A N N U A L R E P O R
A N N U A L R E P O R T
T
A N N U A L R E P O R
A N N U A L R E P O R
2 0 1 6
2 0 1 6
2 0 1 6
T
C O N T E N T
C O N T E N T
Highlights
Chairman’s Statement
Operations Report
Financial Review
The Board
Directors’ Report
Strategic Report
Independent Auditor’s Report to the Members
of Goldplat plc
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
30 June 2016
Consolidated Statement of Changes in Equity
30 June 2015
Consolidated Statement of Cash Flows
Company Statement of Financial Position
Company Statement of Changes in Equity
Company Statement of Cash Flows
Notes to the Consolidated Financial Statements
Company Information
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242375 Goldplat RA pp03-pp14 28/09/2016 16:51 Page 3
I G H L I G H T S
H I G H L I G H T S
H
Overview
• Goldplat continued to strengthen its market-leading gold recovery operations in South
Africa and Ghana, whilst making progress on the geographical diversification of these
businesses into Africa, as well as into South America
• Management approved plans for a plant expansion at Kilimapesa, with the aim of
increasing production rates and operational profitability during the 2017 financial year
• The Company produced 37,666 ounces of gold during the year (FY 2015: 30,524 ounces)
(cid:983) Significant increase in production from recovery operations to 35,661 ounces
(FY 2015: 28,246 ounces)
(cid:983) Kilimapesa mine produced 2,005 ounces (FY 2015: 2,278 ounces)
• Actual sales were 40,763 ounces (FY 2015: 24,904 ounces)
(cid:983) Gold sold for own account was 27,538 ounces (FY 2015: 21,181 ounces)
(cid:983) Gold transferred to clients was 13,225 ounces (FY 2015: 3,723 ounces)
• Multiple cost improvement initiatives and investment in infrastructure to improve
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• The management team was strengthened across all operations to align skills and
experience with Company strategy in order to build on profitability and spearhead new
development opportunities
• A new Chairman, Matthew Robinson, was identified, and is to be proposed at the
upcoming AGM
Financials
• Operating profit of £1,172,000 (2015: loss of £711,000)
• Profit before tax of £1,942,000 (2015: loss of £796,000)
• South African recovery business continued to perform well and increased its operating
profits to £1,777,000 (FY 2015: £1,090,000)
• Gold Recovery Ghana showed the strongest turnaround performance, turning an
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• Kilimapesa gold mine reported a net loss of £711,000 for the year (FY 2015: loss of
£753,000) – operational constraints are now being addressed with mining and treatment
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• Net cash position of £2,056,000 as at 30 June 2016 (2015: £630,000)
• Increase in revenue of 21% whilst cost of sales increased by 10% year on year
• Gold sold on own account increased by 30% to 27,538 ounces (FY 2015: 21,181 ounces),
which is reflected in increased Group sales
242375 Goldplat RA pp03-pp14 28/09/2016 16:51 Page 4
Chairman’s Statement
Goldplat’s portfolio of assets consists of gold recovery operations in South Africa and Ghana, a gold mine in
Kenya and exploration projects in Ghana and Burkina Faso.
It is a pleasure to be able to report an improvement in both the production and profitability of Goldplat, led by
the recovery operations. These operations not only increased profitability but also returned to positive cashflow
generation, which enabled the Group to finance significant capital projects internally and to strengthen the
balance sheet, without resorting to external capital raising. In turn this has enabled us to commence the
expansion of Kilimapesa which is needed to make the mine profitable.
In my previous Chairman’s Statement I noted that the gold price during FY 2015 averaged US $1,229/oz.
During FY 2016, the gold price averaged US $1,167/oz. During the first quarter of the current financial year
the gold price seems to have settled at above US $1,300/oz, and expert opinion expects it to strengthen
further, which would be excellent news for Goldplat.
Along with continued cost improvement initiatives, it is pleasing to note that the Group has placed renewed
focus on increasing management skills as well as international diversification. These strategies should ensure
sustainable growth in the business going forward. I believe that the turnaround strategy being implemented at
the Kilimapesa mine, as well as the planned diversification into South America and West Africa, are fundamental
to sustained growth and will stand the Group in good stead, even in tough market conditions. Goldplat is now
targeting a period of renewed growth, having re-invested in infrastructure and equipment, and strengthened its
management team, as well as its financial situation.
During the year Goldplat appointed Grant Thornton as its Nominated adviser, replacing SP Angel. VSA Capital
remains as Broker to the Company.
This is my last report as Chairman of Goldplat. Having held that role for 10 years since the flotation of the
Company and also having reached 80 years of age recently, I am retiring at the conclusion of the AGM
convened for 27 October 2016, and, subject to the approval of shareholders, handing over to Matthew
Robinson. With over 12 years’ experience in mining and resources and more than 15 years working as a
corporate adviser, Matthew has excellent credentials and I wish him and the Board of Goldplat every success
going forward. I believe that I am handing over a company in good shape and well placed for the future.
Finally, I would like to thank the management and staff for all their efforts on behalf of Goldplat over the last
twelve months.
Brian Moritz
Chairman
26 September 2016
4 GOLDPLAT PLC
242375 Goldplat RA pp03-pp14 28/09/2016 16:51 Page 5
Operations Report
In Goldplat’s 2015 annual report I said that we had laid the foundations for a turnaround of the Group’s
performance and a return to operational robustness and profitability. In FY 2016 we have laid the foundations
for growth and diversification. I am pleased to report that all the initiatives of FY 2015 as well as those for the
first half of FY 2016 have borne fruit, resulting in a marked return to profitability and a more robust balance
sheet. The Group produced 37,666 ounces of gold during the year (FY 2015: 30,524 ounces). This reflects
a marked increase in production from recovery operations to 35,661 ounces (FY 2015: 28,246 ounces),
whilst Kilimapesa produced 2,005 ounces (FY 2015: 2,278 ounces).
The Group spent £1,284,000 during the period, largely financed internally, on a comprehensive programme
to refurbish and replace obsolete plant and to acquire new infrastructure and equipment. The majority of the
projects begun in FY 2015 were completed during the first half of FY 2016.
With the completion of most of these capital programmes, the Group turned to a new set of priorities during
the second half of the year:
i.
ii.
iii.
to focus on the material procurement function, which included appointing appropriate staff across all
operations, broadening the geographic sources and diversity of materials acquired, and re-defining the
Group’s procurement contract structures to more accurately reflect its business and the prevailing economic
landscape;
to focus on the potential business opportunities we believe are available in South America. This has
included establishing relationships with local partners, appointing a team to take this initiative forward,
and the trial processing of sample material at our plant in Ghana; and
the Board approved a plan which aims to return Kilimapesa to profitability during FY 2017. We believe
that this, and potential investment opportunities currently being considered with third parties, will
significantly strengthen the Group.
A major risk identified during the previous financial year was the Group’s historical relationship with only one
refiner, Rand Refinery, which we termed the “single refiner risk”. In the year under review Goldplat identified
and subsequently formalised relationships with a number of international refiners to both process concentrates
and refine dore gold. Aurubis Refinery in Germany was used during the year to assist in processing the backlog
of concentrate stock that had resulted from difficulties experienced with Rand Refinery during FY 2015.
Areas of Strategic Focus
During 2016, strategic sourcing was identified as a critical area for the Group. A new Strategic Sourcing
Manager was appointed in South Africa and the decision was taken to move the Sourcing Manager in Ghana
to South America (with a new Ghanaian Sourcing Manager appointed). A Kenya Sourcing Officer has also
been appointed to focus solely on sourcing tailings in country.
During the year a number of exploratory visits were undertaken to South America to determine the potential for
business – initially to source material for processing through the Group’s existing recovery operations in Africa,
but also to determine the potential for establishing a recovery operation in South America. A potential Brazilian
business partner has been identified, who has extensive knowledge of, and experience within, the South
American mining sector. Goldplat expects to finalise contractual arrangements with him in early FY 2017. Initial
introductions provided by the Brazilian contact have led to a number of meetings with potential future clients,
and to the first sample batches of materials, for testing, being shipped to Ghana, where they were found to be
profitable. Logistics, regulatory hurdles, infrastructure and administrative requirements are being determined and
we have identified a new Manager to oversee our South American operations who is expected to be appointed
early in FY 2017. This Manager will determine the optimal way to take a potential South American business
forward and significant progress is expected during FY 2017.
GOLDPLAT PLC 5
242375 Goldplat RA pp03-pp14 28/09/2016 16:51 Page 6
Operations Report
continued
Kilimapesa has been loss-making during the year primarily due to plant throughput capacity constraints at its
original treatment plant. A decision was taken by the Board to increase processing capacity and production in
a staged process, with the aim of bringing Kilimapesa to operational profitability. The initial stage being to
erect a new processing facility and tailings deposition site near the Kilimapesa Hill mining operation which will
increase processing capacity to 3,000 tonnes per month. The original treatment plant will continue to be used
to process high grade artisanal tailings for as long as the existing tailings facility has capacity or until an
economically viable means of transporting tailings to the new facility is found. In order to meet the increase in
underground production, a mechanised loader has been ordered for the mines. Site preparation for the new
treatment plant was largely completed during FY 2016 and construction and installation is expected to be
completed during the first half of FY 2017.
Gold Production and Sales
The table below provides a summary of gold (and gold equivalent) production and sales for FY 2016, with
comparisons to FY 2015. Gold equivalent ounces have been included, as a significant amount of silver was
produced during the year, mainly as a result of the silver toll-treatment contract undertaken for the Rand Refinery.
During the year overall production was 37,666 ounces (FY 2015: 30,524 ounces) and actual sales were
40,763 ounces (FY 2015: 24,904 ounces). Gold sold on the Group’s own account was 27,538 ounces (FY
2015: 21,181 ounces) and that transferred to clients was 13,225 ounces (FY 2015: 3,723 ounces). The
difference between gold sold and gold produced (3,097 ounces) reflects the decrease in locked up concentrate
stocks which accumulated during the previous financial year.
During the year the Group undertook a toll processing contract with Rand Refinery which yielded 3,700 kg of
silver (1,593 of gold equivalent ounces) and 1,350 ounces of gold. Although a dispute has arisen between
the two companies regarding payments against certain invoices, Goldplat is confident that the dispute will be
resolved in FY 2017.
Goldplat Plc Consolidated
Gold Equivalent Production
Goldplat Recovery *
Gold Recovery Ghana
Kilimapesa Gold
Total
Gold Equivalent Sold
Goldplat Recovery *
Gold Recovery Ghana
Kilimapesa Gold
Total
Gold Equivalent Transferred
Goldplat Recovery*
Total
Gold Equivalent Sold and Transferred
Goldplat Recovery
Kilimapesa Gold
Gold Recovery Ghana
Total
FY 2016 Total
Equivalent
Gold
kg
FY 2016 Total
Equivalent
Gold
oz
FY 2015 Total
Equivalent
Gold
kg
FY 2015 Total
Equivalent
Gold
oz
895
214
62
1,171
516
279
62
857
411
411
927
62
279
1,268
28,778
6,883
2,005
37,666
16,575
8,964
1,999
27,538
13,225
13,225
29,800
1,999
8,964
40,763
688
190
71
949
514
80
64
658
116
116
630
64
80
774
22,135
6,111
2,278
30,524
16,530
2,578
2,073
21,181
3,723
3,723
20,253
2,073
2,578
24,904
* The gold kilograms and ounces reported for FY 2016 includes gold equivalent silver and other precious metals ounces produced
and sold in the normal course of business. The gold produced and transferred also include 1,350 oz of gold and 1,593 equivalent
gold oz of silver produced and transferred during the Rand Refinery silver sulphide tolling project. The kilograms relating to intercompany
sales between Gold Recovery Ghana and Goldplat Recovery are not reflected in the above production and sales figures.
6 GOLDPLAT PLC
242375 Goldplat RA pp03-pp14 28/09/2016 16:51 Page 7
Goldplat’s Recovery Operations
Goldplat recovers precious metals, primarily gold and silver but also platinum group metals (“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 plants, 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 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 most of the significant gold producers, an increasing number of PGM producers, and a number of
refineries requiring the processing of concentrate materials prior to final refining as bullion.
Goldplat Recovery (PTY) Limited – South Africa (“GPL”)
GPL is a well-established operation based near Johannesburg in South Africa, serving clients within South Africa
as a Responsible Gold Producer fulfilling the requirements set out by the London Bullion Market Association.
The Company’s facilities include crushing, milling, thickening, wash plants, carbon-in-leach (‘CIL’), elution,
incineration, flotation, spiralling and shotblasting.
During FY 2016 GPL produced 28,778 ounces of gold and gold equivalent (FY 2015: 22,135 ounces of
gold) of which 16,575 ounces were for its own account (FY 2015: 16,530) and 13,225 ounces were
transferred to clients’ metal accounts (FY 2015: 3,723 ounces). The difference between the total gold sold
and transferred, and the gold produced (1,022 ounces), represents the reduction during the year of the backlog
of concentrates built up during FY 2015.
Focus at GPL during FY 2016 was on completing the numerous capital projects, eliminating the single refiner
risk and further improving the sourcing function. Excellent progress was made in all of these areas of strategic
focus.
Capital projects completed during the year included: the installation of a 4-tonne elution column and its
associated infrastructure, the completion of a JORC-compliant resource statement on the tailings storage facility,
a new woodchip wash plant, a liquid cyanide storage facility, a replacement mill for the low grade circuit, a
new pumping station for the tailings re-treatment CIL circuit, a new on-site weigh bridge and a carbon
regeneration kiln. All of these projects were internally funded and are making significant improvements to costs
and/or efficiencies.
The highlight of the year was the successful installation and commissioning of the 4-tonne elution column. A
used plant consisting of three 4-tonne elution columns and the associated equipment was acquired from DRD
Gold Limited during FY 2015. The first of these columns was successfully installed and commissioned at GPL
during the six-month period ended 31 December 2015. This increased the plant’s elution throughput capacity
from approximately 1.5 tonnes per day to 8 tonnes per day. Not only has this enabled the rapid reduction of
backlog stocks, it has also provided the flexibility and capacity to source and process additional material from
within South Africa and internationally.
