Gold bar sale raises hope for forex boost

Goldplat, a UK-listed resources firm, has sold its first gold bars from the Kilimapesa mines in Trans Mara, marking the beginning of commercial exploitation of the precious mineral expected to boost Kenya’s forex earnings.

The firm on Tuesday said it had produced 12.4 kilogrammes (399 ounces) of gold bullion worth over Sh59 million, more than twice its initial estimates of five kilogrammes when the mining licence was issued in late November.

Goldplat produced the fully processed gold bars following commissioning of its smelting plant at the mining site.

The firm said it sold the first gold bar to Rand Refinery Limited of South Africa. Gold prices in the international markets have shot up to historical highs triggered by an investor flight to safe assets.

Sharing of royalties

Dealers were yesterday quoting the precious mineral at just under Sh5 million per kilogramme ($1,662 per ounce).

Demetri Manolis, the chief executive of Goldplat, said the sale marked a significant milestone for his firm as it moved to develop its Kilimapesa mine into a profitable venture after more than four years of exploration.

“Kilimapesa’s first gold pour marks a significant milestone for both the company and Kenya as we continue to develop the country’s first gold project into a profitable operation,” said Mr Manolis.

“We have a defined development programme in place to expand the resource base towards the 500,000 ounce mark and increase gold production towards 10,000 ounces per annum,” he said.

The government granted Goldplat a 21-year commercial mining lease to exploit gold in the Kilimapesa site, which has an estimated a reserve capacity worth Sh20 billion.

It was agreed that the State would earn five per cent of the value of each export consignment in the form of royalties, in addition to corporate tax that is tied to the profit that Goldplat would make.

The royalties will be shared between the central government (80 per cent), the county (15 per cent), and the remaining five per cent will go to the local community.

Last year, Kenya earned Sh6.2 billion from the sale of two tonnes of gold from neighbouring countries and artisanal miners.