Preliminary Results for the year to 30 June 2019

RNS Number : 0541O

Goldplat plc

30 September 2019

 

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

30 September 2019

Goldplat plc

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

Preliminary Results

Goldplat plc, the AIM listed gold producer, with international gold recovery operations located in South Africa and Ghana and a gold mine in Kenya is pleased to announce its preliminary results for the year ended 30 June 2019 ('FY 2019').

Operations / Corporate

·    For the year to 30 June 2019 Group results from operating activities were a disappointing loss of £501,000 (2018: profit of £2,509,000). 

·    Within this, however, Recovery operations produced a reportable segment profit before tax £1,581,000 (2018: £3,769,000) whilst Mining and exploration produced a reportable segment loss before tax of £1,934,000 (2018: loss £897,000).

·    The mining operation has been put on care and maintenance, with limited processing currently undertaken, and so its operating losses have been stemmed.

·    Net cash position for the Group of £1,808,000 as at 30 June 2019 (£1,539,000 as at 30 June 2018)

Goldplat Recovery (Pty) Ltd ('GPL') - South Africa

·    Revenues decreased to £17,342,000 (2018: £22,669,000) and operating profits decreased to £2,607,000 (2018: £3,667,000). 

·    The South African subsidiary reported a net profit after tax of £1,901,000 (2018: £2,765,000).

·    Good progress made in reducing processing costs and in design of the plant to facilitate processing of low-grade contaminated material profitably in future

·    GPL's tailings storage facility ('TSF') is reaching full capacity, and GPL has two options available for future deposition, thus afford the Company an opportunity to monetise its current tailings.

Gold Recovery Ghana Limited ('GRG') - Ghana

·    Revenues decreased to £4,427,000 (2018: £8,241,000) and operating profits decreased to a loss of £536,000 (2018: Profit £646,000).

·    Significant work has gone into opening the markets in West Africa, especially Burkina Faso, Mali and the Ivory Coast, and the first batch of material from Mali was received towards the end of the year under review.

·    Successful plant clean-up for a South American producer was performed during the year and are still continuing.

Kilimapesa Gold (Pty) Limited ('Kilimapesa') - Kenya

·    Revenues decreased from £4,834,000 to £3,068,000 due to lower production and losses before finance costs increased to £1,643,000 (2018: Loss: £986,000)

·    A decision was made to put the mining operation under care and maintenance effective 1 June 2019.

·    Goldplat is seeking an investment partner for the mine to enable the Group to realise value from the operation without having to invest additional capital. 

·    A positive development has been the fact that the Kenya Revenue Authority has started refunding some of the Company's VAT claims after the year-end, which had remained unpaid since the time of incorporation.

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

Werner Klingenberg                            Goldplat plf (CEO)                                                     Tel: [phone]

Colin Aaronson / Ben AO Roberts     Grant Thornton UK LLP (Nominated Adviser)       Tel: [phone]

James Joyce / Jessica Cave                WH Ireland Limited (Broker)                                     Tel: [phone]

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

Chairman's Statement

The Group's three principal operations comprise precious metal recovery facilities in South Africa and Ghana, and the gold mining, ore processing and exploration operation in Kenya.

For the year to 30 June 2019 Group results from operating activities were a disappointing loss of £501,000 (2018: profit of £2,509,000).  Within this, however, Recovery operations produced a reportable segment profit before tax £1,581,000 (2018: £3,769,000) whilst Mining and exploration produced a reportable segment loss before tax of £1,934,000 (2018: loss £897,000).

Cash and cash equivalents at the year-end stood at £1,808,000 (2018: £1,539,000) whilst Net Current Assets stood at £3,348,000 (2018: £4,785,000)

In response to the operating results in Kenya, the mining operation has been put on care and maintenance, with only limited ore processing currently undertaken, and so its operating losses have been stemmed.  We are seeking external investors to partner us in Kenya and the outcome of this exercise will inform how we proceed.