GOLDPLAT PLC 7
242375 Goldplat RA pp03-pp14 28/09/2016 16:51 Page 8
Operations Report
continued
During FY 2016 a Competent Person was engaged to complete a JORC-compliant Resource Statement for the
Tailings Storage Facility (“TSF”) at GPL. In January 2016 a total resource of 81,959 ounces of gold, 216,094
ounces of silver and 193,276 pounds of uranium oxide was declared. Work continues together with a local
University to determine the optimal production method, recovery process, final tailings deposition facility and
costs associated with re-processing this material. The metallurgical research work completed at the end of May
2016 showed positive results and the process of selecting a final tailings deposition site remains ongoing. Our
preferred site is a disused open-pit adjacent to GPL but regulatory, environmental and ownership issues have
delayed finalisation of the acquisition of this site. GPL has the support of the Department of the Mineral Resources
(“DMR”) for the use of this site and a decision in FY 2017 is expected, after which final economics can be
determined and the processing of the TSF can commence.
GPL entered into, and successfully completed, a silver toll recovery project for Rand Refinery to which the high
grade circuit and approximately half of the increased elution capacity was dedicated. This project proved the
flexibility gained by the installation of the increased elution capacity and allowed for the production, on a toll-
treatment basis, of significant amounts of silver. Unfortunately, a dispute has arisen between the two companies
regarding payments against certain disputed invoices. Goldplat is confident that the dispute will be resolved in
FY 2017.
During the year, GPL entered into a pre-payment agreement with Auramet International LLC (“Auramet”) to
accelerate receipt of funds due from Aurubis Refinery. This enabled GPL to bring forward payments to material
suppliers.
Finally, various senior appointments were made to strengthen operational management at GPL. These included
the creation of a new General Manager as well as the appointment of a new Strategic Sourcing Manager.
Gold Recovery Ghana Limited (“GRG”)
GRG’s gold recovery operation, which has a tax free status until December 2016, and a favourable tax rate
thereafter of 8%, is located in the free port of Tema in Ghana. Processing facilities include a spiralling section,
filter presses, an incinerator and a shotblast facility, used to recover gold from mill liners. Concentrates produced
at GRG are exported to GPL or to Aurubis Refinery in Germany and/or Rand Refinery in South Africa. Most of
the region’s major gold producers and a number of smaller operations have contracts with GRG for the
processing of their by-products which include fine carbon, fine carbon sludges, steel and rubber mill liners,
wood chips, slag, scaling and grease.
FY 2016 was a recovery year for GRG, which suffered significant setbacks due to the problems experienced
with the Rand Refinery during FY 2015. Not only had a significant backlog of material built up, which was
processed during FY 2016, but the resulting delayed payments to clients caused strain on relationships and
delays in delivery of new material. During the year, as with GPL, GRG also entered into a pre-payment
agreement with Auramet to accelerate receipt of funds due from Aurubis Refinery. This enabled GRG to bring
forward payments to material suppliers in Ghana, which in turn facilitated the receipt of new material from
these suppliers.
During FY 2016, a total of 6,883 ounces of gold were produced (FY 2015: 6,111 ounces) and 8,964
ounces of gold were sold (FY 2015: 2,578 ounces). The difference between the gold sold and gold produced
of 2,081 ounces (FY 2015: -3,533 ounces) is largely a result of the processing during the year, through Aurubis
refinery and the new elution plant in GPL, of backlog concentrates which had built up during FY 2015 due to
problems associated with the Rand Refinery.
During the year the CIL circuit was deconstructed, containerised and shipped to Kenya. The space created will
be used as a site for the planned erection of an elution plant, the timing of which is being negotiated with the
Ghanaian authorities. A shotblast facility was fabricated at GPL and installed at GRG during the year and is
being used to extract gold from mill liners. Four filter presses were installed during the year to improve the
efficiency of the spiral circuits.
8 GOLDPLAT PLC
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The renewal of the Gold and Environmental Protection Agency licences are in progress. The renewals are taking
longer than anticipated but we are working closely with the relevant authorities and expect to conclude the
process during the first half of FY 2017.
Goldplat’s Mining And Exploration
Kilimapesa Gold (Pty) Limited (“Kilimapesa”)
Kilimapesa is a producing gold mine located in South Western Kenya. The mine is located in the historically
productive Migori Archaean Greenstone Belt and has a total resource of 8,715,291 tonnes at 2.40 g/t of
gold for a total of 671,446 ounces of gold at 1 g/t.
During the year, Kilimapesa Hill remained the primary source of production with additional gold being recovered
from artisanal material and limited amounts from exploration work on the Teng-Teng mine. Gold production for
the year was 2,005 ounces (FY 2015: 2,278 ounces) with 1,999 ounces being sold during the year (FY
2015: 2,073 ounces). The slight decrease in production was primarily due to a reduction in artisanal tailings
sourced during the year.
Focus at Kilimapesa Hill during the year was on re-opening the Adit D and once complete activities focussed
on understanding geological structures and value trends, developing mining blocks through on-reef drives and
raises between the levels, and establishing second outlets. All high grade material mined was delivered to the
processing plant for treatment and low grade material was stockpiled for later processing during commissioning
of the new plant during FY 2017.
Following dewatering and equipping of the previously abandoned and flooded Teng-Teng shaft during FY
2015, the underground workings were rehabilitated and re-equipped in preparation for further on-reef
exploration work. Reef drives on the lowest level opened up new ground and raises were developed to delineate
potential mining blocks. A second outlet was developed for safety purposes as well as to facilitate rock and
material handling during the decline shaft deepening planned for FY 2017.
To gain a better understanding of the resource, and in preparation for the planned increase in underground
production rates, two part-time geologists have been employed. They will also guide the exploration
programmes at Teng-Teng and other sites, and maintain compliance with regulatory requirements.
During FY 2016 successful trial processing of tailings through the gravity concentrator were concluded and the
concentrator was moved to and erected at the new plant site for commissioning early in FY 2017. This
concentrator will be utilised for processing low grade artisanal tailings.
In preparation for the construction of a new processing plant and tailings facility, the Environmental Impact
Assessment was approved and all agreements regarding land usage were concluded. With design and
construction drawings and layouts completed, work commenced on the new plant project during 2016. A CIL
plant, which was de-commissioned at Goldplat’s GRG recovery operation during FY 2015 was de-constructed
and shipped to Kilimapesa for re-erection during FY 2017. Two new second-hand ball mills were acquired in
South Africa and one of these was shipped to Kilimapesa. Fabrication of infrastructure for the new plant is
taking place at GPL and shipments to Kilimapesa began during the year.
Goldplat plans to have the new plant in production by the end of the first half of FY 2017 and for Kilimapesa
to become profitable at an operational level during FY 2017. To date the project has been financed within the
Group, but alternative ways to re-finance this capital investment are being considered.
No capital was spent on exploration during the year under review, other than on Teng-Teng, despite the
significant potential known to exist within the greater exploration permit.
GOLDPLAT PLC 9
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Operations Report
continued
On 27 May 2016, a new mining act (the Kenya Mining Act) came into force in Kenya. A new Cabinet
Secretary for Mining was appointed and a good relationship exists between Goldplat management and the
Ministry of Mining. In addition to this, relationships with the Narok County Governor have been strengthened
and new relationships developed with the Governor of the adjacent Migori County, which has significant
potential for gold exploration, mining, sourcing and processing of tailings. Community relations at Kilimapesa
remain sound and a new collective bargaining agreement and wage negotiations were concluded during
the year.
Other Exploration Projects
Goldplat maintains interests in two greenfield exploration projects, which have a total JORC compliant mineral
resource of 3,940,000 tonnes at 2.05g/t for approximately 259,000 ounces of gold. These include the 29
sq. km Anumso Gold project in the Ashanti region in Ghana as well as the 246 sq. km Nyieme project in the
Birimian Greenstone Belt in Southern Burkina Faso. Due to prevailing market conditions, no further exploration
work was conducted on either of these two projects during the FY 2016.
Discussions regarding potential corporate deals involving these assets continued during the year with an earn-
in option agreement over Anumso signed after the year end with a Canadian listed company Ashanti Gold
Corp (“Ashanti”); Ashanti has the option for a US$3 million earn-in to Goldplat’s 90% interest in Anumso. This
agreement will allow Goldplat to retain prospective exposure to Anumso whilst minimising capital commitments.
Outlook
I am confident that Goldplat is well positioned for growth and sustained financial profitability, with the recovery
operations back on track and profitable, plans in place to return Kilimapesa to profitability during the FY 2017,
and exciting growth prospects in the pipeline.
Discussions regarding the dispute with Rand Refinery continue between GPL and Rand Refinery, and an
independent joint team has been appointed to manage a process of investigation to try to resolve this issue
amicably. During the course of the investigation, Rand Refinery has agreed to deal with Goldplat in a “business
as usual” manner regarding refining and payments. Good progress is being made regarding the future
processing of the TSF both in terms of the University work on potential recovery processes, as well as with the
DMR on access to the open pit for final tailings deposition.
We have begun sending materials from GPL to GRG for the erection of a 4-tonne elution plant on the site of
the old CIL plant. Good progress is being made with the sourcing of material elsewhere in West Africa. The
gold license has been renewed in the first few months of FY 2017 and the earn-in option agreement over
Anumso with Ashanti Gold Corp., (formerly Gulf Shore Resources) has been signed.
Subsequent to the year end, a contract was agreed with our new South American partner, a new South
American Manager was appointed, a Strategic Sourcing Manager was moved to Brazil and we conducted
further visits to the region to establish relationships, scope contracts and determine the optimal way to grow a
business in the region.
The new plant at Kilimapesa is progressing well, with VAT exemptions being granted for all project plant and
equipment. Containers have been released through port customs, the gravity concentrator has been
commissioned, and the borrow pit for tailings completed. All civil and construction work on-site is progressing
well. Fabrication of the infrastructure is progressing well at GPL and is being shipped to Kenya regularly. An
exploratory trip to the adjacent Migori county and meetings with the Governor identified good opportunities
for the procurement of tailings as well as the potential to mine and process gold in the county. These opportunities
will be followed up on during FY 2017.
An earn-in option agreement was signed in September 2016 with Ashanti Gold Corp, a Canadian listed
company, whereby Ashanti has the option to earn up to 75% of Goldplat’s 90% interest in the Anumso project
in Ghana by spending an aggregate of US$ 3 million.
10 GOLDPLAT PLC
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Conclusion
I would like to take this opportunity to thank our Goldplat employees, advisors, fellow directors and shareholders
for their support as we successfully restored the Group to profitability during FY 2016. I look forward to working
with all of you as we embark upon a period of growth and diversification during FY 2017. I would also like
to take this opportunity to thank Brian Moritz, our Non-Executive Chairman, for his Chairmanship, guidance,
loyalty and unwavering support for the Company since its listing and to wish Brian success, health and happiness
going forward. I would like to welcome Matthew Robinson as our new Non-Executive Chairman, (subject to
the approval of shareholders), assure him of the support of the Board and I look forward to a successful
relationship and prosperous period for Goldplat under his Chairmanship.
Gerard Kisbey-Green
CEO
26 September 2016
GOLDPLAT PLC 11
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Financial Review
The Group reports net cash resources of £2,056,000 as at 30 June 2016 (FY 2015: £630,000), which
reflects the improvement in operating activities for both the GPL and GRG recovery operations. The Kilimapesa
mine, where we are in the process of increasing plant capacity, continued to trade at a loss, although some
improvement was seen towards the latter part of the financial year.
The Group’s operating results for the year under review reflects an increase in revenue of 21% while the cost
of sales increased by 10% year on year. Administrative expenses increased by 9% to £1,836,000 (FY 2015:
£1,679,000).
The Group’s gross profit increased from £968,000 to £3,008,000, an improvement of 211% year-on-year.
Results from operating activities for the year under review improved to a profit of £1,172,000 (FY 2015: Loss
of £711,000).
The increased revenues were driven by the following factors;
The 4-tonne elution plant, which was successfully commissioned at GPL during the first half of the year, enabled
both GPL and GRG recovery operations to process the substantial gold inventories held as at 30 June 2015.
In addition, a steady flow of gold bearing raw materials was re-established as suppliers gained confidence in
our service delivery. This improvement in procured gold bearing material is particularly pleasing as during the
previous year a number of our suppliers had held back deliveries of gold bearing material in response to the
continuous delays at Rand Refinery in processing our concentrates.
Gold sold on own account increased by 30% to 27,538 ounces (FY 2015: 21,181 ounces) which is reflected
in increased Group sales.
The average dollar price for gold for the year was lower at US $1,167 per ounce (FY 2015: US $1,229 per
ounce). However, the deterioration of our operating currencies against the US Dollar offset the lower gold price
per ounce, and the Groups’ revenues in local currency improved year on year.
The operating currencies for the Group are South African Rand (ZAR) in South Africa, Ghanaian Cedi (GHS)
in Ghana and Kenyan Shilling (KES) in Kenya. The average exchange rate used in the conversion of operating
currencies in the Statement of Profit or Loss and Other Comprehensive Income deteriorated against the Pound
Sterling during the period under review. Due to the deterioration of the Pound Sterling, during the week before
the Group’s year-end at 30 June, the exchange rate used to convert the operating currencies into Sterling in the
Statement of Financial Position, improved.
The volatility of the operating currencies against the Pound Sterling and the general deterioration of the operating
currencies against the US Dollar, resulted in an increase in net finance income to £770,000 (FY 2015:
£36,000). The improvement of the operating currencies against the Pound Sterling also resulted in a positive
unrealised exchange translation of £489,000 (FY 2015: £860,000 negative).
GPL continued to perform well and increased its operating profits to £2,111,000 (FY 2015: £1,090,000).
Substantial cost savings were made by reducing labour costs, but were offset by the new senior positions
created at GPL. Additional cost savings were achieved, especially at GPL, where all operating cost components
were reviewed in detail.
GRG showed the strongest turnaround performance, turning an operational loss in FY 2015 of £641,000 into
an operational profit of £437,000 for the year ended 30 June 2016. In addition to the Company being
awarded a substantial clean-up contract at the AngloGold Ashanti (“AGA”) Obuasi Gold Mine, the backlog
inventories were cleared and raw material procurement volumes improved.
The Kilimapesa gold mine’s performance during the first six months of this financial year was below expectations
but improved during the second six months of the financial year. Operating losses before finance costs at the
mine increased to £624,000 (FY 2015: loss of £389,000). Increased processing capacity will be installed
during the first half of the 2017 financial year and is expected to return the mine to profitability.
