Companies

Goldplat cuts loss in Migori mine

gold

A gold bearing rock. FILE PHOTO | NMG

London-based Goldplat Plc narrowed operating losses in its Migori goldmine by nearly two-thirds to Sh16.8 million in the quarter ended September.

Its local operations, owned through Kilimapesa Gold, had reported a loss of Sh46.6 million in similar period last year.

The multinational says in a trading update that the mine remains closed, meaning that lack of commercial production has gone on for five months.

“The mine remains on care and maintenance; mining has ceased and we are only incurring costs on security at the mining sites to safeguard our assets,” Goldplat said in a statement.

Placing a mine under maintenance means that production stops and only a few employees are retained to make sure the site remains safe and stable.

The plan is to ensure that future production can resume quickly and more efficiently. Goldplat says it is meeting part of the costs of maintaining the mine through small-scale gold production.

“To reduce the cash costs of care and maintenance and to support the local community while we seek an investment partner, we are processing batches of artisanal material, which we will continue to do whilst it makes a cash contribution to the care and maintenance costs,” the company said.

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Goldplat says it has received cumulative value added tax (VAT) refunds of £345,000 (Sh45.8 million) from the Kenya Revenue Authority, with the cash used to reduce its debt.

The multinational stopped commercial production at the Migori mine after it failed to raise the capital needed to run the operation.

Goldplat, which says it will not provide its own capital to fund the business, has so far been unsuccessful in getting an investor to inject new funds.

Lack of production at the mine comes amid a significant rally in the international price over the past year, resulting in lost opportunity for the UK firm.