The South African Recovery operation performed strongly over the year, albeit with a weak first quarter.  The Ghanaian Recovery operations have continued to significantly underperform because of material supply issues.  The performance of both Recovery operations is dependent on the quality and quantity of material which we can acquire for processing.

We continue our initiatives to widen the types of material we process, as well as our geographic reach, making full use of the very extensive skill-sets and resources we have in-house.  We are optimistic that these initiatives can address the supply issues in Ghana, secure better visibility on earnings in South Africa and provide opportunities to grow both businesses.

In April 2019 Goldplat announced the appointment of Werner Klingenberg as interim CEO following the resignation of Gerard Kisbey-Green and, after wide review, we were pleased recently to confirm the appointment on a permanent basis.  Werner has been with Goldplat in various roles since 2015 and has an extensive and dispassionate understanding of the group.  The board now comprises three non-executive and three executive directors.  The fulfilment of the role of CFO, currently held by Werner, on a permanent basis is under consideration.

Gerard Kisbey-Green, who joined Goldplat's board in 2014, took on the role of CEO in 2015.  On behalf of the whole board I thank Gerard for his significant contribution and service to Goldplat over that time.

The Group's performance in relation to its health and safety and environmental obligations has been exemplary.  We are very conscious of the impact on the local community from our decision to put the Kenyan operation on care and maintenance, resulting in significant retrenchment of the workforce.  We welcome the Kenyan authorities' positive attitude to our efforts to find an investor to partner with us.

I would like to again thank our employees in South Africa, Ghana and Kenya, as well as my fellow board members and Goldplat's advisers, for their efforts over the year.  I believe the group has a very positive future and I look forward to their continued contributions.

MATTHEW ROBINSON CHAIRMAN

30 September 2019

Operations and Financial Report

Introduction

Goldplat's performance for FY 2019 did not reflect the anticipated increased production or profitability we expected when we published in the 2018 report.

Sourcing of material for the recovery operations remains the main area of focus.  Strategically, especially in South Africa, where the gold industry is declining, it is important for the Company to position itself to economically process lower grade material and to opportunistically take advantage of higher-grade material from old mining remnant clean-ups and by-products to sustain good levels of profitability.  Significant test work has been done on our stockpiles, including some batch processing.  We are satisfied with the results, but further test work is required before large investments in similar stockpiles will be made.

The production from the Ghana recovery operation was less than satisfactory during the year under review, as the Company suffered with a lack of material to process whilst the market is being developed. Progress has been made in developing the market in West Africa outside of Ghana, and we made a first successful import from this region towards the end of FY 2019.  The efforts of the past two years are slowly bearing fruits and we have better visibility on acquiring material going forward.  Gold Recovery Ghana is gaining traction in South American sourcing which bodes positively for the future.

Production at Kilimapesa decreased month-by-month during the year under review, and a decision was made to put the mine under care and maintenance as from June 2019.  The Company ran out of ground to mine due to a lack of underground flat development which is a direct result of the poor cash position at Kilimapesa.

Currently small batches of artisanal tailings are being processed to cover care and maintenance costs whilst an investment partner for the mine is sought.

Group profitability is expected to improve since Kilimapesa's sustained losses have been stemmed.

Areas of Strategic Focus

The following areas of strategic focus were identified:

·     Sustainability of sourcing material at the recovery operations will remain the highest priority and, in pursuit of this, it was decided to concentrate more on lower grade material for which there is less competition as the main feed source in both South Africa and Ghana; this will be achieved through increased efficiencies, investment in equipment and possibly having processing capacity in the form of specific plant and equipment closer to the sources of material.

·     Reserves of lower grade material, which are available in larger volumes, should yield acceptable margins and can serve as the main feed source for the CIL operations in South Africa.  In Ghana we aim to get approval to treat low grade material using third party facilities.

·     Sourcing sufficient commercially viable by-products (mainly fine carbon) remains the key to the Ghana recovery business and we will continue our marketing efforts in West Africa and South America.

·     Diversification into processing Platinum Group Metal ('PGM') materials has been a long-identified strategy and we expect to focus this aspect.

