Goldplat Plc says the decision will enable it to share the burden of providing new capital required to turn around the subsidiary’s fortunes.
The firm says prospective investors made numerous visits to Kilimapesa in the quarter ending June, adding that this is the start of the process to eventually get an investor on board.
London-based Goldplat Plc is set to sell a stake in its loss-making Kenyan subsidiary Kilimapesa Gold Limited (KPG), which operates a mine in Migori.
The multinational, which did not specify the stake it will cede and the expected proceeds, says the decision will enable it to share the burden of providing new capital required to turn around the subsidiary’s fortunes.
“The board of Goldplat has approved a process to seek an investment partner for KPG so as to enable existing shareholders to realise value from the operation without having to invest any more capital,” Goldplat said in a trading update.
“Although discussions in this regard have begun with a number of interested parties, the focus remains on getting Kilimapesa to produce profitably in the short-term.”
Goldplat says prospective investors made numerous visits to Kilimapesa in the quarter ending June, adding that this is the start of the process to eventually get an investor on board.
The local operation has been making losses on the back of production hiccups, cost overruns and slow investment in new equipment, weighing down its parent company’s consolidated earnings.
“Goldplat is pleased to announce that consolidated profit before tax for the company is expected to be in line with market expectations for full year (to June) 2018, notwithstanding the fact that Kilimapesa Gold Limited ('KPG') had a poor final quarter financially, which is expected to result in a similar loss to that of FY 2017 at the mine,” the multinational said.
“The company expects to publish its annual financial results in September 2018.”
Production of gold at Kilimapesa rose 50 per cent to 159 kilogrammes in the year ended June, raising the value of its exports 59 per cent to Sh624.6 million based on current exchange rates and the commodity’s price in the international market.
The Kenyan operation is set to acquire a new compressor and two extra Bob Cats as part of efforts to boost its production.
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