12 GOLDPLAT PLC
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The Group’s capital expenditure for the year amounted to £1,284,000 (FY 2015: £909,000) of which
£460,000 was expended on the completion of the elution plant at GPL and £355,000 on the purchase of
equipment for Kilimapesa’s new production plant.
At GPL £58,000 (FY 2015: £214,000) was spent on the new wash plant and re-commissioning the CIL circuit
and both started producing in October 2015. During the period, £128,000 was invested in strategic spares
for the CIL Circuits. The balance of the capital spent on plant and equipment was used to upgrade capacity in
our tailings circuit (£32,500), to improve conditions in our by-product processing plant with a mist spray system
(£24,000), and to install our own weighbridge (£34,000). Other expenditures include £80,000 on production
vehicles.
At GRG £97,000 was invested in a shot blast facility.
At Kilimapesa £110,000 capital was expended in the development of the mine. A further £451,000 was
expended on the gold plant, of which most related to the construction of a new plant, which will be
commissioned in the third quarter of FY 2017.
During the period GPL entered into a purchase contract and bill of sale agreement with Auramet, whereby
Auramet purchase and pre-pay material on route to the refinery, using the final results from the refiner less refining
charges and an interest cost of 3 month LIBOR plus a 5% margin. The balance settled by Aurumet amounted to
£1,107,000 and is included in Trade and Other Payables as Amounts received in advance.
GPL – South Africa
The South African subsidiary reported a net profit of £1,777,000 (FY 2015: £965,000).
The impact of falling US Dollar denominated gold price was mitigated by changes in the value of the South
African Rand. This resulted in record prices being obtained in South African Rand terms.
Revenues of £15,223,000 (FY 2015: £14,001,000) were achieved and cost of sales amounted to
£12,504,000 (FY 2015: £12,346,000). The value of the gold equivalent ounces produced from the silver
sulphide toll-treatment project was not recognised as revenue, but only the fees received for processing, of
which approximately £679,000 is being disputed by Rand Refinery. Notwithstanding this, substantial savings
were made by constant review of all costs.
The completion of the elution plant in the first half of the year allowed the Company to not only process all the
backlog of gold inventories but also to assist GRG in processing their material that could not be delivered to
Rand Refinery.
GRG – Ghana
The Ghana Gold Recovery operation has had a strong performance compared to the previous year. The current
zero tax rate ceases in December 2016 after which the Company will be subject to a favourable tax rate
of 8%.
GRG reported a profit from operating activities of £437,000 compared to a loss from operating activities of
£641,000 in FY 2015. The increase in profitability is attributable to the clearing of the backlog of gold
inventories held at 30 June 2015, combined with a steady flow of material from our traditional suppliers and
a large clean-up contract awarded by AGA Obuasi.
Kilimapesa – Kenya
The Kilimapesa gold mine in Kenya reported a net loss of £711,000 (FY 2015: loss of £753,000) for the
year under review.
GOLDPLAT PLC 13
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Financial Review
continued
The mine remains processing-constrained. During FY 2015 a decision was made to increase the plant capacity
sufficiently with the aim of returning the mine to profitability. During the previous financial year two parcels of
land were secured on which we will erect a new processing plant and a tailings storage facility.
The decommissioned Ghana CIL circuit was sold to Kilimapesa as a first step to increase capacity. In addition,
one mill purchased from GPL will be shipped to the mine during the first quarter of the 2017 financial year.
Additional leaching capacity will be provided as production increases to a total capacity of circa 6,000 tonnes
per month. A new crushing section will be installed and commissioned during January 2017.
At the time of this report the expansion has been funded from internally generated funds but we continue to
explore possible joint ventures and other funding options.
Contingencies
We are pleased to report that the VAT assessment in the amount of £147,762 raised by HM Revenue and
Customs, as reported in the previous financial year, has been withdrawn, and regular repayments of input VAT
are once again being received.
We have made satisfactory progress in resolving issues raised in the preliminary enquiry into the tax affairs of
Kilimapesa Gold Pty Limited and the directors remains confident of a favourable outcome in this matter.
A process of investigation has been agreed to with Rand Refinery regarding the dispute, which relates to the
silver recovery toll treatment agreement. Rand Refinery has withheld payment of ZAR 13.5 million (approximately
£679,000 at 30 June 2016) pending the outcome of this investigation.
I Visagie
Executive Director
26 September 2016
14 GOLDPLAT PLC
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The Board
BRIAN MORITZ
Non-Executive Chairman
Brian is a Chartered Accountant and former Senior Partner of Grant Thornton, London. He formed Grant
Thornton’s Capital Markets Team, which floated over 100 companies on AIM under his chairmanship. In 1995
he retired to concentrate on bringing new companies to the market as a director. He focuses on mining
companies, primarily in Africa, and was formerly Chairman of African Platinum PLC and Metal Bulletin PLC as
well as currently being Chairman of several junior mining companies. Brian is a member of the audit and
remuneration committees of the Company and is responsible for corporate governance issues and compliance
with AIM.
GERARD KISBEY-GREEN
Chief Executive Officer
Gerard has built an expansive career in the mining and related financial industry, spanning over 28 years.
After graduating as a Mining Engineer in South Africa in 1987, he gained extensive experience working in
various management positions for a number of the larger South African mining companies, including Rand
Mines Group and the gold division of Anglo American Corporation. During this time he worked on gold,
platinum and coal mines primarily in South Africa and also in Germany and Australia.
Gerard subsequently spent 17 years in the financial markets, including five years as a mining equity analyst
and 12 years in mining corporate finance. He has worked in South Africa and the UK for banks including
JPMorganChase, Investec and Standard Bank. Gerard has extensive experience in IPOs, capital raisings, M&A
transactions and deals covering a great diversity of commodities and geographic locations. He also has
experience in nomad and broker and advisory roles. He has worked extensively in Africa, particularly South
Africa, Western and Eastern Europe, the Middle East, Far East, Central Asia and North America. After returning
to South Africa as a Managing Director with Standard Bank in 2009, Gerard left the banking industry and
joined Peterstow Aquapower, a mining technology development company, as CEO in 2011, before accepting
a position in 2012 with Aurigin Resources Inc., a privately owned Toronto-based gold exploration company
with assets in Ethiopia and Tanzania, as President and CEO.
IAN VISAGIE
Finance Director
Ian is a chartered accountant who has worked in senior positions in the mining industry since 1990. A South
African citizen he trained as a Chartered Accountant with KPMG in its Pretoria office. Having gained post-
qualifying experience with KPMG he moved into a mining environment in 1990 when he joined Consolidated
Modderfontein Mines Limited as Financial Manager, and Goldplat Recovery in March 1997 as Financial
Director. Ian has been a Director of Goldplat plc since its admission to AIM.
HANSIE VAN VREDEN
Chief Operating Officer
An experienced metallurgist with over 15 years in the mining industry. Prior to joining Goldplat he worked at
several AGA operations in South Africa, including Savuka, Mponeng and Kopanang Gold Plants, and Sunrise
Dam Gold Mine in Western Australia. During his time as Plant Manager and Production Metallurgist at
Kopanang Gold Plant he successfully converted the operation from reef to waste rock and implemented various
initiatives to increase production capabilities and improve recoveries. In addition, at three other Anglo processing
plants he gained certification and re-certification of the International Cyanide Management Institute (ICMI).
During his time at Anglo (1999-2013) he was also responsible for health and safety, production planning and
execution, projects, metallurgical accounting, security and operational staff. He holds a Bachelors degree in
Engineering (Chemical: Mineral Processing) from the University of Stellenbosch.
GOLDPLAT PLC 15
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The Board
continued
NIGEL WYATT
Non-Executive Director
Nigel is a graduate of the Camborne School of Mines. He has held senior positions in a number of mining
and engineering companies, primarily in Southern Africa. He was the group marketing director of a De Beers
group subsidiary supplying specialised materials, engineering and technology to the industrial and mining
sectors, and commercial director of Dunlop Industrial Products (Pty) Limited, South Africa. In 2006, he was
appointed as CEO of Chromex Mining Plc, an AIM company mining chrome in South Africa. After listing the
company and bringing the company to early production, he resigned in order to seek and develop other early
stage mining projects.
16 GOLDPLAT PLC
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Directors’ Report
The Directors present their report together with the audited financial statements of the Group for the year ended
30 June 2016.
A review of the business and risks (including those relating to financial instruments) and uncertainties is included
in the Strategic Report.
Results
The Group reports a pre-tax profit of £1,998,000 (2015: loss £796,000) and an after tax profit of
£1,464,000 (2015: loss £892,000).
Major events after the balance sheet date
The following events occurred after the balance sheet date and are further discussed in note 37 to these financial
statements:
•
Completion of Anumso Gold Project Earn-in Option Agreement.
Dividends
No dividend is proposed in respect of the year ended 30 June 2016 (2015: £nil per share).
Political donations
There were no political donations during the year (2015: £Nil).
Corporate governance statement
The Board has established an audit committee and a remuneration committee with formally delegated duties
and responsibilities.
During the year the audit committee consisted of B M Moritz and N Wyatt. The audit committee has
responsibility for ensuring that the financial performance, position and prospects of the Company are properly
monitored and reported on, for meeting with the auditor and discussing their reports on the accounts and the
Company’s financial controls and for recommending the appointment of auditors.
The remuneration and terms and conditions of appointment of non-executive directors are set by the Board. No
Director may participate in any discussions or decisions regarding his own remuneration.
Directors
The following Directors served during the period:
G Kisbey-Green
B M Moritz
I Visagie
N G Wyatt
J H Van Vreden
(Chief Executive Officer)
(Non-executive Chairman)
(Finance Director)
(Non-executive Director)
(Chief Operating Officer)
GOLDPLAT PLC 17
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Directors’ Report
continued
Directors’ interests
The beneficial interests of the Directors holding office on 30 June 2016 in the issued share capital of the
Company were as follows:
30 June 2016
30 June 2015
Number of
ordinary
shares
of 1p each
Percentage
of issued
share capital
Number of
ordinary
shares
of 1p each
Percentage
of issued
share capital
B M Moritz
3,450,000
2.06%
2,550,000
1.51%
No other Director had a beneficial interest in the share capital of the Company, and there has been no change
in such interests since 30 June 2016.
Directors’ remuneration and service contracts
Details of directors’ emoluments including share based payments are disclosed in note 10 to these financial
statements.
G Kisbey-Green
B M Moritz
I Visagie
N G Wyatt
J H Van Vreden
Salaries
£‘000
175
–
130
–
92
397
Fees
£‘000
–
40
–
25
–
65
Other
£‘000
52
–
–
–
25
77
Total
£‘000
227
40
130
25
117
539
During the year 8,000,000 share options were issued to G Kisbey-Green and 3,000,000 to J H Van Vreden.
Further details in respect of options granted are disclosed in note 27 to these financial statements.
Directors’ indemnities
The Company maintains Directors’ and officers’ liability insurance providing appropriate cover for any legal
action brought against its Directors and/or officers.
Going concern
The Directors adopt the going concern basis in preparing these financial statements. This is further explained in
note 2 to the financial statements.
Employees
The Directors have a participative management style with frequent direct contact between junior and senior
employees. A two-way flow of information and feedback is maintained through formal and informal meetings
covering Group performance. The Group is an Equal Employment Opportunity employer.
Statement of Directors’ responsibilities
The Directors are responsible for preparing the directors’ report, the strategic report and the financial statements
in accordance with applicable law and regulations.
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Company law requires the Directors to prepare financial statements for each financial year. Under that law the
Directors have elected to prepare the financial statements in accordance with International Financial Reporting
Standards (“IFRSs”) as adopted by the European Union. The financial statements are required by law to give a
true and fair view of the state of affairs of the Company and the Group and of the Group’s profit or loss for that
year.
In preparing these financial statements, the Directors are required to:
•
•
•
•
select suitable accounting policies and then apply them consistently;
make judgements and estimates that are reasonable and prudent;
state whether the financial statements comply with IFRS as adopted by the European Union; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
Group and Company will continue in business
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the
Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information
included on the Company’s website. Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in other jurisdictions.
Statement of disclosure to auditor
So far as the Directors are aware:
•
•
there is no relevant audit information of which the Group’s and Company’s auditor is unaware; and
all the Directors have taken steps that they ought to have taken to make themselves aware of any relevant
audit information and to establish that the auditors are aware of that information.
Auditor
A resolution to re-appoint Moore Stephens LLP as auditor will be proposed at the Annual General Meeting.
By order of the Board
B Moritz
Director
26 September 2016
GOLDPLAT PLC 19
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Strategic Report
The directors present their Strategic Report for the year ended 30 June 2016.
The Strategic Report is a statutory requirement under the Companies Act 2006 (Strategic Report and Directors’
Report) Regulations 2013 and is intended to provide fair and balanced information that enables the directors
to be satisfied that they have complied with s172 of the Companies Act 2006 which sets out the directors’
duty to promote the success of the Company.
Main Objects and Future Development
The Group’s main object is to produce gold from the recovery of by-products discarded by the primary producers
and to produce gold as a primary producer itself. Strategically by developing and growing the mature recovery
businesses, the Group will be in a position to maintain healthier cash levels to cover some costs as it expands
its primary producer goals. Unlike Greenfields exploration companies the Group should be able to fund, if
required, exploration or alternatively acquire mining operations as they become available without diluting
shareholders continuously by raising capital to fund general and administrative expenses.
By taking a phased approach and organically growing the recovery and mining divisions of the Group it is
possible to develop the Group into a junior mining Company.
The outlook for the 2017 year will be to focus our marketing efforts and broadening the geographic and
product diversity of materials sourced to expand and grow our recovery businesses. Plant capacity at the
Groups’ Kilimapesa mine will be increased not only to make this mine profitable but also pave the way for
further expansions, if such an opportunity presents itself.
Principal activity
The Group’s operating businesses are based in Africa and comprises the production of gold and other precious
metals, by processing by-products of the mining industry as well as mining itself. Marketing focus is not only
directed at the African continent, but also other international gold producing countries.
The Group’s primary operating base is situated near Benoni on the East Rand gold field in South Africa. As
well as producing gold, silver and platinum group metals from the by-products of the mining industry, support
for other Group operating subsidiary companies is provided from Benoni. This business is 74% owned in
compliance with South African Black Economic Empowerment legislation.
The Group’s Ghana operation based in the Freeport of Tema is in the process of being developed into a
processing hub to service gold producing clients internationally and fully utilise the advantages of the low tax
rates in the Freezone.