·     The project regarding the re-processing of the existing stock dam in South Africa remains a future revenue source but is dependent on obtaining an alternative tailings storage facility.  A decision in this regard is expected to be made by the end of the second quarter of FY 2020.

·     Achieving profitability from Kilimapesa. Goldplat is seeking an investment partner to provide the required funding to develop the mine and property.

·     Strategically, the prospectivity of Kilimapesa in a rising gold market also offers an attractive exploration opportunity for an interested party.

·     Goldplat's strategy when it came to the AIM market in 2006 was to use surplus cash flow from the recovery operations to fund its development as a junior gold miner.  With Kilimapesa placed under care and maintenance and an external investment being sought, it prompts the on-going review of Goldplat's strategy.  Goldplat will continue to look beyond its current recovery operations for opportunities to apply its skillsets and resources to promote its longer-term growth.

Gold Production and Sales

Sales revenues from the recovery operations decreased by 25% to £21,769,000 (2018: £28,962,000), the decrease being mainly attributable to the lower procurement of material than expected from the Ghana operations.

Mining revenues decreased by 36% to £3,068,000 (2018: £4,834,000) which is directly attributable to the poor cash position at Kilimapesa and the resultant lack of underground development to open mineable resources.  Kilimapesa has been placed on care and maintenance since June 2019, whilst an investment partner is sought.

Albeit we saw highs of US$1,430/oz gold prices during the FY, the average of US$1,263/oz (2018: US$1,293/oz) was slightly lower than the previous period.

Goldplat's Recovery Operations

Goldplat recovers precious metals, primarily gold and silver but also PGM's, from by-products of the mining industry and gains its competitive advantage from a combination of the diversity and flexibility of its treatment circuits, which make possible the recovery of metals and concentrates from these by-product materials, the strategic geographic locations of the Group's operations, and the extensive depth of knowledge and experience of its longstanding team.

Goldplat sources by-products from the mining and related industries.  These include coarse and fine carbon, woodchips, rubber and steel mill liners, grease, concentrate bags, surface materials and rock dumps.  The Group also assists in old mining plant clean-up operations.  These materials typically present an environmental risk and cost to producers but can become a source of precious metals and revenue when processed by Goldplat.  Clients include various gold producers in South Africa and Ghana as well as numerous producers from elsewhere in the world, including a growing number of PGM producers and a number of refineries requiring the processing of concentrate materials prior to final refining as bullion.

Goldplat Recovery (Pty) Ltd - South Africa

GPL has been serving mainly the South African mining industry for many years and its processing facilities include several separate facilities which can treat various mining products.  Its strength lies in the fact that a specific processing path can be designed for a batch of material, utilising the Company's milling capacity (three separate main mills and four batch mills), wash plants, incinerator plants, a spiral and flotation plant.

Revenues decreased to £17,342,000 (2018: £22,669,000) and operating profits decreased to £2,607,000 (2018: ££3,667,000).  The South African subsidiary reported a net profit after tax of £1,901,000 (2018: £2,765,000).

A large once-off contract benefitted both the 2017 and 2018 financial years and this year's result reflects a more normalised situation.

Notwithstanding a poor first quarter both the by-product section and the CIL sections performed well in the second half of FY 2019.  The by-products section was supported by a drive to reduce older inventories of lower grade material and stock-levels are low by historic standards which greatly improves inventory management and reduces the associated risk of holding inventory.

The CIL sections benefited from good quality material sourced and also afforded GPL the opportunity to process a large batch of its strategic, lower grade, stockpile during the last month of the year.  The results were marginal, as expected at this stage, and it is believed that recoveries can be improved by screening.

By reducing processing costs and increasing the recovery percentages, GPL reduces the sourcing risk for the CIL circuits, by allowing the sourcing team to procure lower grade material in larger volumes.  This can act as a buffer stock when plant capacity cannot be fully utilised on higher grade material.  With the opportunity to consider lower grade material in mind, the Company has strengthened its sourcing team.

