Good morning,

Following Goldplat's positive update on its gold recovery operations, please find below a selection of notes on the Company, including one from their house broker SP Angel who have issued a BUY recommendation with a price target of 20p (current share price 10.25p). 

Goldplat this morning announced the expansion of gold recovery activity at its Goldplat South Africa operation, which continues to produce robust cashflows.  The company's planned expansion into Burkina Faso to create a third recovery unit has also been reviewed and will target grade fine carbon and mill liners from major gold producers.  In line with this, the Environmental Study has been re-commissioned and is expected to be completed at the end of August 2013 with all operating licences in place by the end of 2013.

SP Angel said:  'We continue to see Goldplat offering good fundamental value with the shares trading on a prospective PE of 6.4x coming down to 4.2x for FY 2014 and with good cash flows to pay a dividend.'

I have the full announcement and notes below.

Kind regards,

Charlotte

SP Angel

Goldplat (GDP LN) 10.125 pence, Mkt Cap ?17m - Update on Recovery Operations

Buy - Target price 20 pence

• Goldplat South Africa (GPL) - The CIL plant for new tailings re-treatment has now been commissioned and is within budget.
• The tailings treatment plant which will process tailings already on site will have sufficient material for 5 years of production.
• The investment in the plant was around R5m or $550,000 and is expected to generate profits of around $600,000 a year.
• The second rotary kiln which will be used to treat the woodchip stockpile at the plant is also on budget and is targeting commissioning by the end of July.
• The kiln will double the current available capacity at GPL and treat the wood chip stock pile providing enough material for seven years worth of capacity and is another planned investment to grow profits at GPL for a relatively modest investment of R5m.
• The company is also strengthening the team at GPL with the recruitment of Hansie van Vreeden who brings metallurgical experience from AngloGold Ashanti.
• Mr van Vreeden will be the General Manager at GPL.
• Gold Recovery Ghana (GRG) - The company continues to target improvements at GRG by improving the terms for their toll treating arrangements with Adamus which contributes to 55% of profits at GRG and where there has been some margin pressure.
• GRG has suffered a refractory failure at one of the fluidized bed incinerators which has affected throughput in this section.
• GRG has two fluidized bed incinerators and this section contributes 10% to profits at GRG.
• With one of the incinerators partially down the company is likely to be operating at 75% capacity but will be working to restore full capacity.
• The failure relates to a refractory disc in one of the chambers and can be replaced relatively easily.
• This section has been targeted for improvement and the company have added additional spirals at minimal costs to improve the quality of feed to the incinerator.
• At the CIL section which contributes 35% to profits a thickener has been delivered to site to improve recoveries at the CIL plant.
• In addition the company plan to install a rotary kiln at GRG in the second half of FY 2014.
• The rotary kiln came free when they bought the rotary kiln for the South African plant and the cost will be related to transport and installation.
• Bukina Faso expansion - The company's planned expansion into Burkina Faso to create a third recovery unit has been reviewed.
• The focus for this plant will now be to target high grade fine carbon and mill liners from major gold producers rather than treat artisanal tailings as originally planned.
• As a result of the change in focus the Environmental Study has been re-commissioned and is expected to be completed at the end of August 2013 with all operating licences in place by the end of 2013.

Conclusion: This is positive update from Goldplat on its recovery operations  with the initiatives set out to grow profits at the South African being put into place on time and on budget. These incremental investments in plant can add meaningfully to profits growth in that division with the new tailings treatment to add around $600,000 a year to profits in South Africa. The contributions from these initiatives are in our current forecasts.

The impact of failure at one of their incinerator lines in Ghana has not been quantified but we would expect this not to be significant as they have two incinerator lines in Ghana and the failure will bring capacity down to around 75% in a section that currently contributes to 10% of profits in Ghana.

The expansion into Burkina Faso to target high grade carbon and mill liners from major gold producers is in our view the best way to move forward on this expansion and when in place should provide the company a step up in growth. This is not factored into our numbers.

The recent volatility in the gold price is likely to have an impact on the company but we believe the company has the flexibility in their operations to try and minimise the impact. We continue to see Goldplat offering good fundamental value with the shares trading on a prospective PE of 6.4x coming down to 4..2x for FY 2014 and with good cash flows to pay a dividend.

Fox Davies Research

Goldplat (GDP LN, MCap: ?16.8M, 10.1p) has released an update on its African Gold Recovery Operations.
In this news:

South Africa

• New tailings re-treatment carbon-in-leach ('CIL') plant on time and within budget in March 2013. Selected tailings currently on site enough for 5 years production
• Second rotary kiln is on budget with commissioning planned for end of July 2013
• Board has appointed Hansie van Vreeden, a qualified Metallurgist, as General Manager of GPL.

Gold Recovery Ghana Limited - Ghana ('GRG')

• Profitable and Tax free until 2016 but margins under pressure and will institute tighter controls in the procurement department
• Refractory failure in one of the fluidised bed incinerators, which has reduced the throughput of that section
• Agreed more favourable terms on its toll treatment agreement with Endeavour Mining Corporation's Nzema Mine in Ghana
• Company is planning to add an additional spirals circuit to the Fine Carbon Section which will improve the quality of the feed to the incinerator; a thickener has been delivered to site and will be erected in May 2013 to improve the gold recovery at the CIL plant; and a rotary kiln has been purchased for installation at GRG in 2H'14.

Burkina Faso: Midas Gold SARL ('Midas')

• Development of 3rd gold recovery operation has been delayed for a number of reasons
• Midas has re-commissioned the Environmental Study for the site in Dano which is expected to be completed at the end of August 2013 with all operating licences to be in place by the end of the year
• Expected to be in operation by end 2013.

