WHI Securities Natural Resources Comment
Goldplat* (GDP.L) - BUY
Operational Update
Event
Goldplat has provided an operational update and it confirms that the company is progressing toward a major extensional exploration campaign which has the potential to significantly expand the companies JORC compliant mining resource base. As we said in a note of 7 March 2011 ?These projects all show scope for promising extensional exploration and we fully expect significant resource additions will be made in the periods ahead?.
Implications
The campaign at Kilimapesa (Kenyan gold mine) is expected to commence May 2011 and include 28 diamond drill holes, with the aim of increasing the JORC compliant resource to over 500,000 oz from the current 129,000 oz. Given our understanding of the regions mineralisation system we anticipate this is a highly achievable target. Phase 1 of this program is expected to last six weeks.
The Kilimapesa metallurgical plant started processing existing stocks in February 2011 and an elution plant and smelter that have been ordered are due for commissioning in July 2011. At that point it is expected Kilimapesa will produce first bullion for export.
At the Nyieme Gold Project (Burkina Faso) a 2,500m reverse circulation drilling campaign is expected to commence April 25 with first results expected July 2011. This campaign is to follow up previous soil sampling and trenching campaigns and one of the targets is a 2m thick vein which hosts artisanal workings. Goldplat is aiming for a significant uplift in resources at Nyieme.
The acquisition of Banka Gold Project (Ghana) in the Ashanti region (for which Goldplat has entered into a binding memorandum) is progressing and the company will update shareholders in due course.
Investment Opinion
Goldplat is making further progress toward adding significant mining assets to its portfolio. This, coupled with its long history of profitability and increasing geographic diversity is the reason behind our upgrading to Speculative Buy to BUY
WHI Securities Research Team
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