With this strategic objective to treat more low-grade material, it was decided to install a wet screening section and change the feed arrangement to one of the mills by January 2020.  This improvement to the plant will assist in removing some carbonaceous matter before the material reaches the milling phase and will not only increase the recovery percentage but should also increase volumes processed.  Cost reduction initiatives will reduce the processing cost and increase the margins on this low-grade material.

Consolidation continues in the South African gold industry; mines are closing and are becoming more efficient in their processing, resulting in reduced volumes and grade of by-products received. We maintain good relationships with the few remaining mining houses and have contracts with major producers; with the exception of one, contracts are not long-term and so there is a risk should we lose the support of a big supplier.

GPL's tailings storage facility ('TSF') is reaching full capacity.  The Company has two options available to expand the TSF.  The request to the Department of Minerals Resources to deposit tailings into the old workings at West Pit 3 has become entangled in bureaucracy and there is no clarity on timescale to resolve this.  The Company may therefore opt to deposit tailings adjacent to its current TSF.

The upside with a new tailings facility will be that it will allow the existing TSF to fully de-water and thus afford the Company an opportunity to monetise its current tailings.  At this stage trucking the contents of the TSF (containing 81,959 ounces of JORC Compliant Resource) away and processing the material at a third-party tailings' processor, still to be sought, is considered the best option for shareholders, but the TSF will take a number of years to dry before the Company will be able to truck the material.

Gold Recovery Ghana Limited - Ghana

GRG's gold recovery operation is located in the free port of Tema in Ghana and is afforded a favourable corporate tax rate of 15%.

Processing facilities include the elution plant erected in 2018, a spiral section, incinerators and a shotblast facility.  Gold doré smelted is exported directly to a refiner and concentrates are either exported to GPL or to one of the Group's refinery partners.  GRG has served the Ghana gold industry for more than a decade and has recently started importing by-products from other West African countries.  Imports from South America and East Africa continue.

Revenues decreased to £4,427,000 (2018: £8,241,000) and operating profits decreased to a loss of £536,000 (2018: Profit £646,000).

The result for the year reflects the sourcing risk the recovery operations has. As a result, the plant ran under capacity for most of the year.

Significant work has gone into opening the markets in West Africa, especially Burkina Faso, Mali and the Ivory Coast, and the first batch of material from Mali was received towards the end of the year under review. Current indications are that imports from Burkina Faso will be possible once the judiciary has reversed a decision by the Burkina Faso customs to stop the export of a batch of carbon by a mining house to another processor.  The Company is gaining traction in imports from South America and although margins and volumes are still low, it helps to keep the plant utilised.

We also visited Saudi Arabia and will provide an update in due course.

A subsidiary company will be registered in Peru to represent Goldplat with the objective to facilitate the sourcing and exports of material to GRG.  As the market is exposed into other jurisdictions similar subsidiaries will be formed.

The opening of markets in regions other than Ghana are key to obtaining sustained profitability in Ghana.

To diminish the risk to the Ghana operation, we are continuing to work closely with the Ghana Government to obtain permission to restart tolling operations of low-grade material.

A plant clean-up for a South American producer was started during the year. The grade of material around the site did however not warrant the restart of the plant mill and therefore the clean-up focused on the smelt house and other high-grade areas inside the plant.

Goldplat's Mining and Exploration

Kilimapesa Gold (Pty) Limited - Kenya

KPG is a gold mine located in South Western Kenya.  The mine is located in the historically productive Migori Archaen Greenstone Belt and has a total resource of 6,810,000 tons at 2,43 g/t of gold for a total of 531,631 ounces of gold at 1 g/t. The total resource excludes the Red Ray resource on our prospecting license of 1,905,291 tons at 2,28 g/t of gold for a total of 139,185 ounces of gold at 1 g/t which has been granted to a third party and remains under dispute. We continue to engage with the Ministry of Mines with regards to the issuing of this exploration licence to a third party.