VSA Capital Research

Goldplat plc (GDP LN)

Goldplat's South African gold recovery operation continues to produce robust cashflows with new supply contracts recently signed with major gold producers and investing in new capital projects continuing. A second rotary kiln is on budget with commissioning planned for end of July. Meanwhile, the Ghanaian gold recovery operation is suffering from margin pressures, although it "continues to be profitable". Goldplat has agreed better terms on its toll treatment agreement with Endeavour Mining, its biggest profit centre at Ghana, among other things, to relieve some of these pressures. Finally, the Burkina Faso development has been delayed due to changes in local environmental and gold export legislation and the shift from an artisanal tailings operation to the recovery from products from the major gold producers. All operating licences are expected to be in place by year end with development taking around six months subsequent to this.

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

1 May 2013

Goldplat plc ('the Company')

African Gold Recovery Operations Update

Goldplat plc, the AIM listed gold producer in Africa, announces an operations update on its two market leading gold recovery operations in South Africa and Ghana, which recover gold from waste products of the primary gold mining industry, and an update on Golplat's gold recovery expansion plans in Africa.

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

Goldplat's South African gold recovery operation, GPL continues to produce robust cashflows with particular emphasis on fine carbon processing which has expanded significantly over the past six months with new supply contracts recently signed with major South African gold producers.

The Company has also continued to invest in new capital projects to increase the gold recovery processing capacity at GPL, reduce its stockpile inventory and in turn further increase the South African recovery operations profitability.  With this in mind, GPL commissioned the new tailings re-treatment carbon-in-leach ('CIL') plant on time and within budget in March 2013. This CIL will reprocess selected tailings which are currently on site at GPL and that are estimated to comprise five years' worth of production.  In addition, a second rotary kiln, which will double the available production capacity at GPL and will process the significant stockpile of high-grade woodchips (estimated to equate to seven years of current capacity) is on budget with commissioning planned for end of July 2013.  The new kiln has already been hoisted onto its foundations to allow for the installation of the internal shell lining, ducting and other dust cleaning equipment.

Furthermore, as part of the continued succession planning, the Board has appointed Hansie van Vreeden, a qualified Metallurgist, as General Manager of GPL.  Prior to joining GPL, Hansie was the Production Metallurgist at AngloGold Ashanti's Kopanang Gold Plant in South Africa.  The Board is delighted to welcome him to the Goldplat team and believe with his technical expertise and experience he will be ideally suited to drive both the efficiency and profitability of GPL going forward.

Gold Recovery Ghana Limited - Ghana ('GRG')

The Company's second gold recovery operation in Ghana, GRG, which enjoys a tax free status until 2016, continues to be profitable not withstanding the margin pressures that it has sustained over the past reporting period. To mitigate these margin pressures Goldplat has instituted tighter controls in the procurement department and recently agreed more favourable terms on its toll treatment agreement with Endeavour Mining Corporation's Nzema Mine in Ghana, GRG's biggest profit centre, to take into consideration the changing environment in the gold industry.  In addition there has been a refractory failure in one of the fluidised bed incinerators, which has reduced the throughput of that section. Whilst the incinerator remains operational the Company is looking at how to return throughput to previous levels and will update shareholders accordingly.

In order to increase the processing capacity of GRG and widen the range of the products that can be treated at the plant, the Company is planning to add an additional spirals circuit to the Fine Carbon Section which will improve the quality of the feed to the incinerator; a thickener has been delivered to site and will be erected in May 2013 to improve the gold recovery at the CIL plant; and a rotary kiln has been purchased for installation at GRG. The kiln is currently in South Africa with installation expected to be complete in the second half of FY14. 

Burkina Faso: Midas Gold SARL ('Midas')

In line with the Company's gold recovery expansion plans in Africa, Goldplat is developing a third gold recovery operation in Burkina Faso, Midas.  The development of the new gold recovery operation has been delayed for a number of reasons including changes in local environmental and gold export legislation and the shift in Midas' previously planned focus from an artisanal tailings operation similar to that at GRG, to one focussing on the recovery from products such as high grade fine carbon and mill liners from the major gold producers. Midas has re-commissioned the Environmental Study for the site in Dano which is expected to be completed at the end of August 2013 with all operating licences to be in place by the end of the year.  The Midas operation will initially be designed to treat high grade material and additional circuits to be added over time when additional recovery material is sourced and secured. 

Goldplat CEO Russell Lamming commented "Our market leading gold recovery operations in South Africa and Ghana continue to perform solidly and profitably, taking advantage of the favourable gold production environment in these regions and notwithstanding the recent fall in the gold price. With this in mind, we remain committed to the continued investment in both of these operations where we see the potential for continued strong revenue growth and stable margins.   In addition, in order to fully utilise our vast knowledge base and take advantage of our leading position in the gold recovery sector, in Africa we look forward to starting the developing our third recovery operation by the end of 2013 adding a further cash generative operation to Goldplat's portfolio of assets in Africa."

Picture 1: New tailings re-treatment carbon-in-leach ('CIL') plant at Goldplat Recovery SA

Picture 2: Second rotary kiln being installed at Goldplat Recovery SA - planned to double

the available production capacity

* * ENDS * *

For further information visit www.goldplat.com or contact:

Notes:

Goldplat plc, is an AIM-listed profitable, debt free gold producer and mine development company focused in Africa, which has a strong cash position of GBP1.95 million as at 31 Dec 2012. The Company has a solid portfolio of assets including two gold recovery operations in South Africa and Ghana, which recover precious metal from by-products of the mining process such as woodchips, fine carbon and waste grease. For the FY 2012 these operations produced circa 31,354 ounces of gold. Goldplat also has a producing gold mine in Kenya and two brownfield gold development projects in Ghana and Burkina Faso.