Goldplat plans payouts to investors after Kenya mine sale

(Alliance News) - Goldplat PLC on Tuesday said it plans to distribute royalties and surplus cash ...

Alliance News 20 July, 2021 | 11:53AM
Email Form Facebook Twitter LinkedIn RSS

(Alliance News) - Goldplat PLC on Tuesday said it plans to distribute royalties and surplus cash to shareholders, as it nears completion of the sale of the Kilimapesa gold mine in Kenya.

Shares were up 14% to 7.99 pence in London on Tuesday afternoon, giving it a market capitalisation of GBP13.6 million.

Goldplat is a gold recovery services company based in London and Benoni, South Africa.

The company said it has "no further material calls on its cashflows to invest in gold mining" following the disposal. As a result, it will distribute cash left over after paying for operational and development requirements.

In addition, Goldplat will pay any royalties it receives from Kilimapesa as dividends. The company is entitled to a 1% net smelter royalty on all production from the mine up to a maximum of USD1.5 million.

Goldplat completed the USD1.5 million sale of Kilimapesa to Mayflower Gold Investments Ltd in April. Mayflower is set to be taken over by Papillon Holdings PLC, after which Goldplat will receive USD450,000 in cash and the rest in Papillon shares.

Goldplat is a step closer to receiving the proceeds, after the UK Financial Conduct Authority on Monday approved Papillon's prospectus to be readmitted to the London Stock Exchange - a condition of the reverse takeover.

The Kilimapesa mine is one of several transactions Goldplat is undertaking. The company also announced on Tuesday that it is increasing its stake in its subsidiary, Goldplat Recovery (Pty) Ltd, to 91% from 74%.

That will be effected through a share buyback by GRL costing ZAR89.3 million, about GBP4.5 million.

The transaction will be partly financed through a new ZAR60 million loan from Nedbank Group Ltd. This carries interest of the South African Prime Rate plus 1.75% and is repayable over three years. The loan replaces Goldplat's facility with Scipion - the GBP33,000 outstanding on that will be settled.

As part of the GRL buyback deal, GRL will issue shares worth a 4.9% stake to Aurelian Capital Proprietary Ltd for ZAR16 million, equivalent to GBP807,000. Aurelian is controlled by Sango Ntsaluba, a non-executive director of Goldplat. It means Ntsaluba will ultimately own the other 9% stake in GRL.

Werner Klingenberg, chief executive of Goldplat, said the GRL deal "will provide Goldplat shareholders with the best value for use of the cash generated in the group. The transactions place the group in a position to start sharing the results of its operations with shareholders through declaration of dividends from future cashflows."

By Ivan Edwards; ivanedwards@alliancenews.com

Copyright 2021 Alliance News Limited. All Rights Reserved.

Email Form Facebook Twitter LinkedIn RSS

Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
Goldplat PLC 7.75 GBX 2.99 -
Caracal Gold PLC 0.28 GBX 3.77 -
Nedbank Group Ltd 29,330.00 ZAC -1.63 -

About Author

Alliance News

Alliance News provides Morningstar with continuously updating coverage of news affecting listed companies.

© Copyright 2024 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Modern Slavery Statement        Cookie Settings        Disclosures