The Kilimapesa mine in Kenya, is being expanded by further development of the ore body and the erection of
a larger CIL (Carbon-in-Leach) and crushing section to return the mine to profitability.
The Group’s exploration assets in Ghana and Burkina Faso, which has not yet been developed, will be
maintained in good order pending future opportunities that may arise.
Review of business and financial performance
Information on the financial position of the Group is set out in the Financial Review and the annexed financial
statements.
Details of the operations are set out in the Operations Report.
The Board regularly reviews the risks to which the Group is exposed and ensures through its meetings and
regular reporting that these risks are minimised as far as possible.
20 GOLDPLAT PLC
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Risks and uncertainties
The principal risks and uncertainties facing the Group at this stage in its development are:
Purchasing risk
The main business of the Group, the recovery of gold from by-products of the mining industry, requires such by-
products to be available for purchase by the Group at prices which allow profitable processing by the Group.
As mining companies become more efficient both the volumes of available materials and their precious metal
content may be reduced.
The Group mitigates this risk by its flexibility in the types of material it processes. It has also been in the forefront
of producing “Responsible Gold” which gives it a competitive advantage over its competitors.
This risk is further mitigated by expanding the Group’s sourcing efforts from African based producers to producers
internationally.
Price risk
The gold and precious metals produced by the Group are sold at world spot prices which may fluctuate
substantially according to supply and demand, and are not directly related to the cost of production.
The Group seeks to mitigate this risk in part by adjusting the price it pays for materials for processing.
Exploration Risk
The Group’s business includes mineral exploration and evaluation which are speculative activities and there is
no certainty that the Group will be successful in the definition of economic mineral deposits, or that it will
proceed to the development of any of its projects or otherwise realise their value.
The Group aims to mitigate this risk when evaluating new business opportunities by targeting areas of potential
where there is at least some historical drilling or geological data available. It should be noted that exploration
is not the main focus of the Group’s activities and that exploration, if required, can be conducted based on the
Group’s free cash flow.
Resource Risk
All mineral projects have risk associated with defined grade and continuity. Mineral reserves and resources will
be calculated by the Group in accordance with accepted industry standards and codes but are always subject
to uncertainties in the underlying assumptions which include geological projection and commodity price
assumptions.
Development Risk
Delays in permitting, financing and commissioning a project may result in delays to the Group meeting
production targets. Changes in commodity prices can affect the economic viability of mining projects and affect
decisions on continuing exploration activity.
This risk will be mitigated to some extent by only expanding into countries that pose a low country risk as
perceived at the time.
Mining and Processing Technical Risk
Notwithstanding the completion of metallurgical testwork, test mining and pilot studies indicating the technical
viability of a mining operation, variations in mineralogy, mineral continuity, ground stability, ground water
conditions and other geological conditions may still render a mining and processing operation economically
or technically non-viable.
The Group has a small team of mining professionals experienced in geological evaluation, exploration, financing
and development of mining projects. To mitigate development risk the Group supplements this from time to time
with engagement of external expert consultants and contractors.
GOLDPLAT PLC 21
242375 Goldplat RA pp15-pp25 28/09/2016 16:53 Page 22
Strategic Report
continued
Environmental Risk
Exploration and development of a project can be adversely affected by environmental legislation and the
unforeseen results of environmental studies carried out during evaluation of a project. Once a project is in
production unforeseen events can give rise to environmental liabilities.
The Group is responsible for rehabilitation at all its operations.
Financing and Liquidity Risk
The Company may need to finance expansion through the equity markets and in future to obtain finance for
project development. There is no certainty such funds will be available when needed.
This risk is mitigated for Goldplat in so far as its primary activities are cash generative.
Political Risk
All countries carry political risk that can lead to interruption of activity. Politically stable countries can have
enhanced environmental and social permitting risks, risks of strikes and changes to taxation whereas less
developed countries can have in addition, risks associated with changes to the legal framework, civil unrest
and government expropriation of assets.
Partner Risk
In South Africa, Black Economic Empowerment legislation requires historically disadvantaged South Africans to
have a minimum 26% interest in all mining and exploration projects. The Group can be adversely affected if
joint venture partners are unable or unwilling to perform their obligations or fund their share of future
developments. It is possible that other countries where the Group operates may introduce similar legislation.
Financial Instruments
Details of risks associated with the Group’s financial instruments are given in Note 32 to the financial statements.
The Company does not utilise any complex financial instruments.
Internal Controls and Risk Management
The directors are responsible for the Group’s system of internal financial control. Although no system of internal
financial control can provide absolute assurance against material misstatement or loss, the Group’s system is
designed to provide reasonable assurance that problems are identified on a timely basis and dealt with
appropriately.
In carrying out their responsibilities the directors have put in place a framework of controls to ensure as far as
possible that ongoing financial performance is monitored in a timely manner, that corrective action is taken and
that risk is identified as early as practically possible, and they have reviewed the effectiveness of internal financial
control.
The Board, subject to delegated authority, reviews regulatory issues, capital investment, property sales and
purchases, additional borrowing facilities, guarantees and insurance arrangements.
Bribery Risk
The Group has adopted an anti-corruption policy and whistle blowing policy under the UK Bribery Act 2010.
Notwithstanding this, the Company may be held liable for offences under that Act committed by its employees
or subcontractors whether or not the Company or the Directors have knowledge of the commission of such
offences.
22 GOLDPLAT PLC
242375 Goldplat RA pp15-pp25 28/09/2016 16:53 Page 23
Forward Looking Statements
This Annual Report contains certain forward looking statements that have been made by the directors in good
faith based on the information available at the time of the approval of the Annual Report. By their nature, such
forward looking statements involve risks and uncertainties because they relate to events and depend on
circumstances that will or may occur in the future. Actual results may differ from those expressed in such
statements.
Ian Visagie
Director
26 September 2016
GOLDPLAT PLC 23
242375 Goldplat RA pp15-pp25 28/09/2016 16:53 Page 24
Independent Auditor’s Report to The Members of Goldplat Plc
We have audited the financial statements of Goldplat Plc for the year ended 30 June 2016 which comprise
the consolidated statement of profit or loss and other comprehensive income, the consolidated and company
statements of financial position, the consolidated and company statements of changes in equity, the consolidated
and company statements of cash flows and the related notes. The financial reporting framework that has been
applied in their preparation is applicable law and International Financial Reporting Standards (IFRS) as adopted
by the European Union and, as regards the parent company financial statements, as applied in accordance
with the provisions of the Companies Act 2006.
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of
the Companies Act 2006. Our audit work has been undertaken so that we might state to the, company’s
members those matters we are required to state to them in an auditors’ report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company
and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
As explained more fully in the statement of directors’ responsibilities, the directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view. Our
responsibility is to audit and express an opinion on the financial statements in accordance with applicable law
and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing
Practices Board's (APBs) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the Financial Reporting Council’s
web-site at www.frc.org.uk/auditscopeukprivate.
Opinion on financial statements
In our opinion the financial statements:
•
•
•
•
give a true and fair view of the state of the group's and the parent company's affairs as at 30 June 2016
and of the group's profit for the year then ended;
the group financial statements have been properly prepared in accordance with IFRS’s as adopted by the
European Union;
the parent company financial statements have been properly prepared in accordance with IFRS as adopted
by the European Union and as applied in accordance with the Companies Act 2006; and
the financial statements have been prepared in accordance with the requirements of the Companies Act
2006
Opinion on other matters prescribed by the Companies Act 2006
In our opinion, the information given in the strategic report and directors' report for the financial year for which
the financial statements are prepared is consistent with the financial statements.
24 GOLDPLAT PLC
242375 Goldplat RA pp15-pp25 28/09/2016 16:53 Page 25
Matters on which we are required to report by exception
We have nothing to report in respect of the following where, under the Companies Act 2006 we are required
to report to you if, in our opinion:
•
•
•
•
adequate accounting records have not been kept by the parent company, or returns adequate for our
audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Gareth Jones (Senior Statutory Auditor)
for and on behalf of MOORE STEPHENS LLP
Chartered Accountants and Statutory Auditor
London
27 September 2016
GOLDPLAT PLC 25
242375 Goldplat RA pp26-pp33 28/09/2016 16:55 Page 26
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
for the year ended 30 June 2016
Continuing operations
Revenue
Cost of sales
Gross profit
Administrative expenses
Results from operating activities
Finance income
Finance costs
Net finance income
Results from operating activities after finance income
Write off development cost of discontinued
South African mining operation
Profit/loss before tax
Taxation
Profit/loss for the year
Profit/loss attributable to:
Owners of the Company
Non-controlling interests
Profit/loss for the year
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Exchange translation
Other comprehensive income/expense for the year
Total comprehensive income/expense for the year
Total comprehensive income attributable to:
Owners of the Company
Non-controlling interests
Total comprehensive income/expense for the year
Earnings per share – continuing operations
Basic earnings per share (pence)
Diluted earnings per share (pence)
Notes
7
11
12
13
24
24
2016
£’000
2015
£’000
20,185
(17,177)
3,008
(1,836)
1,172
809
(39)
770
1,942
–
1,942
(534)
1,408
946
462
1,408
489
489
1,897
1,435
462
1,897
0.84
0.76
16,628
(15,660)
968
(1,679)
(711)
843
(807)
36
(675)
(121)
(796)
(96)
(892)
(1,143)
251
(892)
(860)
(860)
(1,752)
(2,003)
251
(1,752)
(0.53)
n/a
The notes on pages 34 to 64 are an integral part of these consolidated financial statements.
26 GOLDPLAT PLC
242375 Goldplat RA pp26-pp33 28/09/2016 16:55 Page 27
Consolidated Statement of Financial Position
as at 30 June 2016
Assets
Property, plant and equipment
Intangible assets
Proceeds from sale of shares in subsidiary
Non-current cash deposits
Non-current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Current assets
Total assets
Equity
Share capital
Share premium
Exchange reserve
Retained earnings
Equity attributable to owners of the Company
Non-controlling interests
Total equity
Liabilities
Obligations under finance leases
Interest bearing borrowings
Provisions
Deferred tax liabilities
Non-current liabilities
Bank overdraft
Obligations under finance leases
Interest bearing borrowings
Taxation
Trade and other payables
Current liabilities
Total liabilities
Total equity and liabilities
Notes
14
15
16
17
20
21
22
23
23
25
26
28
29
22
25
26
30
2016
£’000
5,404
9,726
1,271
160
16,561
7,747
6,255
2,148
16,150
32,711
1,675
11,441
(6,218)
10,953
17,851
2,246
20,097
157
–
383
510
1,050
92
129
55
153
11,135
11,564
12,614
32,711
2015
£’000
4,449
9,169
1,357
233
15,208
7,727
3,305
630
11,662
26,870
1,685
11,498
(6,707)
9,868
16,344
1,893
18,237
199
56
121
459
835
–
120
104
18
7,556
7,798
8,633
26,870
The financial statements of Goldplat plc, company number 05340664, were approved by the Board of
Directors and authorised for issue on 26 September 2016. They were signed on its behalf by:
Brian Moritz
Director
The notes on pages 34 to 64 are an integral part of these consolidated financial statements.
GOLDPLAT PLC 27
242375 Goldplat RA pp26-pp33 28/09/2016 16:55 Page 28
Consolidated Statement of Changes in Equity
as at 30 June 2016
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28 GOLDPLAT PLC
242375 Goldplat RA pp26-pp33 28/09/2016 16:55 Page 29
Consolidated Statement of Changes in Equity
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t
a
o
T
y
n
a
p
m
o
C
e
h
t
f
o
5
1
0
2
e
n
u
J
0
3
t
a
e
c
n
a
a
B
l
d
n
e
d
i
v
i
d
y
r
i
a
d
i
s
b
u
s
n
i
s
t
s
e
r
e
n
t
i
g
n
i
l
l
o
r
t
n
o
c
n
o
N
-
The notes on pages 34 to 64 are an integral part of these consolidated financial statements.
GOLDPLAT PLC 29
242375 Goldplat RA pp26-pp33 28/09/2016 16:55 Page 30
Consolidated Statement of Cash Flows
for the year ended 30 June 2016
Cash flows from operating activities
Result from operating activities
Adjustments for:
Depreciation
Amortisation
Write off development cost
Loss on sale of property, plant and equipment
Equity-settled share-based payment transactions
Foreign exchange differences
Changes in:
– inventories
– trade and other receivables
– trade and other payables
– provisions
Cash generated from operating activities
Finance income
Finance cost
Taxes paid
Net cash from operating activities
Cash flows from investing activities
Proceeds from sale of property, plant and equipment
Enhancement of exploration and development asset
Acquisition of property, plant and equipment
Non-current cash deposit
Net cash used in investing activities
Cash flows from financing activities
(Payment of)/proceeds from interest bearing borrowings
Payment of finance lease liabilities
Net cash flows from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at 1 July
Cash and cash equivalents at 30 June
Notes
31.1
31.2
22
2016
£’000
1,172
514
192
–
62
72
(421)
1,591
(20)
(2,950)
3,579
244
2,444
809
(39)
(342)
2,872
94
(110)
(1,284)
73
(1,227)
(105)
(114)
(219)
1,426
630
2,056
2015
£’000
(711)
390
189
(121)
148
–
(172)
(277)
(2,639)
1,481
1,574
(8)
131
843
(679)
(76)
219
24
(92)
(909)
(31)
(1,008)
160
(196)
(36)
(825)
1,455
630
The notes on pages 34 to 64 are an integral part of these consolidated financial statements.
30 GOLDPLAT PLC
242375 Goldplat RA pp26-pp33 28/09/2016 16:55 Page 31
Company Statement of Financial Position
as at 30 June 2016
Assets
Loans to subsidiary companies
Investments
Non-current assets
Trade and other receivables
Cash and cash equivalents
Current assets
Total assets
Equity
Share capital
Share premium
Retained earnings
Equity attributable to owners of the Company
Non-controlling interests
Total equity
Liabilities
Trade and other payables
Current liabilities
Total liabilities
Total equity and liabilities
Notes
18
19
21
22
23
30
2016
£’000
4,614
9,425
14,039
37
94
131
14,170
1,675
11,441
907
14,023
–
14,023
147
147
147
14,170
2015
£’000
4,470
9,425
13,895
420
15
435
14,330
1,685
11,498
1,074
14,257
–
14,257
73
73
73
14,330
These financial statements of Goldplat plc, company number 05340664, were approved by the Board of
Directors and authorised for issue on 26 September 2016. They were signed on its behalf by:
Brian Moritz
Chairman
The notes on pages 34 to 64 are an integral part of these consolidated financial statements.