Revenues decreased from £4,834,000 to £3,068,000 due to lower production and losses before finance costs increased to £1,643,000 (2018: Loss: £986,000)

Gold produced gradually decreased after Q1 as a result of the mine not being developed ahead to open mineable ground.  The mine has been experiencing cashflow problems for some time due to the impact of sustained losses.  A decision was made to put the mining operation under care and maintenance effective 1 June 2019 with small batches of surface material being processed to offset the cost of care and maintenance.

Goldplat is seeking an investment partner for the mine to enable the Group to realise value from the operation without having to invest additional capital.  Early stage talks with a number of interested parties continues.

Substantial work was done on the establishment of Kilimapesa's tailings storage facility with the installation of a penstock and return water compartment.

A positive development has been the fact that the Kenya Revenue Authority has started refunding some of the Company's VAT claims after the year-end, which had remained unpaid since the time of incorporation.  This action sends a positive message to potential investors into Kenya as an investment destination and for Kilimapesa it is of tremendous importance as the funds will be applied to reduce the Company's debt.

Anumso Gold Project - Ghana

During FY 2016, Goldplat entered into an earn-in option agreement with Ashanti Gold Corp ("Ashanti').

On 5 November 2018, Ashanti provided notice to Goldplat that it intended to exercise its 51% option on Anumso Gold Project.  On 27 December 2018, Ashanti informed Goldplat that it will not elect to take up the subsequent option for an additional 24% of Anumso Project.

After analysis of the amount and nature of the earn-in expenditure, Goldplat has concurred that the US$1,500,000 spend by Ashanti met the requirement for the exercise of the 51% option.

The two companies are currently finalizing the shareholders agreement and once done additional shares in Anumso will be issued to Ashanti.  As the agreement has not been finalized and the additional shares have not been issued, the issue of additional shares and the consideration for the shares of an exploration asset to the value of US$1,500,000 have not been recognized in the annual report.

Additional financial review

The operating currencies for the Group are South African Rand (ZAR), Ghanaian Cedi (GHS) and Kenyan Shilling (KES). The average exchange rates for the year used in the conversion of operating currencies in the Statement of Profit or Loss and Other Comprehensive Income strengthened against the Pound Sterling during the period under review, apart from the Ghanaian Cedi (GHS) which weakened by circa 10%.

The net finance cost of £586,000 (FY 2018: £722,000) includes £371,000 (FY 2018: £543,000) interest on borrowings and finance liabilities. The decrease in interest on borrowings and finance liabilities was due in part to repayment of the loan that financed of the construction of the elution plant at GRG during the previous period and in part to the reduction in sales resulting in less pre-financing of sales to smelters and refiners.

Included in the foreign exchange loss of £234,000 (FY 2018: £199,000) is an unrealised loss of £346,000 in GRG that was due to the increase in the amount of Ghanaian Cedi (GHS) to be repaid on its intercompany USD Dollar loan.

The additional foreign exchange loss is mainly as a result of the movement of the operating currencies against the US Dollar. The performance of the operating currencies against the USD Dollar fluctuated significantly during the period but year on year and on average all operating currencies weakened against the USD Dollar.

Taxation

The taxation expense includes GBP268,000 of dividend taxation paid on declaration of dividends from GPR. The dividend taxation rate in South Africa is 20%.

Contingencies

Trade and other receivables for the Group include a balance of £1,303,000 (FY 2018: £1,074,000) of Value-Added Taxation receivable from the Kenya Revenue Authority. Of the current balance £639,000 is older than three years. A positive development has been the fact that the Kenya Revenue Authority has started refunding some of the Company's VAT claims after year-end to the value of circa £169,000. Management is of the opinion that there is no legal reason not to recover the balance.

Outlook

Whilst sourcing of sufficient material to process economically remains key to growth and profitability for Goldplat in a declining gold industry in South Africa and to a lesser extent in Ghana, management is focused on identifying opportunities for growth in the recovery operations by investing into other locations and additional equipment in the jurisdiction it currently operates in, as well as enhancing operational efficiencies. This should enable the processing of lower grade material at current operations and at different locations closer to the source.

