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised if the revision affects only that period, or in the period of revision and future periods of the revision if it affects both current and future periods.

Critical estimates and assumptions that have the most significant effect on the amounts recognised in the consolidated financial statements and/or have a significant risk of resulting in a material adjustment within the next financial year are as follows:

·    Carrying value of goodwill GBP4,664,000 (2022: GBP4,664,000) 

·    Inventory - precious metals on hand and in process to the value of GBP16,618,000 (2022: GBP8,186,000)

·    Rehabilitation provision GBP743,000 (2022: GBP811,000)

·    Useful economic lives

·    Estimated revenue to the value of GBP27,531,000 (2022: GBP8,620,000)

3. Share capital, premium and redemption reserve

3.1 Authorised and issued share capital


Group

Group

Figures in £'000

2023

2022

Issued



Ordinary shares

1,678

1,678


1,678

1,678

Share premium

11,562

11,562


13,240

13,240

3.2 Reserves

Ordinary shares

All shares rank equally with regard to the Company's residual assets. The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.

Share premium

Represents excess paid above nominal value on historical shares issued.

Exchange reserve

The exchange reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations.

Non-controlling interest

Relates to the portion of equity owned by minority shareholders.

Capital Redemption Reserve

Portion of share capital repurchased by the Company.

4. Employee benefits expense


Group

Group

Figures in £'000

2023

2022

Wages and salaries

4,416

4,009

Performance based payments

522

424

National insurance and unemployment fund

64

57

Skills development levy

43

37

Medical aid contributions

36

36

Group life contributions

64

58

Provident funds

69

53

Total

5,214

4,674

The average number of employees (including directors) during the year was:



Directors

5

7

Administrative personnel

38

26

Production personnel

415

394


458

427

 



 

Directors emoluments

Executive

Non-executive

Total

2023




Wages and salaries

178

-

178

Fees

-

141

141

Other benefits

62

-

62

Total

240

141

381

2022




Wages and salaries

181

-

181

Fees

-

149

149

Other benefits

3

-

3

Total

184

149

333

Emoluments disclosed above include the following amounts paid to the highest director:


2023

2022

Emoluments for qualifying services

240

184

Key management apart from the Directors, the emoluments paid to key management personnel amounted to 2023 : GBP793,000 (2022: GBP806,000).

5. Earnings per share

5.1 Basic earnings per share

The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share are as follows:


Group

Group

Figures in £'000

2023

2022

Earnings used in the calculation of basic earnings per share

2,798

3,555

Weighted average number of ordinary shares used in the calculation of basic earnings per share

167,783

171,018

5.2 Diluted earnings per share

The earnings used in the calculation of diluted earnings per share are as follows:


Group

Group

Figures in £'000

2023

2022

Earnings used in the calculation of basic earnings per share

2,798

3,555

The weighted average number of ordinary shares for the purpose of diluted earnings per share reconciles to the weighted average number of ordinary shares used in the calculation of basic earnings per share as follows:



Weighted average number of ordinary shares used in the calculation of basic earnings per share

167,783

171,018

Adjusted for - Dilutive effect of share options

1,899

2,039

Weighted average number of ordinary shares used in the calculation of diluted earnings per share

169,682

173,057

6. Related parties

Other related parties

Entity name

2023 Holding

2022 Holding

Gold Mineral Resources Limited

100%

Direct

100%

Direct

Goldplat Recovery (Pty) Ltd

91%

Direct

91%

Direct

Gold Recovery Ghana Limited

100%

Indirect

100%

Indirect

Anumso Gold Limited

49%

Indirect

49%

Indirect

Nyieme Gold SARL

100%

Indirect

100%

Indirect

Midas Gold SARL

100%

Indirect

100%

Indirect

Gold Recovery Brasil Recuperacao

100%

Direct

100%

Direct

Gold Recovery Peru SAC

100%

Indirect

100%

Indirect

GRG Tolling Ltd

100%

Indirect

100%

Indirect

Major inter-company transactions


Nature of transaction

2023

2022

Goldplat Recovery to Gold Recovery Ghana

Goods, equipment and services supplied

679

334

Goldplat Recovery to Gold Mineral Resources

Goods, equipment and services supplied

91

489

Goldplat Recovery to Gold Mineral Resources

Interest received

(149)

(120)

Goldplat Recovery to NMT Capital

Management fees

-

1

Goldplat Recovery to NMT Group

Managements fees

-

1

Goldplat Plc to Gold Mineral Resources

Management fees

-

-

Goldplat Recovery to Aurelian Capital

Trade and other payables

1

138

Goldplat Recovery to Aurelian Capital

Dividends Receivable - Aurelian

150

275

Goldplat Recovery to Aurelian Capital

Management fees

17

15

Goldplat Plc

Directors

141

149

7. Subsequent events

There are no events subsequent to 30 June 2023 that will have a material effect on the consolidated financial statements.

 

 

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