GOLDPLAT PLC 31
242375 Goldplat RA pp26-pp33 28/09/2016 16:55 Page 32
Company Statement of Changes in Equity
for the year ended 30 June 2016
Balance at 1 July 2014
Total comprehensive income for the period
Loss for the year
Total other comprehensive income
Total comprehensive income for the period
Transactions with owners of the Company
recognised directly in equity
Contributions by and distributions to
owners of the Company
Share based payment transactions
Total contributions by and distributions
to owners of the Company
Balance at 30 June 2015
Balance at 1 July 2015
Total comprehensive income for the period
Loss for the year
Total other comprehensive income
Total comprehensive income for the period
Transactions with owners of the Company
recognised directly in equity
Contributions by and distributions to
owners of the Company
Share based payment transactions
Cancellation of treasury shares
Total contributions by and distributions
to owners of the Company
Balance at 30 June 2016
Attributable to owners of the Company
Share
capital
£’000
1,685
Share
premium
£’000
11,498
–
–
–
–
–
–
–
–
Retained
earnings
£’000
1,150
(76)
–
(76)
Total
equity
£’000
14,333
(76)
–
(76)
–
–
–
1,685
–
11,498
–
1,074
–
14,257
1,685
11,498
1,074
14,257
–
–
–
–
–
–
–
(10)
(10)
1,675
–
(57)
(57)
11,441
(306)
–
(306)
72
67
139
907
(306)
–
(306)
72
–
139
14,023
The notes on pages 34 to 64 are an integral part of these consolidated financial statements.
32 GOLDPLAT PLC
242375 Goldplat RA pp26-pp33 28/09/2016 16:55 Page 33
Company Statement of Cash Flows
for the year ended 30 June 2016
Notes
Cash flows from operating activities
Loss for the year
Adjustments for:
Equity-settled share-based payment transactions
Changes in:
– trade and other receivables
– trade and other payables
Cash from/(used in) operating activities
Interest paid
Net cash from/(used in) operating activities
Cash flows from financing activities
Loans with subsidiary
Net cash flows (used in)/ from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at 1 July
Cash and cash equivalents at 30 June
22
2016
£’000
(299)
72
(227)
383
74
230
(7)
223
(144)
(144)
79
15
94
2015
£’000
(70)
–
(70)
(149)
54
(165)
(6)
(171)
91
91
(80)
95
15
The notes on pages 34 to 64 are an integral part of these consolidated financial statements.
GOLDPLAT PLC 33
242375 Goldplat RA pp34-pp52 28/09/2016 16:57 Page 34
Notes to the Consolidated Financial Statements
for the year ended 30 June 2016
1. Reporting entity
Goldplat plc (the ‘Company’) is a company domiciled in England and Wales. The address of the Company’s
registered office is 55 Gower Street, London, WC1E 6HQ. The Group primarily operates as a producer of
precious metals on the African continent.
2. Going concern
The Company’s business activities, together with the factors likely to affect its future development, performance
and position are set out in the Chairman’s Statement. The financial position of the Company, its cash flows,
liquidity position and borrowing facilities are described in these financial statements. The financial statements
include the Company’s objectives, policies and processes for managing its capital; its financial risk management
objectives, details of its financial instruments and its exposures to credit risk and liquidity risk.
The Company has sufficient reserves of raw materials and ongoing contracts with its current suppliers. The
Company has a secure market for its precious metal products which are sold at market related prices which
are above production costs.
The Directors believe that this performance will be sustainable for the ensuing year and therefore continue to
adopt the going concern basis of accounting in preparing the annual financial statements.
3. Basis of 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.
The Company’s individual profit and loss account has been omitted from the Group’s annual financial statements
having taken advantage of the exemption not to disclose under Section 408(3) of the Companies Act 2006.
The Company’s comprehensive loss for the year ended 30 June 2016 was £306,000 (2015: loss £76,000).
(b) Basis of measurement
The consolidated financial statements have been prepared on the historical cost basis.
Functional and presentation currency
(c)
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 currencies are considered to be the US Dollar (“USD”) and South African Rand (“ZAR”)
as these currencies mainly influence sales prices and expenses respectively.
(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.
34 GOLDPLAT PLC
242375 Goldplat RA pp34-pp52 28/09/2016 16:57 Page 35
3. Basis of preparation continued
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
– Notes 4(a)(i) and 15
Capitalisation of pre-production expenditure
– Notes 4(e)(ii) and 15
Accounting entries are made in accordance with the accounting policies detailed below.
4. Significant accounting policies
The accounting policies set out below have been applied consistently to all periods presented in these
consolidated financial statements, and have been applied consistently by Group entities.
(a) Basis of consolidation
Business combinations
(i)
Business combinations are accounted for using the acquisition method as at the acquisition date, which is the
date on which control is transferred to the Group. Control is the power to govern the financial and operating
policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into
consideration potential voting rights that currently are exercisable.
The Group measures goodwill at the acquisition date as:
•
•
•
•
the fair value of the consideration transferred; plus
the recognised amount of any non-controlling interests in the acquiree; plus
if the business combination is achieved in stages, the fair value of the pre-existing equity interest in the
acquiree; less
the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase price is recognised immediately in profit or loss.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships.
Such amounts generally are recognised in profit or loss.
Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs
in connection with a business combination are expensed as incurred.
Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent
consideration is classified as equity, then it is not remeasured and settlement is accounted for within equity.
Otherwise, subsequent changes in the fair value of the contingent consideration are recognised in profit or loss.
When share-based payment awards (replacement awards) are required to be exchanged for awards held by
the acquiree’s employees (acquiree’s awards) and relate to past services, then all or a portion of the amount of
the acquirer’s replacement awards is included in measuring the consideration transferred in the business
combination. This determination is based on the market-based value of the replacement awards compared with
the market-based value of the acquiree’s awards and the extent to which the replacement awards relate to past
and/or future service.
Subsidiaries
(ii)
Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in the
consolidated financial statements from the date that control commences until the date that control ceases.
GOLDPLAT PLC 35
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Notes to the Consolidated Financial Statements
continued
Loss of control
4. Significant accounting policies continued
(iii)
On the loss of control, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling
interests and other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of
control is recognised in profit or loss. If the Group retains any interest in the previous subsidiary, then such
interest is measured at fair value at the date that control is lost. Subsequently it is accounted for as an equity-
accounted investee or as an available-for-sale financial asset depending on the level of influence retained.
Transactions eliminated on consolidation
(iv)
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group
transactions, are eliminated in preparing the consolidated financial statements.
Foreign currency
Foreign currency transactions
(b)
(i)
Assets and liabilities denominated in foreign currencies are translated at the closing rate at the balance sheet
date. Income and expense items are translated at an average rate for the year.
All differences are charged to the statement of profit or loss and other comprehensive income.
Foreign operations
(ii)
The assets and liabilities of foreign operations, including goodwill and the fair value adjustments arising on
acquisition, are translated to GBP at exchange rates at the reporting date. The income and expenses of foreign
operations, are translated to GBP at exchange rates at the dates of the transactions.
Foreign currency differences are recognised in other comprehensive income, and presented in the exchange
reserve in equity. However, if the foreign operation is a non-wholly owned subsidiary, then the relevant proportion
of the translation difference is allocated to non-controlling interests. When a foreign operation is disposed of
such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve
related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When
the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining
control, the relevant proportion of the cumulative amount is reattributed to non-controlling interests.
When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned
nor likely in the foreseeable future, foreign currency gains and losses arising from such item are considered to
form part of a net investment in the foreign operation and are recognised in other comprehensive income, and
presented in the exchange reserve in equity.
Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets and
liabilities of the foreign operation and translated at the closing rates.
Financial instruments
(c)
(i) Non-derivative financial assets
The Group initially recognises loans and receivables on the date that they are originated. All other financial
assets are recognised initially on the trade date, which is the date that the Group becomes a party to the
contractual provisions of the instrument.
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire,
or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all the risks
and rewards of ownership of the financial asset are transferred. Any interest in such transferred financial assets
that is created or retained by the Group is recognised as a separate asset or liability.
36 GOLDPLAT PLC
242375 Goldplat RA pp34-pp52 28/09/2016 16:57 Page 37
4. Significant accounting policies continued
Financial assets and liabilities are offset and the net amount presented in the statement of financial position
when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net
basis or to realise the asset and settle the liability simultaneously.
The Group’s non-derivative financial assets comprise loans and receivables.
Loans and receivables
Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active
market. Such assets are recognised initially at fair value plus any directly attributable transaction costs.
Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective
interest method, less any impairment losses. A provision is established when there is objective evidence that the
Group will not be able to collect all amounts due. The amount of any provision is recognised in the consolidated
statement of profit or loss and other comprehensive income.
Loans and receivables comprise trade and other receivables.
Cash and cash equivalents
Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original
maturity of three months or less. Bank overdrafts that are repayable on demand and form part of the Group’s
cash management are included as a component of cash and cash equivalents for the purposes of the statement
of cash flows.
(ii) Non-derivative financial liabilities
The Group initially recognises debt securities issued and subordinated liabilities on the date that they are
originated. All other financial liabilities (including liabilities designated at fair value through profit or loss) are
recognised initially on the trade date, which is the date that the Group becomes a party to the contractual
provisions of the instrument.
The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or
expire.
The Group classifies non-derivative financial liabilities into the other financial liabilities category. Such financial
liabilities are recognised initially at fair value less any directly attributable transaction costs. Subsequent to initial
recognition, these financial liabilities are measured at amortised cost using the effective interest method.
Other financial liabilities comprise loans and borrowings, finance lease obligations, and trade and other
payables.
Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are
included as a component of cash and cash equivalents for the purpose of the statement of cash flows.
(iii) Share capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares
are recognised as a deduction from equity, net of any tax effects.
Repurchase and reissue of share capital (treasury shares)
When share capital recognised as equity is repurchased, the amount of consideration paid, which includes
directly attributable costs, net of any tax effects, is recognised as a deduction from equity. Repurchased shares
are classified as treasury shares. When treasury shares are sold or reissued subsequently, the amount received
is recognised as an increase in equity, and the resulting surplus or deficit on the transaction is presented in
share premium.
GOLDPLAT PLC 37
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Notes to the Consolidated Financial Statements
continued
4. Significant accounting policies continued
(d) Property, plant and equipment
(i)
Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated
impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset.
The cost of the mining asset includes the costs of dismantling and removing the items and restoring the site on
which they are located.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as
separate items (major components) of property, plant and equipment.
Any gain or loss on disposal of an item of property, plant and equipment (calculated as the difference between
the net proceeds from disposal and the carrying amount of the item) is recognised in profit or loss.
Subsequent costs
(ii)
Subsequent expenditure is capitalised only when it is probable that the future economic benefits associated
with the expenditure will flow to the Group. Ongoing repairs and maintenance is expensed as incurred.
(iii) Depreciation
Items of property, plant and equipment are depreciated on a straight-line basis in profit or loss over the estimated
useful lives of each component. Leased assets are depreciated over the shorter of the lease term and their useful
lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Freehold
land is not depreciated.
Items of property, plant and equipment are depreciated from the date that they are installed and are ready for
use, or in respect of internally constructed assets, from the date that the asset is completed and ready for use.
The estimated useful lives for the current and comparative years of significant items of property, plant and
equipment are as follows:
•
•
•
•
•
•
•
leasehold land
lease period
buildings
plant and equipment
motor vehicles
office equipment
20 years
10 years
5 years
6 years
environmental assets
life of mine
pre-production expenditure
10 years from date of commencement of production
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if
appropriate.
Intangible assets
(e)
(i) Goodwill
Goodwill that arises on the acquisition of subsidiaries is presented within intangible assets. For the measurement
of goodwill at initial recognition, see note 4(a)(i).
Subsequent measurement
Goodwill is measured at cost less accumulated impairment losses.
38 GOLDPLAT PLC
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4. Significant accounting policies continued
(ii) Mining rights, pre-production expenditure and exploration and development
Mining rights, exploration and development includes rights in production, development and exploration phase
properties. The amount capitalised represents fair value at the time acquired, plus enhancement expenditure at
cost.
Pre-production expenditure, including evaluation costs, incurred on mines to establish or expand productive
capacity, or to support and maintain that productive capacity are capitalised. Capitalisation ceases when the
mine is in a condition necessary to operate as intended by management. Pre-production expenditure is amortised
over the estimated useful life of the mine.
Mining rights comprise production phase properties and are amortised over the estimated life of the mine.
Impairment of mining rights in production phase properties is considered based on expected future cash flows
and estimates of recoverable minerals.
Rights associated with development and exploration phase properties are not amortised until such time as the
underlying property is converted to the production phase.
Rights associated with exploration and development properties are individually evaluated for impairment based
on exploration results.
(iii) Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the
specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill
and brands, is recognised in profit or loss as incurred.
(iv) Amortisation
Except for goodwill, intangible assets are amortised on a straight-line basis in profit or loss over their estimated
useful lives, from the date that they are available for use.
Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if
appropriate. Amortisation is included within administrative expenses in the statement of profit or loss and other
comprehensive income.
Leased assets
(f)
Leases in terms of which the Group assumes substantially all of the risks and rewards of ownership are classified
as finance leases. On initial recognition, the leased asset is measured at an amount equal to the lower of its
fair value and the present value of the minimum lease payments.
Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable
to that asset.
Other leases are operating leases and are not recognised in the Group’s statement of financial position.
Inventories
(g)
Consumable stores and raw materials are measured at the lower of cost and net realisable value. The cost of
inventories is based on the weighted average basis and includes expenditure incurred in acquiring the
inventories, production or conversion costs, and other costs incurred in bringing them to their existing location
and condition.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of
completion and selling expenses.
GOLDPLAT PLC 39
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Notes to the Consolidated Financial Statements
continued
4. Significant accounting policies continued
Precious Metals on Hand and in Process represents production on hand after the smelting process, gold
contained in the elution process, gold loaded carbon in carbon-in-leach (“CIL”) and carbon-in-pulp (“CIP”)
processes, gravity concentrates, platinum group metals (“PGM”) concentrates and any form of precious metal
in process where the quantum of the contained metal can be accurately determined. It is valued at the average
production cost for the year, including amortisation and depreciation.
