9th May 2014 10:11
LONDON (Alliance News) - Goldplat PLC Friday said it made an operating and net profit in its third quarter as a result of strong performance at its gold recovery operations in South Africa and Ghana.
The gold recovery and production company in Africa posted a net profit of GBP313,000 for the three months ended March 31, compared with a net loss of GBP912,000 in its first half ended December 31, 2013.
The company said it made an operating profit of GBP459,000 for the third quarter, which reduced its operating loss of GBP694,000 for its first half to GBP235,000 for the full nine months.
Friday's quarterly figures are the company's first reported three-monthly figures rather than the half yearly data it reported previously.
Goldplat said its South African gold recovery operations reversed a first-half operating loss of GBP138,000 to a nine month profit of GBP260,000, and its Ghana gold recovery operations continued to provide profitable results.
The company said it saw improvements in South Africa as it carried out various initiatives to improve efficiency and saw both an improved gold price and weaker South African rand during the period.
However, Goldplat said its Kilimapesa Gold mine in Kenya increased its operating loss to GBP448,000 for the nine-month period.
The company added that it is also working towards potential diversification into platinum group metals and has a trial project set up to start in the middle of the fourth quarter to take advantage of platinum mining by-products.
Brokerage WH Ireland said the trading update is "a positive", but has lowered its pretax profit expectations for the full-year to GBP500,000, down from GBP900,000. However, it "looks to the operational improvements (using liquid cyanide and treating lower-grade residues, whilst building new stockpile reserves) and the changes in the rand exchange rate to drive further profitability from the operations from this point."
The broker retains its Buy recommendation and 12.00 pence price target on the stock.
The company has been through a challenging period "but has reacted well to the fall in gold price and has new contracts in place with suppliers to give it a more flexible raw material pipeline," says Paul Smith, an analyst at WH Ireland.
Goldplat shares were up 2.0% to 4.59 pence Friday.
By Tom McIvor; [email protected]; @TomMcIvor1
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