Modern Mining: Featured News

AIM-listed Goldplat plc ranks as one of the more unusual gold producers in the world, with its revenue stream coming from two very distinct sources – one being the recovery of gold from by-products of the mining process and the other primary mining. While the recovery business currently accounts for the bulk of production, Goldplat CEO Gerard Kisbey-Green says that the company’s strategy is to increase its primary mining production. “Our goal is to have roughly half our ounces coming from direct mining within three years,” he says.

Appointed as CEO in 2015, Kisbey-Green has presided over a turnaround in Goldplat’s fortunes after the company posted losses in 2014 and 2015. In its recently released results for the year ended 30 June 2017, Goldplat reported a 140 % increase in operating profit from continuing operations to £2,91 million (2016: £1,21 million) and a 43 % increase in profit before tax from continuing operations to £2,84 million (2016: £1,99 million). Equivalent gold production for the year was 42 857 ounces, a 13,7 % increase on 2016.

Goldplat Recovery Ltd, South Africa (GPL) has extensive facilities located on a 22 ha property in the Benoni area near the centre of the East Rand goldfield.

A standout feature of the 2017 financial year was the establishment of profitability at Goldplat’s only mining operation, the small Kilimapesa gold mine in Kenya. “This operation made a loss over the year as a whole but it moved into profitability in the final two months of the reporting period, which reflects the investment we’ve made in the mine’s processing facilities. During the year, Kilimapesa produced 3 408 ounces of gold but in the final quarter the annualised rate of production was approximately 5 800 ounces,” says Kisbey-Green.

At the heart of the Goldplat operation is Goldplat Recovery Ltd, South Africa (GPL), based on a 22 ha property in the Benoni area near the centre of the East Rand goldfield. GPL – which accounts for about two thirds of Goldplat’s revenue – specialises in the recovery of gold (and other metals such as silver and, potentially, PGMs) from the by-products of the mining process including woodchips, mill liners, fine carbon, slags, sludges and waste grease. To achieve this, it employs a variety of processes including roasting in a rotary kiln, spiralling and shot-blasting, crushing, milling, thickening, flotation, gravity concentration, leaching, CIL and elution.

“This is a very specialised field and we have very few competitors as there are high barriers to entry,” says Kisbey-Green. “The key is having not just the right equipment but also the right people as metal recovery of the type we do is as much an art as a science. The challenge is to blend the raw materials and route them to the right processes to ensure maximum extraction at least cost. Some of our employees have been with us for many years and their experience is critical to our success.”

GPL ranks all the gold majors in South Africa (with one exception) among its clients. “Despite our solid client base, the sourcing of material is increasingly challenging,” says Kisbey-Green. “With the mining industry under pressure, production has declined and this inevitably impacts on the availability of by-product material.

“We believe that the ‘base’ production level we can achieve in the present market from traditional South African sources is around 22 000 ounces of gold and gold equivalents whereas our target is roughly 29 000 ounces a year. To achieve this, we need at least one large by-product project a year from non-traditional sources. This we’ve been able to do. In FY 2017, for example, we received a big consignment of carbon from an African producer.”

He adds that changing market dynamics have resulted in a situation where GPL’s CIL circuits now offer the best profitability for the business. “The focus is now on making sure that we keep these circuits busy,” he says.

Goldplat’s South African operation is complemented by Gold Recovery Ghana Ltd (GRG), which is based in the free port of Tema in Ghana. Processing facilities include a spiralling section, filter presses, an incinerator and a shotblast facility. Concentrates produced are exported either to GPL or to one of the group’s refinery partners. During FY 2017, GRG produced 10 031 ounces of gold (compared to 6 883 in FY 2016).

Says Kisbey-Green: “GRG is substantially smaller than the South African operation and it has had to contend with the fact that – for a variety of reasons – sources of raw material within the country are continuing to deplete. Despite this we’re very optimistic about the company’s future as we are in the process of establishing it as an international recovery hub. Already, we are in talks with gold producers in Ghana’s neighbours in West Africa – countries such as Burkina Faso, Mali and Guinea. We’re also negotiating contracts with South American producers and, in fact, GRG secured its first recurring contract in FY 2017 for shipments of carbon and rubber mill liners.”

