🕐04.03.13 - 16:54 Uhr

GOLDPLAT PLC - VSA RESEARCH - BUY PRICE TARGET 21P - PROFITABLE AND GROWING NICHE GOLD PLAYER



Goldplat plc# Profitable and Growing Niche Player Gold Recovery - Market Leader Goldplat is Africa’s leading gold recovery business, with profitable cash generating operations in South Africa and Ghana.

The company plans to expand the Ghana facility into a recovery hub for West Africa, with the potential to grow earnings significantly from this region over the next three years.

As a more mature operation, the South African recovery business is expected to grow more modestly. Support Services Business - Perpetuity Model The gold recovery business is more support services than gold mining, and benefits from a perpetuity-type financial model.

Goldplat should continue to operate profitably as long as gold mining exists in the regions in which it operates.

This also has an impact on our valuation methodology.

The two recovery businesses will generate c£5m Group EBITDA per year, with growth in West Africa potentially increasing this further.

Using a multiple of 5.0x EBITDA would value Goldplat’s recovery businesses at c£26m, with potential upside following successful Ghana/West Africa expansion. Gold Mining - Targeting Mid-Sized Projects Goldplat has a small gold mine in Kenya called Kilimapesa, with production expected at c5Koz per annum, but it is targeting larger gold projects with a minimum 30Koz per year potential.

Its strong balance sheet puts it in a position to fund acquisition or exploration and development programmes.

This advantage is even more material given the difficult funding environment facing most junior mine explorers. Valuation and Recommendation Our valuation is dominated by 5.0x EV/EBITDA for the recovery business and the £4.8m effective cash position.

We value Goldplat at £34.4m, which equates to a 21.0p target price.

We initiate coverage with a BUY recommendation. For charts and disclosures, please see the attached .pdf file. #Indicates VSA house stock. Click unsubscribe if you wish to be removed from our distribution list. Dr Dougie Youngson, Head of Research | T: +44 (0)20 3617 5184 | E: VSA Capital Limited, New Liverpool House, 15-17 Eldon Street, London EC2M 7LD | www.vsacapital.com [cid:05b5be3651267634dcb07a5604ae1e73] VSA Capital Limited is Authorised and Regulated by the Financial Services Authority and is a member of the London Stock Exchange. This email is intended solely for the named recipient.

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