Focus will remain on sourcing more material for the Ghana operations from West Africa, South America and the other regions, whilst re-positioning GRG to process lower grade material sourced from within Ghana.

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 diversifying into PGM's where possible.  The preferred option is to process our stock dams (which has a JORC Compliant Resource of 81,959 ounces) through a third party's plant on a toll basis.  To achieve this, we have to design and build a new tailings storage facility whilst the stock dam dries out over the next three to five years.

Primary production at Kilimapesa is dependent on finding an investment partner into the mine and the successful operation of the mine.

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 longer term slow 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 (of which there are larger quantities with less competition), as well as by seeking 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

With the continued changes and uncertainty in the markets in which we operate, I believe Goldplat is well placed to take advantage of opportunities that will present themselves. I would like to thank our Goldplat employees, its advisors, my fellow directors and the Company's shareholders for their efforts and support during the year on many fronts. The Board looks forward to successes on identified strategic initiatives and consequent growth in production and profitability.

WERNER KLINGENBERG CHIEF EXECUTIVE OFFICER 30 September 2019

Financial Statements

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2019

	Notes	2019 £'000	2018 £'000
Continuing operations Revenue Cost of sales		24,837 (23,325)	33,796 (28,725)
Gross profit Administrative expenses		1,512 (2,013)	5,071 (2,562)
(Loss)/Profit from operating activities Finance income Finance costs		(501) 19  (605)	2,509 20 (742)
Net finance cost		(586)	(722)
(Loss)/Profit from operating activities after finance income		(1,087)	1,787
Taxation		(653)	(1,281)
(Loss)/Profit for the year		(1,740)	506
(Loss)/Profit attributable to: Owners of the Company Non-controlling interests		(2,234) 494	(213) 719
(Loss)/Profit for the year		(1,740)	506
Other comprehensive income Foreign exchange cost on translation of subsidiaries Exchange translation		(27)	(880)
Other comprehensive expense for the year		(27)	(880)
Total comprehensive expense for the year		(1,767)	(374)
Total comprehensive (expense)/income attributable to: Owners of the Company		(2,261)	(1,093)
Non-controlling interests		494	719
Total comprehensive expense for the year		(1,767)	(374)
Earnings per share Basic loss per share (pence)		(1.33)	(0.13)

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 30

		2019 £'000	2018 £'000
Assets
Property, plant and equipment		7,512	8,023
Intangible assets		8,201	8,462
Proceeds from sale of shares in subsidiary		950	1,137
Non-current assets		16,663	17,622
Inventories		5,842	7,791
Trade and other receivables		7,918	7,603
Cash at bank and on hand		2,368	1,915
Current assets		16,128	17,309
Total assets		32,791	34,931
Equity Share capital		1,675	1,675
Share premium		11,441	11,441
Exchange reserve		(6,100)	(6,073)
Retained earnings		8,858	11,092
Equity attributable to owners of the Company		15,874	18,135
Non-controlling interests		2,991	2,964
Total equity		18,865	21,099
Liabilities
Obligations under finance leases		151	268
Provisions		633	417
Deferred tax liabilities		362	623
Non-current liabilities		1,146	1,308
Bank overdraft		560	376
Obligations under finance leases		213	192
Interest bearing borrowings		528	728
Taxation		53	300
Trade and other payables		11,426	10,928
Current liabilities		12,780	12,524
Total liabilities		13,926	13,832
Total equity and liabilities		32,791	34,931

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AS AT JUNE 30 2019

	Share capital £'000	Share premium £'000	Attributable to owners of the Company Exchange Retained     reserve       earnings       Total         £'000             £'000      £'000			Non-controlling interests £'000	Total Equity £'000
Balance at 1 July 2018	1,675	11,441	(6,073)	11,092	18,135	2,964	21,099
Total comprehensive (expense)/income for the year
(Loss)/profit for the year	-	-	-	(2,234)	(2,234)	494	(1,740)
Total other comprehensive expense	-	-	(27)	-	(27)	-	(27)
Total comprehensive (expense)/income for the year	-	-	(27)	(2,234)	(2,261)	494	(1,767)
Changes in ownership interests in subsidiaries
Non-controlling interests in subsidiary dividend	-	-	-	-	-	(467)	(467)
Total transactions with owners of the Company	-	-	-	-	-	(467)	(467)
Balance at 30 June 2019	1,675	11,441	(6,100)	8,858	15,874	2,991	18,865

