Africa-focused gold miner Goldplat (LON: GDP) said it has begun the first phase of its drilling programme aimed at upgrading its resource at Kilimapesa in western Kenya to 500,000 ounces.
WH Ireland reiterated its ‘buy’ recommendation. The house broker has a 21 pence price target for the shares, which had nudged up a quarter of a penny to 11.25 pence each by 9:30am today.
Goldplat said that it now has the title deed required for the issuing of the Kilimapesa mining lease at the property and documentation has been delivered to the Kenyan Commissioner of Mines and Geology. The application will now be gazetted in the Kenyan national press for three months before the mining lease can finally be issued.
In the mean time, the company is resuming on-reef development at Kilimapesa as allowed for by a mining location licence that was issued late last year.
The firm is also restarting underground development with a view to increasing the 250 metre underground strike exposure of the auriferous quartz veins at the Kilimapesa Hill target area. Additionally, a sub-incline will be developed to extend vein exposure in depth by 30 metres vertically below current workings in order to develop the next production level.
This development is expected to provide additional ore resources to the existing JORC-compliant resource of 1.65 million tonnes with a grading of 2.44 grams per ton for 129,000 ounces of gold at a cut-off grade of one gram per ton for all categories.
Goldplat added that, following a data-gathering exercise, it has identified four highly-prospective targets at Kilimapesa that it intends to explore with a view to publishing an upgraded JORC-compliant resource by the fourth quarter of this year.
Phase one of a two-phased drilling programme began in June and is focused on exploring the Vim/Rutha and Red Ray target areas. This programme will comprise drilling of 28 shallow holes to depths of 40 metres, with the second phase of drilling designed to follow up on the results of phase one with intercepts of up to 80 metres deep.
“With the title deed now issued I am also pleased to report that we are now a short time away from being issued with the final mining lease which will trigger the commencement of full production, with an initial target of circa 5,000 ounces of gold per annum,” said Goldplat’s CEO Demetri Manolis. “These are exciting times for the Company with significant activity across the portfolio, and I look forward to updating shareholders further as we look to build our resource base and production profile.”
Last week, Goldplat updated the market about its Banka project in Ghana – stating that an independent report commissioned by the firm highlighted the potential for “significant gold mineralisation” here.
This update told of how a report from SEMS Exploration Services reckons there is significant potential to upgrade Banka’s non-JORC compliant resource of 262,107 ounces with infill drilling and the potential to increase depth of drilling from 100 metres to 250 metres.
SEMS argued that the geological setting of Banka is similar to that of gold giant Newmont’s Akyem deposit, which has approximately 14 million ounces of gold.
Today, WH Ireland said the addition of Banka shows Goldplat is continuing to add substantial gold exploration, development and mining assets to its portfolio.
“These projects are in highly prospective regions of Ghana, Kenya and Burkino Faso and [complement] the company’s highly cash-generative Ghanaian and South African precious metals recovery operations,” said Tom Elder, WH Ireland’s analyst. “The company also has a long history of profitability and is highly cash generative. Goldplat is a compelling investment case on an asset, earnings and prospectivity basis.”
For this year, WH Ireland forecasts total revenues for Goldplat of £16 million with a net profit of £3 million. For 2012 it estimate revenues and profits will come in at £15.1 million and £3.7 million respectively.