He adds that GRG is looking at the possibility of cleaning-up artisanal mining tailings in Ghana and says the company is in discussion with the Ghanaian government on the initiative.

GRG is expanding its facilities. A complete modular second-hand 3-tonne elution plant was acquired from a producer in South Africa for R2 million and is now in the process of being shipped to Ghana. It is anticipated that it will be commissioned by year-end. In addition, a third fluidised bed incinerator, which was purchased second-hand from an operator in Tanzania, is currently en-route to Ghana.

Turning to the Kilimapesa gold mine in Kenya, Kisbey-Green describes it as a very small, Zimbabwean-style operation. “It is located in the Migori greenstone belt in the south-west of the country – 80 km east of Lake Victoria and 20 km north of the border with Tanzania,” he states. “It has a total resource of around 670 000 ounces of gold, which means that – at present rates of production – we can mine there for decades. It is never going to be a big mine and I would imagine that the absolute maximum we can get out of it on a yearly basis is around 15 000 ounces. Having said this, it can – and already is – making good money.”

Given that he was born on the Durban Roodepoort property and is a mining engineer by profession (he worked for, among others, Rand Mines and the gold division of Anglo American in the earlier part of his career before moving into the world of mining finance for 17 years), Kisbey-Green has a special affinity for Kilimapesa (where he currently spends up to two weeks every month). “When I came on board at Goldplat, the mine had already been with the company for seven or eight years but had never turned a profit,” he says. “My assessment was that it had potential and could become a real asset.”

The mine – which is Kenya’s only formal sector gold mine – is an underground operation. “When I worked in the gold mines in South Africa, I was exposed to shrinkage mining – which is pretty much what we’re doing at Kilimapesa. It’s labour intensive but relatively straightforward,” he says. “We decided that the key to turning around the operation was to extend and modernise the treatment facilities and in FY 2016 we took the decision to expand processing capacity by putting in a new plant which we call Plant 2. Plant 1 has been retained but is now mainly used for treating tailings sourced from nearby artisanal operations.”

The Plant 2 expansion is a three-stage project. Stage 1 included the installation of a generator, the first of two ball mills, a concentrator facility, a thickener and six CIL tanks from GRG in Ghana, as well as the establishment of a borrow pit for initial tailings deposition and the site preparation and key cut for the final tailings storage facility (TSF). Commissioning took place in December 2016 and the plant – which had an initial 60 t/day mill capacity – was officially opened in February this year by Dan Kazungu, the Kenyan Cabinet Secretary for Mining.

Stage 2 comprises the installation of a crusher circuit, associated feed belts and bins, a classifier and three additional leach tanks. Complete commissioning has been delayed by a few months due to hold-ups in the delivery of key materials, primarily steelwork associated with safety. The additional Stage 2 facilities, however, are already in operation and have doubled mill throughput to 120 t/day (with up to 160 t/day being achieved fairly regularly).

The planned Stage 3 will include the installation of a second mill, an additional thickener and three more CIL tanks, and could increase capacity up to 200 t/day. “We’re holding off on the implementation of Stage 3 till we’re certain the mine can supply sufficient quality ore and that the current profitability can be sustained,” says Kisbey-Green. “Steps we’ve taken in the mine to increase production have included the development of reef drives and raises so as to delineate profitable mining blocks and the introduction of a mechanical loader to facilitate ore handling in the cross cuts and reef drives.”

All the work associated with the Plant 2 expansion has been undertaken internally by Goldplat and has cost in the region of US$2 million. Most of the equipment has been sourced from within the group or acquired second-hand from other mining companies.

If Goldplat is to reach its goal of achieving as much production from primary mining as from recovery operations within three years, Kilimapesa will clearly have to be supplemented by one or more other mining operations. “Although we have one small exploration property in Ghana (which we’ve optioned out to Ashanti Gold Corp) and another in Burkina Faso (which we’ve written off, as it is too small to be viable), we’re not really an explorer and our intention is to target producing or near-
producing assets, preferably in Africa. We’re thus actively looking for opportunities and hope to make progress on this front in the coming year,” Kisbey-Green concludes.

Report by Arthur Tassell, photos courtesy of Goldplat.

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Title: Editor
Name: Arthur Tassell
Email: mining@crown.co.za
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Fax: +27 11 615-6108

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