Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Goldplat miner seeks to tame Africa risk

Published 19/09/2017, 10:45
Updated 19/09/2017, 11:00
Goldplat miner seeks to tame Africa risk

Goldplat miner seeks to tame Africa risk

By Barbara Lewis

LONDON (Reuters) - Upheaval in Tanzania, where the government has made huge tax demands and seized minerals, has triggered changes in neighbouring Kenya, which should reassure the industry, said the CEO of Goldplat (L:GLDP), which operates a gold mine there.

Chief Executive Gerard Kisbey-Green said he was nevertheless seeking to diversify his portfolio to cover more African nations and to expand into platinum group metals as he strives to offset African risk.

This year, the mining industry has reeled from South Africa's proposed new mining charter and changes in Tanzania, where the government is locked in a tax dispute with Barrick Gold (TO:ABX) subsidiary Acacia (L:ACAA).

Kisbey-Green said the impact of the Tanzanian actions in Kenya was "a positive contagion effect" as the mining ministry has requested the opportunity to inspect and has offered to assay each bar of bullion exported.

"It means our gold exports take a day longer, but I would rather that than have the government turn round and say we have been stealing their gold," he said.

The Kenyan Mining Ministry was not immediately available for comment. Set up around four years ago, the ministry's aim is to develop the country's mineral deposits, which include titanium, gold and coal.

Concerns about political instability are also high in Kenya after elections in August were nullified and a re-run is scheduled for October.

Kisbey-Green said he thought the only disruption to Goldplat's Kenyan mine would be two days lost production as workers went to vote.

Killmapesa in Kenya is Goldplat's only producing mine. The rest of its output is from extracting gold from mine waste in South Africa and Ghana.

One option to reduce political risk is to register the company in South Africa as, for instance, a factory rather than a resources company, given that it processes mining waste rather than mines in South Africa. That would shelter it from the mining charter.

Goldplat is also seeking to spread risk by diversifying geographically and to expand across the platinum group of metals as the South African gold sector is very mature.

"You should not have over-exposure to one country in Africa or in any emerging markets," Kisbey-Green said.

The aim over around three years is to increase output across a spread of jurisdictions by around 25 percent from recovery operations to roughly 50,000 ounces per year and to increase mining productivity from around 5,000 ounces annually to 50,000 ounces through development and acquisitions.

Like many miners, Goldplat is recovering from the commodity crash of 2015-16 as markets rally, and on Monday reported a 140 percent increase in operating profit. Since the start of the year, its shares have risen 24 percent.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.