Jobs on the line as firm says it will only continue gold production if it can get partner to inject additional capital.
London-based Goldplat has threatened to shut down its Migori goldmine once again, putting workers’ jobs on the line besides the government losing out on royalties.
The multinational, which operates locally though its subsidiary Kilimapesa Gold Limited, says it will only continue gold production if it can get a partner to provide additional capital to the project by the end of this month.
Goldplat in 2013 shut down operations at the plant and sacked more than 50 employees in what it attributed to losses caused by production problems and low gold prices in the international markets at the time. “A decision has been made to put Kilimapesa mine on care and maintenance if a suitable partner for the required expansion is not found by the end of November 2018,” Goldplat said in a trading update.
“There has been good progress in finding the funds necessary to expand production to a sustainably profitable level, which would require no further funding from the group.”
When a mine is placed under care and maintenance, production stops and only a few employees are needed to make sure the site remains in a safe and stable condition. The plan is to ensure that future production can resume quickly and more efficiently.
Kilimapesa sold gold worth Sh138.5 million in the quarter ended September, down 9.3 per cent from Sh152.8 million a year earlier. Gold production fell 17.1 per cent to 1,201 ounces in the same period.
Goldplat says it has applied for a renewal of its exploration permit amid a dispute over the government’s award of a gold prospecting licence to Chinese firm Bao Gold Hill (Kenya) Limited in an area claimed by the UK firm.
Goldplat says it has the right to prospect for the precious metal in bloc 91B covering 63.7 square kilometres, part of which was handed to Bao in August.
The area awarded to Bao is in the shape of a square at the lower end of the larger zone claimed by Goldplat, according to a mineral resource map seen by Business Daily. Bao’s special prospecting licence is given as PL/2018/0072 and the area is estimated to have gold reserves worth nearly Sh17 billion.
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