Companies
Goldplat makes Sh209m loss in Migori gold mine
Monday, September 30, 2019 22:00
By VICTOR JUMA
London-based Goldplat made a Sh209.8 million loss before finance costs in its Migori goldmine in the year ended June, widening it by two-thirds from Sh125.9 million a year earlier.
The bigger loss came after the company reduced production and subsequently shut down the mine after it failed to raise new capital needed to run the operation.
Sales at the multinational’s local subsidiary, trading as Kilimapesa Gold Limited, also dropped 36.5 percent to Sh391.7 million from Sh617.3 million.
Performance of Kilimapesa’s operations has been disclosed by Goldplat in a trading update. The multinational says it is still seeking an outside investor to provide new funds to run the Migori goldmine.
“Goldplat is seeking an investment partner for the mine to enable the group realise value from the operation without having to invest additional capital,” Goldplat said.
“A positive development has been the fact that the Kenya Revenue Authority has started refunding some of the company’s VAT claims after the year-end, which had remained unpaid since the time of incorporation.”
Kilimapesa recently received Sh20 million from the taxman as part of the refunds.
The Migori gold mine was put under care and maintenance effective June 1, meaning that production stopped and only a few employees were retained 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.
Gold output at the Migori mine stood at 569 ounces in the three months ended March, down from 1,241 ounces a year earlier. Sales of the precious metal also fell to 639 ounces from 1,380 ounces.
Lack of production at the Migori mine comes amid a rally in the international price of gold, resulting in lost opportunity for the UK firm.
Prices of gold have jumped more than 25 percent over the past 12 months to reach highs of $1,528 (Sh157,000) per ounce as global investors rushed to the precious metal as yields on more government and corporate bonds turn negative.
