🕐06.06.12 - 11:54 Uhr

GOLDPLAT - FAIRFAX BUY NOTE TARGET SP 26P - FORECASTED PROFITABILITY FROM GOLD P
RODUCTION OF £4.75M FOR FY 2012 (2011:£3.05M)



[cid:image001.jpg@01CD43CF.8D14E320] FAIRFAX I.S.

PLC, 46 Berkeley Square, Mayfair, London W1J 5AT, United Kingdom www.fairfaxplc.com [cid:image002.jpg@01CD43CF.8D14E320]
Goldplat (GDP LN) 11.75 pence, Mkt Cap �19.7m - Update on Recovery Operations Buy: Target Price 26 pence
* The company have updated on the recovery operations for the second half of 2012. * South African operations - H1 2012 gold production has totalled 7,040 oz and is in line to meet management profit forecasts. * Operational efficiency and profitability has been improved - a fluidised bed incinerator has now been commissioned and is performing well. * The company continue to identify new client opportunities to source high grade material and purchases for stockpiles continue. * The feasibility study is in progress to process the tailings from Goldplat Recoverys own operations. * Due diligence is ongoing on the Central Rand Gold mine opportunity. * Ghanian Gold Recovery (GRG) - Gold production of H1 2012 totalled 8,364 oz and profits are expected to exceed management expectations. * By-product purchases have increased from contracts with Goldfield Ltd, AngloGold Ashanti and Golden Star Resources. * A second fluidised bed incinerator has been ordered to increase capacity. * A second receiving site has been constructed at Adamus where the company have a contract to increase processing capacity. * The company are also investigating the tailings potential from Goldplats brownfield Anumso project in Ghana. * Negotiations to acquire by-products from mines in Mali are ongoing. * Potential New Facility in Burkina Faso: The company has decided to establish a new recovery facility in Burkina Faso under the name of Midas Gold SARL. * A feasibility study is being prepared with respect to establishing this facility. * A site in the vicinity of Goldplats brownfield gold project in Burkina Faso, the Nyieme gold project has been identified. * Approval will be required from government institutions. Conclusion: This is a positive update from the company.

They continue to maintain momentum in the gold recovery business in South African and Ghana.

A number of initiatives previously set out by the company are being acted on.

The company continue to increase the capacity of the recovery business to "high grade" with the commissioning of the fluidised bed incinerator in the South African operations and the purchase of a second fluidised bed incinerator for GRG.

We anticipate an addition of US$1.5m to profits a year over the next 7 years from the carbon stream coming from the incremental capacity from fluidized bed incineration. Importantly the current cash generation from their gold recovery business helps them self-fund their expansion. We forecast profits for the recovery business for the FY 2012 of �4.75m (�2m reported for H1 2012) - a significant growth from �3,054,000 achieved in FY 2011.

We also expect a maiden contribution from the gold mining operation at Kilimapesa of �650,000 (we have adjusted this down from �780,000 to reflect the lower gold price). We continue to see value in the shares and have a target price of 26 pence based on an EV/EBITDA multiple of 5x on the gold recovery business and a value for the gold business of �11m. The company which has a June year end is trading on a PE of 5.3x for 2012 coming down to 3.2x for next year. * Fairfax analysts and sales have visited the Goldplats Benoni facilities in Johannesburg.

Fairfax acts as nomad and broker to Goldplat in the UK [cid:image003.jpg@01CD43CF.8D14E320] DISCLAIMER This note has been issued by Fairfax I.S.

PLC in order to promote its investment services. This information is a marketing communication for the purpose of the European Markets in Financial Instruments Directive (MiFID) and FSAs Rules.

It has not been prepared in accordance with the legal requirements designed to promote the independence or objectivity of investment research. This document is not based upon detailed analysis by Fairfax of any market; issuer or security named herein and does not constitute a formal research recommendation, either expressly or otherwise. The value of investments contained herein may go up or down.

Where investment is made in currencies other than the base currency of the investment, movements in exchange rates will have an effect on the value, either favourable or unfavourable.

Securities issued in emerging markets are typically subject to greater volatility and risk of loss. This [note] is confidential and is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published in whole or in part, for any purpose. Neither the information nor the opinions expressed herein constitutes, or is to be construed as, an offer or invitation or other solicitation or recommendation to buy or sell investments.

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This document should not to be relied upon as authoritative or taken in substitution for the exercise of you own commercial judgment.

Fairfax I.S.

PLC is not responsible for any errors, omissions or for the results obtained from the use of the information in this document. This document has been prepared on the basis of economic data, trading patterns, actual market news and events, and is only valid on the date of publication.

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This document has been prepared by the author based upon information sources believed to be reliable and prepared in good faith. Fairfaxs officers, directors and employees may own or have positions in any investment(s) mentioned herein or related thereto and may, from time to time add to, or dispose of, any such investment(s). Fairfax I.S.

PLC is a company registered in England and Wales with company number 5496355 and whose registered office address is 46, Berkeley Square, Mayfair, London W1J 5AT.

Fairfax I.S.

PLC is authorised and regulated by the Financial Services Authority whose address is 25, The North Colonnade, Canary Wharf, London E14 5HS and is a Member of the London Stock Exchange plc.
Analysts:
Mining John Meyer 7 598 5364 / 0794 303 1001
Carole Ferguson 7 598 5362
Angus Burt 7 460 4397
Sergey Raevskiy 7 598 5372
Renewables Phil Smith 7 460 4386
Equity Trading Suzi Skinner 7 460 4364
Equity Sales Jody Downes 7 460 4375
Richard Parlons 7 598 5367
www.fairfaxplc.com



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