	Share capital £'000	Share premium £'000	Attributable to owners of the Company Exchange       Retained     reserve       earnings             Total         £'000             £'000             £'000			Non-controlling interests £'000	Total Equity £'000
Balance at 1 July 2017	1,675	11,441	(5,193)	11,305	19,228	2,673	21,901
Total comprehensive income for the year
(Loss)/Profit for the year	-	-	-	(213)	(213)	719	506
Total other comprehensive income	-	-	(880)	-	(880)	-	(880)
Total comprehensive (expense)/income for the year	-	-	(880)	(213)	(1,093)	719	(374)
Changes in ownership interests in subsidiaries
Non-controlling interests in subsidiary dividend	-	-	-	-	-	(428)	(428)
Total transactions with owners of the Company	-	-	-	-	-	(428)	(428)
Balance at 30 June 2018	1,675	11,441	(6,073)	11,092	18,135	2,964	21,099

CONCOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2019

			2019 £'000	2018 £'000
Cash flows from operating activities
(Loss)/Profit for the year			(501)	2,509
Adjustments for:
Depreciation			956	856
Amortisation			222	218
Loss on sale of property, plant and equipment			-	7
Foreign exchange differences			(134)	(415)
			543	3,175
Changes in:
- inventories			1,949	1,171
- trade and other receivables			(315)	4,400
- trade and other payables			498	(5,503)
Cash generated from operating activities			2,675	3,243
Finance income			19	20
Finance cost			(586)	(647)
Taxes paid			(725)	(1,153)
Net cash from operating activities			1,383	1,463
Cash flows from investing activities
Proceeds from sale of property, plant and equipment			-	7
Enhancement of exploration and development asset			-	(17)
Acquisition of property, plant and equipment			(331)	(1,738)
Receipt of proceeds from sale of shares in subsidiary			199	181
Non-current cash deposit			-	201
Net cash used in investing activities			(132)	(1,366)
Cash flows from financing activities Proceeds from drawdown of interest-bearing borrowings			-	358
Payment of interest-bearing borrowings			(200)	(802)
Payment of dividend by subsidiary to non-controlling interest			(467)	(428)
Payment of finance lease liabilities			(242)	(183)
Net cash flows used in financing activities			(909)	(1,055)
Net increase/(decrease) in cash and cash equivalents			342	(958)
Cash and cash equivalents at 1 July			1,539	2,650
Foreign Exchange Movement on opening balance			(73)	(153)
Cash and cash equivalents at 30 June			1,808	1,539

NOTES TO THE RESULTS ANNOUNCEMENT

1. Basis on preparation

(a) Statement of compliance

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRSs") as issued by the International Accounting Standards Board ("IASB") and as adopted by the European Union, and the Companies Act 2006 as applicable to entities reporting in accordance with IFRS.

(b) Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis.

(c) Functional and presentation currency

These consolidated financial statements are presented in Pounds Sterling ("GBP"), 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 Company's functional currency is considered to be the US Dollar ("USD") as this currency mainly influences sales prices and expenses.

 (d) Use of estimates and judgements

The preparation of the consolidated financial statements in conformity with IFRS 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

·    Capitalisation of pre-production expenditure

·    Precious metals on hand and in process

Accounting entries are made in accordance with the accounting policies detailed below.