Broken ore represents blasted ore, underground or on stockpile, and are measured at the lower of cost and net
realisable value. The cost of broken ore is based on production costs and other costs incurred in bringing them
to their existing location and condition.
Impairment
(h)
The carrying amounts of the Group’s non-financial assets, other than inventories and deferred tax assets, are
reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such
indication exists, the asset’s recoverable amount is estimated.
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit (“CGU”)
exceeds its recoverable amount. Impairment losses are recognised in the Group statement of profit or loss and
other comprehensive income.
Goodwill is assessed annually for possible impairment. Impairment losses relating to goodwill are not reversed.
Employee benefits
(i)
Share-based payment transactions
Equity-settled share-based payments are measured at fair value (excluding the impact of any non-market vesting
conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based
payments is expensed on a straight line basis over the vesting period, based on the Group’s estimate of shares
that will eventually vest and adjusted for the effect of non market-based vesting conditions. Fair value is measured
by use of the Black Scholes model. The expected life used in the model has been adjusted, based on
management’s best estimate, for the effects of non-transferability, exercised restrictions and behavioural
considerations.
Provisions
(j)
A provision is recognised in the statement of financial position if, as a result of a past event, the Group has a
present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of
economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by
discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time
value of money and, where appropriate, the risks specific to the liability. The unwinding of the discount is
recognised as finance cost.
Environmental obligation
In accordance with the Group’s environmental policy and applicable legal requirements, a provision for site
restoration in respect of contaminated land is recognised when the land is contaminated.
The estimated long-term environmental obligations, comprising rehabilitation and mine closure, are based on
the Group’s environmental management plans in compliance with current environmental and regulatory
requirements. The amounts disclosed in the financial statements as environmental assets and obligations include
rehabilitation.
The cost of rehabilitation projects undertaken, which has been included in the provision estimate, are charged
to the provision as incurred. The cost of current programs to prevent and control future liabilities are charged to
the Group statement of profit or loss and other comprehensive income as incurred.
40 GOLDPLAT PLC
242375 Goldplat RA pp34-pp52 28/09/2016 16:57 Page 41
4. Significant accounting policies continued
(k) Revenue
Revenue from the sale of precious metals is recognised in the statement of profit or loss and other comprehensive
income when the significant risks and rewards of ownership have been transferred to the buyer excluding sales
taxes.
Finance income and finance costs
(l)
Interest income is accrued on a time basis, by reference to the principal outstanding and the applicable effective
interest rate.
Finance costs comprise interest payable on borrowings calculated using the effective interest rate method,
interest receivable on funds invested and foreign exchange gains and losses that are recognised in the Group
statement of profit or loss and other comprehensive income.
The finance expense component of finance lease payments is recognised in the Group statement of profit or
loss and other comprehensive income using the effective interest rate method.
(m) Taxation
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the Group statement
of profit or loss and other comprehensive income except to the extent that it relates to items recognised directly
in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or
substantially enacted at the balance sheet date and any adjustment to tax payable in respect of previous years.
Deferred tax is provided using the balance sheet liability method, providing for temporary differences between
the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for taxation
purposes.
Segment reporting
(n)
Segment results that are reported to the CEO include items directly attributable to a segment as well as those
that can be allocated on a reasonable basis.
5. New standards and interpretations not yet adopted
Amendments to the following International Financial Reporting Standards (IFRS) and International Accounting
Standards (IAS) have been implemented by the Group in the period ended 30 June 2016:
IAS 24 Related Party Disclosures
IFRS 8 Operating Segments
GOLDPLAT PLC 41
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Notes to the Consolidated Financial Statements
continued
5. New standards and interpretations not yet adopted continued
Standards, Amendments to published Standards and Interpretations issued but not yet effective
Certain standards, amendments to published standards and interpretations have been issued that are mandatory
for accounting periods beginning after 1 July 2015 or later periods, but which the Group has not early adopted.
At the reporting date of these financial statements, the following were in issue but not yet effective:
Amendments to IAS 1 Presentation of Financial Statements
Amendments to IFRS 7 Financial Instruments : Disclosures
Amendments to IAS 27 Separate Financial Statements
Amendments to IAS 7 Statement of Cash Flows
Amendments to IFRS 2 Share-Based Payments
IFRS 9 Financial Instruments
IFRS 11 Joint Arrangements
IFRS 15 Revenue from Contracts with Customers
IFRS 16 Leases
Where relevant, the Group is evaluating the effect of these Standards, amendments to published Standards
and Interpretations issued but not yet effective, on the presentation of its financial statements.
Certain standards, amendments to published standards and interpretations have been issued that are mandatory
for accounting periods beginning on or after 1 July 2015 or later periods, but which the Group has not early
adopted.
6. Operating segments
For each segment, the Group’s CEO (the chief operating decision maker) reviews internal management reports
on at least a quarterly basis. The following summary describes the operations in each of the Group’s reportable
segment.
•
Recovery operations. Includes the recovery of precious metals from metallurgical challenging materials
and the processing of ore, sourced from other mining operations. These products often represent an
environmental challenge to the primary producer and are processed in a responsible manner by the
company.
• Mining and exploration. Includes assets held for commercial exploitation of precious metals and exploration
assets held where the commercial viability of the ore resource has not yet been evaluated or is in the
process of evaluation.
•
Administration. Includes activities conducted by holding companies in relation to the group and its
subsidiaries.
There are varying levels of integration between the three reportable segments. This integration includes the sale
of precious metals from the Ghana recovery operation to the South African recovery operation, and the supply
of goods and services by the South African subsidiary to all group operations. Inter-segment pricing is determined
on an arm’s length basis.
Information regarding the results of each reportable segment is included below. Performance is measured based
on segment profit before tax, as included in the internal management reports that are viewed by the Group’s
CEO. Segment profit is used to measure performance as management believes that such information is the
most relevant in evaluating the results of certain segments relative to other entities that operate within these
industries.
42 GOLDPLAT PLC
242375 Goldplat RA pp34-pp52 28/09/2016 16:57 Page 43
6. Operating segments continued
Information about reportable segments:
For the year ended 30 June 2016
External revenues
Inter-segment revenues
Total revenues
Interest expense
Depreciation and amortisation
Reportable segment profit/(loss) before tax
Taxation
Reportable segment assets
Capital expenditure
Reportable segment liabilities
For the year ended 30 June 2015
External revenues
Inter-segment revenues
Total revenues
Interest expense
Depreciation and amortisation
Reportable segment profit/(loss) before tax
Taxation
Reportable segment assets
Capital expenditure
Reportable segment liabilities
Recovery
Operations
£’000
Mining and
exploration
£’000
Adminis-
tration
£’000
18,625
4,707
23,332
(39)
389
2,696
(494)
20,093
914
12,973
1,560
–
1,560
–
317
(762)
–
7,463
561
6,273
–
–
–
–
–
(12)
(40)
29,702
–
4,830
Recovery
Operations
£’000
Mining and
exploration
£’000
Adminis-
tration
£’000
15,037
1,805
16,842
(31)
313
873
(96)
14,546
753
8,292
1,591
–
1,591
–
266
(933)
–
6,099
488
4,515
–
–
–
–
–
(550)
–
28,542
–
4,969
Reconcil-
iation to
Group
figures
£’000
–
(4,707)
(4,707)
–
–
20
–
(24,547)
–
(11,462)
Reconcil-
iation to
Group
figures
£’000
–
(1,805)
(1,805)
–
–
(65)
–
(22,317)
–
(9,143)
Group
£’000
20,185
–
20,185
(39)
706
1,942
(534)
32,711
1,475
12,614
Group
£’000
16,628
–
16,628
(31)
579
(675)
(96)
26,870
1,241
8,633
Geographical information
The Recovery Operations, Mining and Exploration and Administration segments are managed on a worldwide
basis, but operate mines on the African continent.
In presenting information on the basis of geography, segment revenue is based on the geographical location
of customers and segment assets are based on the geographical location of the assets.
Revenue
Revenues are primarily derived from dore bars and product delivered in concentrate form to a local South
African refinery in Johannesburg.
Non-current assets
Non-current assets are primarily based on the African continent.
GOLDPLAT PLC 43
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Notes to the Consolidated Financial Statements
continued
6. Operating segments continued
Major customer
The major customer to the group is a local South African refinery in Johannesburg. Revenues from this customer
presents 80% (2015: 91%) of the recovery operations revenues and 100% (2015: 100%) of the mining and
exploration revenues.
7. Revenue
Sales of precious metals – Recovery operations
Sales of precious metals – Mining and exploration
Processing fees charged to customers
8. Expenses by nature
Employee benefit expense
Depreciation expense
Amortisation charged to cost of sales
Equity-settled share-based payment transactions
Auditor’s remuneration
– Audit fee
Directors’ remuneration
Loss on disposal of property, plant and equipment
2016
£’000
17,124
1,560
1,501
20,185
2016
£’000
3,401
514
192
72
97
483
62
2015
£’000
14,883
1,591
154
16,628
2015
£’000
3,756
390
189
–
135
369
148
Notes
9
14
15
10
Auditor’s remuneration in respect of the Company amounted to £32,500 (2015: £32,000). Of this amount,
£32,500 (2015: £32,000) was in relation to audit services and £nil (2015: £nil) for tax advice.
9. Personnel expenses
Wages and salaries
Performance based payments
National insurance and unemployment fund
Skills development levy
Medical aid contributions
Group life contributions
Provident funds
The average number of employees (including directors) during the period was:
Directors
Administrative personnel
Production personnel
44 GOLDPLAT PLC
2016
£’000
3,117
47
57
24
20
96
40
3,401
2016
5
38
436
479
2015
£’000
3,454
112
40
28
27
43
52
3,756
2015
5
27
368
400
242375 Goldplat RA pp34-pp52 28/09/2016 16:57 Page 45
10. Directors’ emoluments
2016
Wages and salaries
Fees
Other benefits
2015
Wages and salaries
Fees
Other benefits
Executive
£’000
Non-executive
£’000
397
–
77
474
–
65
–
65
Executive
£’000
Non-executive
£’000
291
–
13
304
–
65
–
65
2016
£’000
227
Total
£’000
397
65
77
539
Total
£’000
291
65
13
369
2015
£’000
128
Emoluments disclosed above include the following amounts paid to the highest director:
Emoluments for qualifying services
Key management
Apart from the Directors, the emoluments paid to key management personnel amounted to £576,000 (2015:
£522,000).
11. Finance income and finance costs
Recognised in profit or loss
Interest income on cash balances held
Foreign exchange gains
Finance income
Interest expense on utilisation of overdraft facility
Interest on finance leases
Foreign exchange loss
Finance costs
Net finance costs recognised in profit or loss
2016
£’000
11
798
809
(28)
(11)
–
(39)
770
2015
£’000
11
832
843
(14)
(16)
(777)
(807)
36
The above finance income and finance costs include the following interest income
and expense in respect of assets (liabilities) not measured at fair value through
profit or loss:
– Total interest income on financial assets
– Total interest expense on financial liabilities
11
(39)
11
(30)
GOLDPLAT PLC 45
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Notes to the Consolidated Financial Statements
continued
12. Write off development cost of discontinued South African mining operation
Write off CRG development
2016
£’000
–
2015
£’000
121
The contract with and the mining activity at Central Rand Gold has been terminated as the risk-reward was no
longer viable. The development cost capitalised on the operations at Central Rand Gold were written-off in the
previous year.
13. Taxation
Current tax expense
Tax recognised in profit or loss
Current tax expense
Current period
Secondary tax on dividends paid from South Africa
Deferred tax expense
Origination and reversal of temporary differences
Total tax expense
Reconciliation of effective tax rate
Profit/(loss) for the year
Total tax expense
Profit excluding tax
Tax using the Company’s domestic tax rate of 20.00% (2015: 20.75%)
Effects of:
Expenses not deductible for tax purposes
Effect of lower tax levied on overseas subsidiaries
Tax losses carried forward
Secondary tax on dividends paid from South Africa
2016
£’000
2015
£’000
437
40
477
57
57
534
2016
£’000
1,408
534
1,942
388
6
(56)
156
40
534
36
–
36
60
60
96
2015
£’000
(892)
96
(796)
(165)
7
(132)
386
–
96
None of the components of other comprehensive income have a tax impact.
The tax charge arises in South Africa where group relief is not available from other jurisdictions.
46 GOLDPLAT PLC
242375 Goldplat RA pp34-pp52 28/09/2016 16:57 Page 47
14. Property, plant and equipment
Freehold/
leasehold
land
£’000
Buildings
£’000
Plant and
equipment
£’000
Motor
vehicles
£’000
Office
equipment
£’000
Environ-
mental
asset
£’000
Cost
Balance at
1 July 2014
Additions
Disposals
Effect of movements
in exchange rates
Balance at
30 June 2015
Balance at
1 July 2015
Additions
Disposals
Effect of movements
in exchange rates
Balance at
30 June 2016
Depreciation
Balance at
1 July 2014
Depreciation charge
for the year
Disposals
Effect of movements
in exchange rates
Balance at
30 June 2015
Balance at
1 July 2015
Depreciation charge
for the year
Disposals
Effect of movements
in exchange rates
Balance at
30 June 2016
Carrying amounts
At 30 June 2014
At 30 June 2015
At 30 June 2016
426
–
–
73
499
5
–
–
(1)
4
4
1
–
1
6
240
221
–
(35)
440
1
(5)
(39)
4,037
906
(247)
1,128
19
–
(307)
(79)
426
397
4,389
1,068
397
16
–
25
4,389
1,260
(111)
189
438
5,727
109
1,152
18
(2)
(8)
252
(78)
(88)
1,068
80
(358)
26
816
457
109
–
(31)
117
1,238
535
117
1,238
21
–
3
355
(55)
43
141
1,581
535
124
(258)
10
411
671
533
405
235
422
493
331
280
297
2,885
3,151
4,146
74
2
–
(7)
69
69
9
(1)
7
84
32
8
–
(2)
38
38
10
(1)
2
49
42
31
35
Total
£’000
5,995
1,149
(252)
(472)
6,420
6,420
1,365
(470)
76
–
–
(5)
71
71
–
–
(2)
318
69
7,633
38
1,793
3
–
(2)
39
39
3
–
(1)
390
(80)
(132)
1,971
1,971
514
(314)
58
41
2,229
38
32
28
4,202
4,449
5,404
GOLDPLAT PLC 47
242375 Goldplat RA pp34-pp52 28/09/2016 16:57 Page 48
Notes to the Consolidated Financial Statements
continued
14. Property, plant and equipment continued
Leased plant and equipment
The Group leases plant and equipment under a number of finance lease agreements. The leased equipment
secures lease obligations. At 30 June 2016 the net carrying amount of leased plant and equipment was
£202,000 (2015: £314,000). During the year, the Group acquired leased assets of £81,000 (2015:
£240,000) (see note 25 and 31.2).
