Goldplat to sell Kenya’s Kilimapesa Gold mine

Goldplat plc, a gold producer with international gold recovery operations located in South Africa and Ghana and an underground mining operation in Kenya, has announced the signing of a binding term sheet between its subsidiary Gold Mineral Resources Pty Limited (GMR) and Mayflower Capital Investments Pty Limited for the sale of Kilimapesa Gold. Kilimapesa owns the assets and licences of the Kenyan underground mining operation.

Under the binding term sheet GMR has conditionally agreed to sell Kilimapesa to Mayflower for USD1,500,000 by the issue of shares to that value in Mayflower. In addition, GMR is entitled to receive a 1% net smelter royalty on future production from Kilimapesa capped at USD1,500,000.

Mayflower has separately entered into an agreement under which it will assign its rights and obligations to complete the acquisition and raise a minimum USD4,000,000 of funding for the development of Kilimapesa’s operations.

GMR is supportive of Mayflower’s plans and strategies for the Kilimapesa operations and has agreed to escrow its shares in Mayflower/UKco for a minimum 12 months period, whilst Mayflower completes the recapitalisation and recommencement of the gold mining and processing operations.

The term sheet is subject to a number of conditions precedent including the completion of due diligence to be conducted by both Mayflower and GMR, the receipt of all necessary approvals, the finalising of formal agreements and the raising of equity by UKco of USD4,000,000.

Mayflower is paying a UD50,000 non-refundable exclusivity fee under the binding term sheet. Unless otherwise agreed by the parties, the formal agreements envisaged in the term sheet must be entered into before 30 September 2020.

In the interim, and in addition to the considerations above, GMR and Mayflower have agreed that Mayflower will invest up to USD300,000 and GMR up to USD150,000 into Kilimapesa as a loan to restart the treatment of artisanal tailings at Kilimapesa’s processing plant. The loan will be unsecured and interest free and repayable out of profits generated from tailings processing after payment of current and historical creditors.

Mayflower is a mining focused corporate investment and management company registered in Australia with key representatives and offices in London, Johannesburg and Perth. Its management team comprises geologists, mining engineers and metallurgists as well as mining finance and investment banking executives with experience and proven track records in successfully developing and operating mining projects throughout Africa.

Mayflower has already established a senior technical and corporate management team in South Africa, Kenya and UK and secured funding support in the UK, which upon completion of the transaction will allow Mayflower to implement the re-commencement and optimisation of operations at Kilimapesa with a view of expanding gold mining operations and production in the short-term .

Kilimapesa owns a gold mining license and a gold exploration license in Kenya and undertakes a small amount or tailings reprocessing although as announced on 28 July 2020, its activities in Kenya are currently under care and maintenance. On conclusion of the transaction, all losses and costs associated with Kilimapesa will cease to be borne by the Goldplat Group.

As indicated to the market it has been our intention to divest from our interests in mining and I am delighted to have entered into this term sheet with Mayflower. Mayflower already has a team in place in Kenya and with financing, I believe, has the ability to extract significant value from the tenements under the control of Kilimapesa. Through its shareholding in Mayflower, Goldplat can continue to benefit from the development of Kilimapesa without being required to provide further finance or management resources,” said Werner Klingenberg, CEO of Goldplat.

Goldplat plc is an AIM-listed, profitable gold recovery services company with two market leading operations in South Africa and Ghana. The Company also has a small gold mining and exploration portfolio in Kenya, Ghana and Burkina Faso.

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