2. Earnings per share

 Basic earnings per share

The calculation of basic earnings per share at 30 June 2019 was based on the loss attributable to owners of the Company of £2,234,000 (2018: loss £213,000), and a weighted average number of ordinary shares outstanding of 167,441,000 (2018: 167,441,000), calculated as follows:

Loss attributable to ordinary shareholders

                                                                            2019                2018

                                                                     £'000               £'000

Loss attributable to

owners of the Company                                                                       (2,234)               (213)

Weighted average number of ordinary shares

                                                                            2019                2018

                                                                     £'000               £'000

Issued ordinary shares at 1 July                                                      167,441,000     167,441,000

Weighted average number of ordinary shares at 30 June         167,441,000     167,441,000

Diluted earnings per share

Diluted earnings per share at 30 June 2019 and 30 June 2018 have not been calculated as the effect would be antidilutive.

3.   Directors' emoluments 2019

2019 Executive		Non-executive		Total
	£'000		£'000		£'000
Wages and salaries	570		-		570
Fees	-		80		80
	570		80		650

2018

	Executive £'000	Non-executive £'000	Total £'000
Wages and salaries	551	-	551
Fees	-	80	80
Other benefits	100	-	100
	651	80	731

Emoluments disclosed above include the following amounts paid to the highest director:
	2019	2018
	£'000	£'000
Emoluments for qualifying services	180	216

Key management

Apart from the Directors, the emoluments paid to key management personnel amounted to £877,000 (2018: £857,000).

4. Related parties

Other than the waiver of intercompany interest and not having fix repayment dates, transactions with related parties take place on terms no more favourable than transactions with unrelated parties.

Other related party transactions

Transactions with Group companies

The Group's subsidiary Gold Mineral Resources Limited had the following related party transactions and balances:

	2019 £'000	2018 £'000
Goldplat plc
- Loans and borrowings	(4,082)	(4,402)
- Goods, equipment and services received	(322)	(358)
Kilimapesa Gold (Pty) Limited
- Loans and borrowings	7,863	5,087
Nyieme Gold SARL
- Loans and borrowings	1,281	1,252
Anumso Gold Limited
- Loans and borrowings	83	80
Midas Gold SARL
- Loans and borrowings	450	444
Goldplat Recovery (Pty) Limited
- Loans and borrowings	(4,100)	(280)
- Goods, equipment and services supplied	(51)	(41)
Gold Recovery Ghana Limited
- Loans and borrowings	1,503	-

The Group's subsidiary Goldplat Recovery (Pty) Limited had the following related party transactions and balances:

	2019 £'000	2018 £'000
Kilimapesa Gold (Pty) Limited
- Trade and other receivables	2	1,821
- Goods, equipment and services supplied	497	1,113
Gold Recovery Ghana Limited
- Trade and other receivables	67	1,364
- Goods, equipment and services supplied	175	1,146
- Purchase of precious metals	-	(1,782)
Anumso Gold Limited
- Trade and other receivables	13	12

The carrying value of these assets approximates to their fair value and require no impairment.

 

The Group's subsidiary, Gold Recovery Ghana Limited had the following related party transactions and balances in addition to those already noted:

	2019 £'000	2018 £'000
Nyieme Gold SARL - Trade and other receivables	48	-
- Goods, equipment and services supplied	-	3
Anumso Gold Limited
- Trade and other receivables	40	35
- Goods, equipment and services supplied	7	8

The Group's subsidiary Midas Gold had the following related party transactions and balances in addition to those already noted:

	2019 £'000	2018 £'000
Nyieme Gold SARL
- Trade and other payables	4	4

Other transactions

The Company and Group's subsidiary Gold Mineral Resources had the following related party transactions and balances in addition to those already noted:

	2019 £'000	2018 £'000
Directors
- Trade and other payables	(212)	(222)

 

5. Capital and reserves

Share capital and share premium
	Number of Ordinary Shares
	2019	2018
On issue at 1 July	167,441,000	167,441,000
On issue at 30 June - fully paid	167,441,000	167,441,000

Authorised - par value £0.01

1,000,000,000

1,000,000,000

	Ordinary Share Capital
	2019	2018
	£'000	£'000
Balance at 1 July	1,675	1,675
Balance at 30 June	1,675	1,675

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.

**ENDS**

 

END

 

 

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