Mining
rights and
pre-production
expenditure
£’000
Exploration
and
development
£’000
4,748
–
(107)
4,641
4,641
–
–
127
4,768
1,715
160
–
161
2,036
2,036
152
–
(314)
1,874
3,033
2,605
2,894
1,767
92
(209)
1,650
1,650
110
(42)
350
2,068
780
29
–
(92)
717
717
40
(42)
152
867
987
933
1,201
Goodwill
£’000
5,631
–
–
5,631
5,631
–
–
–
5,631
–
–
–
–
–
–
–
–
–
–
5,631
5,631
5,631
Total
£’000
12,146
92
(316)
11,922
11,922
110
(42)
477
12,467
2,495
189
–
69
2,753
2,753
192
(42)
(162)
2,741
9,651
9,169
9,726
15. Intangible assets
Cost
Balance at 1 July 2014
Additions
Effect of movements in exchange rates
Balance at 30 June 2015
Cost
Balance at 1 July 2015
Additions
Impairment
Effect of movements in exchange rates
Balance at 30 June 2016
Amortisation and impairment losses
Balance at 1 July 2014
Amortisation for the year
Impairment
Effect of movements in exchange rates
Balance at 30 June 2015
Amortisation and impairment losses
Balance at 1 July 2015
Amortisation for the year
Impairment
Effect of movements in exchange rates
Balance at 30 June 2016
Carrying amounts
Balance at 30 June 2014
Balance at 30 June 2015
Balance at 30 June 2016
48 GOLDPLAT PLC
242375 Goldplat RA pp34-pp52 28/09/2016 16:57 Page 49
15. Intangible assets continued
Goodwill relates to the investment held in Gold Mineral Resources Limited and is supported by the ongoing
gold recovery operations in South Africa and Ghana and the Kilimapesa mine in Kenya.
Mining rights and preproduction expenditure are amortised over the life of mine. The life of mine within the
Group range between 10 and 25 years.
The exploration and development rights relate to exploration and mining licenses in Burkina Faso and Ghana,
and the mining rights to the Kilimapesa mine in Kenya.
The Group has capitalised all expenditure incurred on the Kilimapesa gold mining project, the Nyieme gold
mining project and the Anumso gold mining project whilst the mines are in the development phase.
16. Proceeds from sale of shares in subsidiary
Consideration due on sale of 15% and 11% of the issued share capital of Goldplat Recovery (Pty) Limited:
Balance at beginning of year
Received from dividends
Effect of movement in exchange rates
Balance at end of year
2016
£’000
1,357
(46)
(40)
1,271
2015
£’000
1,448
–
(91)
1,357
The proceeds from sale of shares in Goldplat Recovery (Pty) Limited, in compliance with Black Economic
Empowerment legislation in South Africa, are recoverable from future dividends. They have been included at
historical cost due to the uncertainty surrounding the variables required to calculate this asset at amortised cost.
The directors consider that this reflects the most accurate measurement of the asset.
17. Non-current cash deposits
Group
Non-current cash deposit
18. Loans to subsidiary companies
Funds advanced to Gold Mineral Resources Limited
2016
£’000
160
2016
£’000
4,614
2015
£’000
233
2015
£’000
4,470
Interest is charged at 2% above LIBOR on the monthly outstanding balances. This interest was waived for the
year ended 30 June 2016 (2015: £Nil as waived).
Loans to subsidiary companies are unsecured.
GOLDPLAT PLC 49
242375 Goldplat RA pp34-pp52 28/09/2016 16:57 Page 50
Notes to the Consolidated Financial Statements
continued
19. Investments
Investment in Gold Mineral Resources Limited
Details of the Company’s significant subsidiaries are outlined in note 36.
2016
£’000
9,425
2015
£’000
9,425
20. Inventories
Consumable stores
Raw materials
Precious metals on hand and in process
Broken ore
2016
£’000
1,094
347
6,124
182
7,747
Amount of inventory charged as an expense was £17,177,000 (2015: £15,660,000).
21. Trade and other receivables
Group
Trade receivables
Other receivables
Company
Other receivables
2016
£’000
4,546
1,709
6,255
2016
£’000
37
37
2015
£’000
1,009
516
6,115
87
7,727
2015
£’000
2,447
858
3,305
2015
£’000
420
420
Trade and other receivables for the Group include a balance of £679,000 which the customer is disputing. A
process of investigation has been agreed to with customer regarding the toll treat agreement entered into and
the resultant processing of their silver sulphide material. Based on legal advice received, management are
comfortable that the balance will be collected.
The Group and Company’s exposure to credit and currency risk is disclosed in note 32.
50 GOLDPLAT PLC
242375 Goldplat RA pp34-pp52 28/09/2016 16:57 Page 51
22. Cash and cash equivalents
Group
Bank balances
Bank overdrafts used for cash management purposes
Cash and cash equivalents in the statement of cash flows
Company
Bank balances
Cash and cash equivalents in the statement of cash flows
23. Capital and reserves
Share capital and share premium
On issue at 1 July
Cancellation of treasury shares
On issue at 30 June – fully paid
Authorised – par value £0.01
2016
£’000
2,148
2,148
(92)
2,056
2016
£’000
94
94
2015
£’000
630
630
–
630
2015
£’000
15
15
Number of ordinary shares
2015
2016
168,441,000
(1,000,000)
167,441,000
1,000,000,000
168,441,000
–
168,441,000
1,000,000,000
Issued share capital includes nil (2015 : 1,000,000) ordinary shares of £0.01 each held in treasury. The
treasury shares were cancelled on 15 March 2016.
Balance at 1 July
Shares cancelled in year
Balance at 30 June
Ordinary share capital
2016
£’000
1,685
(10)
1,675
2015
£’000
1,685
–
1,685
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.
Dividends
A dividend of nil per ordinary share is proposed in respect of the year ended 30 June 2016 (2015: nil).
Exchange reserve
The exchange reserve comprises all foreign currency differences arising from the translation of the financial
statements of foreign operations.
GOLDPLAT PLC 51
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Notes to the Consolidated Financial Statements
continued
24. Earnings per share
Basic earnings per share
The calculation of basic earnings per share at 30 June 2016 was based on the profit attributable to ordinary
shareholders of £1,408,000 (2015: loss £892,000), and a weighted average number of ordinary shares
outstanding of 168,364,288 (2015: 168,441,000), calculated as follows:
Profit attributable to ordinary shareholders
Profit/(loss) attributable to ordinary shareholders
Weighted average number of ordinary shares
Issued ordinary shares at 1 July
Effect of treasury shares cancelled
Weighted average number of ordinary shares at 30 June
2016
Continuing
operations
£’000
1,408
2015
Continuing
operations
2015
(892)
2016
2015
168,441,000 168,441,000
–
168,364,288 168,441,000
(76,712)
Diluted earnings per share
The calculation of diluted earnings per share at 30 June 2016 was based on the profit attributable to ordinary
shareholders of £1,408,000 (2015: loss £892,000), and a weighted average number of ordinary shares
outstanding after adjustment for the effect of all dilutive potential ordinary shares of 185,010,536 (2015: anti-
dilutive), calculated as follows:
Profit attributable to ordinary shareholders (diluted)
Profit attributable to ordinary shareholders (diluted)
Weighted average number of ordinary shares (diluted)
Weighted average number of ordinary shares (basic)
Effect of share options on issue
Weighted average number of ordinary shares (diluted) at 30 June
2016
Continuing
operations
£’000
1,408
2015
Continuing
operations
2015
n/a
2016
168,364,288
16,646,248
185,010,536
2015
n/a
n/a
n/a
52 GOLDPLAT PLC
242375 Goldplat RA pp53-pp66 28/09/2016 16:59 Page 53
25. Obligations under finance leases
Non-current liabilities
Finance lease liabilities
Current liabilities
Current portion of finance lease liabilities
2016
£‘000
157
2015
£‘000
199
129
120
Terms and conditions of outstanding leases were as follows:
2016
Finance lease liabilities
Total interest-bearing liabilities
2015
Finance lease liabilities
Total interest-bearing liabilities
Currency
ZAR
Currency
ZAR
Nominal
interest rate
10.5%
Nominal
interest rate
9%
Year of
maturity
2018
Year of
maturity
2017
Face value Carrying amount
£ ‘000
£’000
286
286
286
286
Face value Carrying amount
£ ‘000
£’000
319
319
319
319
Finance lease liabilities
Finance lease liabilities are payable as follows:
2016
Less than one year
Between one and five years
2015
Less than one year
Between one and five years
Future
minimum
lease payments
£ ‘000
134
158
292
Future
minimum
lease payments
£ ‘000
127
200
327
Present value
of minimum
lease payments
£ ‘000
129
157
286
Present value
of minimum
lease payments
£ ‘000
120
199
319
Interest
£ ‘000
5
1
6
Interest
£ ‘000
7
1
8
The average lease term is 2 years. For the year ended 30 June 2016, the average effective borrowing rate
was 10.5% (2015: 9%). Interest rates are variable over the lease term and vary according to the South African
prime interest rate.
The Group’s obligations under finance leases are secured over the leased assets.
GOLDPLAT PLC 53
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Notes to the Consolidated Financial Statements
continued
26. Interest bearing borrowings
Non-current liabilities
Interest bearing borrowings
Current liabilities
Interest bearing borrowings
Terms and conditions of outstanding borrowings were as follows:
2016
Interest bearing borrowings
Total interest-bearing liabilities
Currency
ZAR
Nominal
interest rate
10.5%
Year of
maturity
2018
Interest bearing borrowings are payable as follows:
2016
Less than one year
2015
Interest bearing borrowings
Total interest-bearing liabilities
Currency
ZAR
Nominal
interest rate
9.25%
Interest bearing borrowings are payable as follows:
2015
Less than one year
Between one and five years
Future
minimum
lease payments
£ ‘000
56
56
Year of
maturity
2017
Future
minimum
lease payments
£ ‘000
114
57
171
2016
£‘000
–
55
2015
£‘000
56
104
Face value Carrying amount
£ ‘000
£’000
55
55
55
55
Present value
of minimum
lease payments
£ ‘000
55
55
Interest
£ ‘000
1
1
Face value Carrying amount
£ ‘000
£’000
160
160
160
160
Present value
of minimum
lease payments
£ ‘000
104
56
160
Interest
£ ‘000
10
1
11
54 GOLDPLAT PLC
242375 Goldplat RA pp53-pp66 28/09/2016 16:59 Page 55
27. Share options
Reconciliation of outstanding share options
Outstanding at 1 July
Granted during the year
Lapsed during the year
Outstanding at 30 June
2016
2015
Number
of options
8,500,000
11,000,000
(1,000,000)
18,500,000
Exercise
price
3.125p
Number
of options
7,500,000
1,000,000
–
8,500,000
Exercise
price
6p
The weighted average exercise price of the exercisable options is £0.0660 (2015: £0.1103).
On 22 July 2015 the Company issued 11,000,000 share options to key management. The fair value of these
options has been independently calculated using the Black Scholes model using the following assumptions:
Number of options granted
Share price at date of grant
Risk free interest rate
Expected volatility
Expected dividend yield
Life of the option
Option 1
Option 2
Option 3
3,666,667
1.875p
1.51%
58.61%
0%
5 years
3,666,667
1.875p
1.69%
58.61%
0%
6 years
3,666,666
1.875p
1.83%
58.61%
0%
7 years
The weighted average remaining contractual life of the options outstanding at the balance sheet date is 3 years
292 days.
28. Provisions
Environmental obligation
Balance at 1 July
Provisions made during the year
Effect of foreign exchange movements
Non-current
2016
£’000
121
244
18
383
383
383
2015
£’000
129
–
(8)
121
121
121
The provision relates to a requirement to rehabilitate the land owned in South Africa upon cessation of the
mining lease.
GOLDPLAT PLC 55
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Notes to the Consolidated Financial Statements
continued
29. Deferred taxation
Balance at 1 July
Current charge
– temporary difference
Effect of foreign exchange movements
Comprising:
Capital allowances
Prepayments
30. Trade and other payables
Group
Trade payables
Amounts received in advance
Accrued expenses
Company
Trade payables
Accrued expenses
2016
£’000
459
57
(6)
510
647
(137)
510
2016
£’000
2,666
1,107
7,362
11,135
2016
£’000
117
30
147
2015
£’000
430
60
(31)
459
533
(74)
459
2015
£’000
1,860
–
5,696
7,556
2015
£’000
43
30
73
Amounts received in advance are secured by the trade receivable balances to which they relate.
Accrued expenses substantially relate to precious metals on hand and in process (note 20).
The Group’s and Company’s exposure to currency and liquidity risk related to trade and other payables is
disclosed in note 32.
56 GOLDPLAT PLC
242375 Goldplat RA pp53-pp66 28/09/2016 16:59 Page 57
31. Notes to the cash flow statement
31.1 Financing cost
As per statement of profit or loss and other comprehensive income
Adjust for: Unrealised exchange loss
31.2 Acquisition of property, plant and equipment
Additions for the year
Adjust for: Additions acquired on hire purchase (note 14)
2016
£’000
(39)
–
(39)
2016
£’000
(1,365)
81
(1,284)
2015
£’000
(807)
128
(679)
2015
£’000
(1,149)
240
(909)
32. Financial instruments
Financial risk management
The Group’s and Company’s operations expose it to a variety of financial risks. Exposure to credit, interest rate
and currency risks arises in the normal course of the Group’s and Company’s business. The Group and Company
has in place a risk management programme that seeks to limit the adverse effect of such risks on its financial
performance which is provided below.
Credit risk
Credit risk is the risk of financial loss to the Group or Company if a customer or counterparty to a financial
instrument fails to meet its contractual obligations.
Management has a credit policy in place of and the exposure to credit risk is monitored on an ongoing basis.
The Group primarily deals with reputable mining houses and is unlikely to suffer any losses from this risk.
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to
credit risk at the reporting date was as follows.
