Goldplat: an intelligent gold gamble
Article Date: Feb 27 2009Goldplat: an intelligent gold gamble
Investors looking for an astute gold gamble might investigate South African tiddler Goldplat, which extracts precious metals from mining industry by-products and grew first half pre-tax profits by an impressive 92 per cent to £1.2 million.
Valued on AIM at £13.7 million at today’s 12.25p, the company, chaired by the entrepreneurial Brian Moritz and with Demetri Manolis in the chief executive’s hot seat, increased turnover by 74 per cent to £5.2 million in the six months to December.
It has secured further stockpiles from which to extract gold and platinum group metals and says it now has stocks containing 44,050 oz of gold.
Goldplat, which sold 15 per cent of its South African subsidiary Goldplat Recovery to a Black Economic Empowerment partner for £1 million, says its recovery plants in South Africa and Ghana continue to perform ‘buoyantly’. Last month, the group began gold mining itself at Kilimapesa in Kenya, where it argues production should fund the development of the mine.
Floated at 7.5p in 2006, Goldplat shares reached 17.25p in late 2007 and at current levels, boast a good degree of gamblers’ appeal.
Aussie gold group gathers momentum
A second play on gold is the slightly larger Aussie counter Allied Gold, which has raised A$30.75 million (£13.6 million) at 50 cents or 22p a share for its Simberi gold project in Papua New Guinea.
The company says it will use the proceeds to retire initial Simberi debt early, while a feasibility study assesses the economics of taking production there to 100,000 oz a year from sulphide gold deposits.
Allied, which expects to produce 20,000 oz for the first quarter of this year, reckons the project holds more than 1.8 million oz of measured, indicated and inferred resources, but the study will focus initially on high-grade deposits within Simberi at Pigiput Ridge.
Commanding an £82 million price tag in London, the company sees production from oxide gold deposits of 80,000 oz a year, taking the combined annual target to 180,000 oz.
Allied shares, which dropped from 46.25p to only 8.75p between autumn 2007 and last October, have since rallied to 22p and could go further if momentum is maintained.
Emerging Metals ups Kalahari stake
Mining entrepreneur Stephen Dattels’ Emerging Metals has increased its holding in our August 2007 tip Kalahari Minerals from 7.5 to 8.8 per cent.
Emerging Metals has entered a crowded arena, in which beleaguered mining giant Rio Tinto has taken bigger chunks of Kalahari, attracted by its indirect holding in the Rossing South uranium deposit in Namibia’s Husab uranium project.
Rio Tinto, owner of the long-standing Rossing uranium mine next door, has built up a near 16 per cent stake in Kalahari, and another AIM concern, Niger Uranium, has a similar holding.
Kalahari holds its Rossing stake through its 40.6 per cent interest in Aussie-quoted Extract Resources. Rio has more than 14 per cent of Extract, and Kalahari’s board is concerned to prevent de facto control of the project slipping to Rio without a full bid.
At the current 72p price, shares in Kalahari, first flagged up here at 26.25p, are healthily above our original recommendation level and are well worth holding.
Growth on offer from office2office
There was some strong news flow this week from procurement specialist office2office, known as o2o and tipped here at 147.5p a year ago, which helped the shares reclaim some of the considerable ground lost since they hit a 195p peak in May.
As well as announcing that it has ‘secured significant new business with the Ministry of Justice’, the fully listed group revealed that the NHS had renewed its supply agreement for a further four years, increasing its orders to £40 million since the year-end.
Furthermore, office2office’s results for 2008 proved eye-catching fare, with sales, profits, earnings and the dividend all increased year-on-year.
Management said margins had held up well, given market conditions, and that following acquisitions and a bout of restructuring, the business is ‘now better positioned to drive forward its business with a more comprehensive range of products and services and a wider customer base’.
The shares, which have rebounded to 77p after falling to a recent low of 52.25p, retain their potential and are not to be sold. Sit tight.
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