Group
Trade and other receivables
Cash and cash equivalents
Company
Loans to subsidiary
Cash and cash equivalents
Carrying amount
2016
£‘000
6,255
2,308
8,563
2015
£‘000
3,305
863
4,168
Carrying amount
2016
£‘000
4,614
94
2015
£‘000
4,470
15
Liquidity risk
Liquidity risk is the risk that the Group or Company will encounter difficulty in meeting the obligations associated
with its financial liabilities that are settled by delivering cash or another financial asset.
The Group reviews its facilities regularly to ensure it has adequate funds for operations and expansion plans.
GOLDPLAT PLC 57
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Notes to the Consolidated Financial Statements
continued
32. Financial instruments continued
The following are the contractual maturities of financial liabilities, including estimated interest payments and
excluding the impact of netting agreements.
Group
2016
Non-derivative financial liabilities
Finance lease liabilities
Interest bearing borrowings
Trade and other payables
Bank overdraft
2015
Non-derivative financial liabilities
Finance lease liabilities
Interest bearing borrowings
Trade and other payables
Bank overdraft
Company
2016
Non-derivative financial liabilities
Trade payables
Company
2015
Non-derivative financial liabilities
Trade payables
Carrying
amount
£ ‘000
Contractual
cash flows
£ ‘000
2 months
or less
£ ‘000
2-12 months
£ ‘000
1-2 years
£ ‘000
286
55
11,135
92
11,568
(295)
(55)
(11,135)
(92)
(11,577)
(18)
(10)
(3,950)
(92)
(4,070)
(90)
(45)
(7,185)
–
(7,320)
(187)
–
–
–
(187)
Carrying
amount
£ ‘000
Contractual
cash flows
£ ‘000
2 months
or less
£ ‘000
2-12 months
£ ‘000
1-2 years
£ ‘000
319
160
7,556
–
8,035
(327)
(171)
(7,556)
–
(8,054)
(20)
(17)
(2,680)
–
(2,717)
(100)
(87)
(4,876)
–
(5,063)
(207)
(67)
–
–
(274)
Carrying
amount
£ ‘000
Contractual
cash flows
£ ‘000
2 months
or less
£ ‘000
2-12 months
£ ‘000
1-2 years
£ ‘000
147
147
(147)
(147)
(75)
(75)
(72)
(72)
–
–
Carrying
amount
£ ‘000
Contractual
cash flows
£ ‘000
2 months
or less
£ ‘000
2-12 months
£ ‘000
1-2 years
£ ‘000
73
73
(73)
(73)
(73)
(73)
–
–
–
–
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity
prices will affect the Group’s and Company’s income or the value of its holdings of financial instruments. The
objective of market risk management is to manage and control market risk exposures within acceptable
parameters, while optimising the return.
Due to the nature of the Group’s operations, it is mainly exposed to the following risks:
•
•
fluctuations in the price of gold; and
exchange rate risk at its operations
58 GOLDPLAT PLC
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32. Financial instruments continued
The following applied to the financial years presented in these financial statements:
2016
Gold price – USD/oz
Rand/USD exchange rate
GBP/USD exchange rate
GHC/USD exchange rate
Kshs/USD exchange rate
2015
Gold price – USD/oz
Rand/USD exchange rate
GBP/USD exchange rate
GHC/USD exchange rate
Kshs/USD exchange rate
High
1,325
16.84
1.58
4.41
107.75
High
1,342
12.60
1.46
4.45
100.87
Low
1,049
12.20
1.33
3.28
101.12
Low
1,144
10.52
1.72
3.20
87.75
Average
1,167
14.51
1.48
3.90
103.77
Average
1,229
11.40
1.58
3.54
92.49
Sensitivity analysis
The Group has applied the following assumptions in its sensitivity analysis:
2016
Gold price – USD/oz
Rand/USD exchange rate
GBP/USD exchange rate
GHC/USD exchange rate
Kshs/USD exchange rate
Equivalent Rand price per kilogram
Equivalent GBP price per kilogram
Equivalent GHC price per kilogram
Equivalent Kshs price per kilogram
2015
Gold price – USD/oz
Rand/USD exchange rate
GBP/USD exchange rate
GHC/USD exchange rate
Kshs/USD exchange rate
Equivalent Rand price per kilogram
Equivalent GBP price per kilogram
Equivalent GHC price per kilogram
Equivalent Kshs price per kilogram
High case
scenario
Low case
scenario
1,325
16.84
1.58
4.41
107.75
716,994
27,035
187,900
4,588,386
1,049
12.20
1.33
3.28
101.12
411,716
25,346
110,748
3,411,581
High case
scenario
Low case
scenario
1,342
13.00
1.50
4.50
105.00
560,797
28,759
194,122
4,529,511
1,144
10.00
1.80
3.00
83.00
367,683
20,427
110,305
3,051,773
GOLDPLAT PLC 59
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Notes to the Consolidated Financial Statements
continued
32. Financial instruments continued
The Group’s sensitivity to market risk
The following tables illustrate the Group’s sensitivity to these risks based on the above assumptions:
2016
Effect on the results and equity for the year
based on these assumptions would have been:
– Gold Recovery Ghana Limited
– Goldplat Recovery (Pty) Limited
– Kilimapesa Gold (Pty) Limited
2015
Effect on the results and equity for the year
based on these assumptions would have been:
– Gold Recovery Ghana Limited
– Goldplat Recovery (Pty) Limited
– Kilimapesa Gold (Pty) Limited
High case
scenario
Low case
scenario
2,316
4,822
279
High case
scenario
1,083
3,411
382
(1,964)
(3,713)
(193)
Low case
scenario
(586)
(2,551)
(262)
Currency risk
The Group is exposed to foreign currency risk on sales and purchases that are denominated in a currency other
than GBP. The currencies giving rise to this risk are primarily the US Dollar (“USD”), South African Rand (“ZAR”),
Ghanaian Cedi (“GHS”), CFA Franc and the Kenyan Shilling.
Interest rate risk
The Group generally adopts a policy of ensuring that its exposure to changes in interest rates is on a floating
rate basis.
Fair values
The fair values of financial instruments such as interest-bearing loans and borrowings, finance lease liabilities,
trade and other receivables/payables are substantially identical to carrying amounts reflected in the statement
of financial position.
Capital management
The Group’s objective when managing capital is to safeguard its accumulated capital in order to provide an
adequate return to shareholders by maintaining a sufficient level of funds, in order to support continued
production and maintenance at the processing plants and to acquire, explore and develop other precious and
base metal deposits in Africa.
The Group considers its capital to be shareholders’ equity which comprises share capital and retained earnings,
which at 30 June 2016 totalled £24,069,000 (2015 £23,051,000).
60 GOLDPLAT PLC
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33. Capital commitments
There were no capital commitments as at 30 June 2016 (2015: £nil).
34. Contingencies
The Kenyan Revenue Authority has conducted a preliminary enquiry on the tax affairs of Kilimapesa Gold (Pty)
Limited which may result in additional tax liabilities. The directors remain confident of a favourable outcome.
35. Related parties
Other than the waiver of intercompany interest, 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:
Goldplat plc
– Loans and borrowings
– Trade and other payables
– Goods, equipment and services received
Kilimapesa Gold (Pty) Limited
– Loans and borrowings
Nyieme Gold SARL
– Loans and borrowings
Anumso Gold Limited
– Loans and borrowings
Midas Gold SARL
– Loans and borrowings
Goldplat Recovery (Pty) Limited
– Loans and borrowings
2016
£’000
(4,614)
–
(144)
2015
£’000
(4,470)
(336)
–
3,327
2,153
1,198
1,022
79
417
67
356
(44)
(34)
GOLDPLAT PLC 61
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Notes to the Consolidated Financial Statements
continued
35. Related parties continued
The Group’s subsidiary Goldplat Recovery (Pty) Limited had the following related party transactions and
balances:
Kilimapesa Gold (Pty) Limited
– Trade and other receivables
– Goods, equipment and services supplied
Gold Recovery Ghana Limited
– Trade and other receivables
– Goods, equipment and services supplied
– Purchase of precious metals
– Trade and other payables
Gold Mineral Resources Limited
– Goods, equipment and services supplied
Anumso Gold Limited
– Trade and other receivables
– Goods, equipment and services supplied
2016
£’000
658
532
575
346
(4,459)
(295)
9
8
3
2015
£’000
464
330
231
196
(1,805)
(1)
–
4
4
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:
Nyieme Gold SARL
– Trade and other receivables
– Goods, equipment and services supplied
Kilimapesa Gold (Pty) Limited
– Trade and other receivables
– Sale of asset
Anumso Gold Limited
– Trade and other receivables
– Goods, equipment and services supplied
2016
£’000
35
17
–
225
15
11
2015
£’000
28
34
1
–
3
–
The Group’s subsidiary Midas Gold had the following related party transactions and balances in addition to
those already noted:
2016
£’000
–
–
2015
£’000
8
(8)
Nyieme Gold SARL
– Trade and other receivables
– Trade and other payables
62 GOLDPLAT PLC
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35. Related parties continued
Other transactions
The Group’s subsidiary Gold Mineral Resources had the following related party transactions and balances in
addition to those already noted:
Directors
– Trade and other payables
36. Group entities
Subsidiaries
Directly
Gold Mineral Resources Limited
Indirectly
Gold Recovery Ghana Limited
Kilimapesa Gold (Pty) Limited
Anumso Gold Limited
Nyieme Gold SARL
Goldplat Recovery (Pty) Limited
Midas Gold SARL
2016
£’000
(69)
2015
£’000
(90)
Activity
Country of
incorporation
Ownership interest
2016
2015
Holding company
Guernsey
Gold recovery
Mining minerals
Mining minerals
Mining minerals
Gold recovery
Gold recovery
Ghana
Kenya
Ghana
Burkina Faso
South Africa
Burkina Faso
100%
100%
100%
100%
100%
74%
100%
100%
100%
100%
100%
100%
74%
100%
The following summarised financial information is in respect of Goldplat Recovery (Pty) Limited which has a
26% non-controlling interest:
Total Assets
Total Liabilities
Profit for the year
Cash flow movements in year
2016
£’000
14,332
7,783
1,358
(409)
2015
£’000
10,335
5,119
965
(188)
37. Subsequent events
On 14 September 2016 Goldplat executed an earn-in option agreement (the “Agreement”) with Ashanti Gold
Corp. (“Ashanti”) (formerly Gulf Shore Resources Ltd) which gives Ashanti the option for a US$3 million earn-in
to Goldplat’s 90% owned Anumso Gold Project in Ghana (the “Project”).
Goldplat has a 90% interest in Anumso Gold Limited (“Anumso”), which is the holder of a ten-year renewable
mining lease for gold and associated minerals covering an area of 29 sq km and located in the highly
prospective Amansie East and Asante Akim South Districts of the Ashanti Region of the Republic of Ghana. The
Project has a current JORC compliant resource of 166,865 oz of gold at 2.04g/t. In the year to 30 June
2016, the loss attributable to the Project was £5,539.
The Agreement provides Ashanti with the exclusive option to earn 75% of Goldplat’s interest in Anumso in two
instalments by expending an aggregate of US$3.0 million on exploration on the Project.
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Notes to the Consolidated Financial Statements
continued
37. Subsequent events continued
The Agreement provides for two option periods. During the first 18 months of the Agreement (the “Initial Option
Period”) Ashanti will be given the option to earn 51% of Goldplat’s interest in the Project by expending US$1.5
million on exploration on the Project (the “Initial Option”). Ashanti has the unilateral power to terminate the
Agreement within the first 6 months of the Initial Option Period, and expenditure on the Project during this period
will be at its sole discretion. Should Ashanti not exercise its right to terminate the Agreement during the first six
months, it will be obliged to expend US$1.5 million on Project expenditure during the Initial Option Period or
pay the deficiency to Goldplat. Should Ashanti meet the expenditure condition within the Initial Option Period,
it will be entitled immediately to exercise its option and receive an initial 51% of Goldplat’s interest in the Project.
Conditional upon exercising the Initial Option, Ashanti will be entitled to give Goldplat notice that it intends to
invest further in the project, which will trigger a second period of 12 months (the “Subsequent Option Period”)
in which it will be given the option to earn an additional 24% of Goldplat’s interest by expending a further
US$1.5 million on exploration on the Project during the Subsequent Option Period or by paying the deficiency
to Goldplat (the “Subsequent Option”). Expenditure during the Subsequent Option Period will be at Ashanti’s
sole discretion and will not be reimbursable if Ashanti does not exercise the Subsequent Option. Should Ashanti
meet the expenditure condition within the Subsequent Option Period, it will be entitled immediately to exercise
its option and receive a further 24% of Goldplat’s interest in Anumso.
Ashanti will be the operator of the exploration and development program during the option periods, with a
Joint Technical Committee being established to agree upon the work programmes. If Ashanti does not give
Goldplat notice to trigger the Subsequent Option Period, or once the Subsequent Option has been exercised,
a Mining Company will be formed, under a Joint Venture Agreement and the mining license will be assigned
to this Company. Both parties will contribute pro-rata to further development with either non-contributing party
being diluted. If either party is diluted to 10%, this interest will be converted into a 1.5% Net Smelter Return
(“NSR”), which can be bought out by the other party for US$100,000 per 0.1% NSR, for an aggregate of
US$1.5 million.
64 GOLDPLAT PLC
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Company Information
Directors:
Company secretary
Company number:
Registered office:
Nominated adviser:
Broker:
Solicitors:
Registrars:
Financial public relations:
Auditors:
Website:
Gerard Kisbey-Green Chief Executive Officer
Non-Executive Chairman
Brian Moritz
Finance Director
Ian Visagie
Chief Operating Officer
Hansie Van Vreden
Non-Executive Director
Nigel Wyatt
Stephen Ronaldson
55 Gower Street
London WC1E 6HQ
05340664
55 Gower Street
London WC1E 6HQ
Grant Thornton UK LLP
30 Finsbury Square
London EC2P 2YU
VSA Capital Limited
New Liverpool House
15-17 Eldon Street
London EC2M 7LD
Ronaldsons Solicitors
55 Gower Street
London WC1E 6HQ
Share Registrars Limited
The Courtyard
17 West Street
Farnham
Surrey GU9 7DR
St. Brides Partners Ltd
3 St Michael’s Alley
London EC3V 9DS
Moore Stephens LLP
150 Aldersgate Street
London
EC1A 4AB
www.goldplat.com
Perivan Financial Print 242375
GOLDPLAT PLC 65
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