UK mining firm Goldplat has quit production of gold and shut down its mine in Narok County after it failed to secure a strategic investor to pump money into the loss-making operation.
The firm said in a statement yesterday it would put the mine under care and maintenance, which means that there will be minimal activity at the site until a strategic investor is found.
Goldplat had in January this year said it was in talks with investors that have expressed interest in putting in money at the mine. It expected to unveil the new investors that it would work with at KilimaPesa in March.
Yesterday’s statement indicated that the talks with the investors had not borne fruit. The suspension of operations could see staff lose their jobs or go without pay for the coming months.
“Goldplat… announces that KilimaPesa Gold operations have been put on care and maintenance,” said the update to shareholders.
“Goldplat will continue to engage with the stakeholders of KPG, including large creditors and employees, whilst seeking the external funding required to develop the operations.
The company said it had received substantial support from a number of the engaged stakeholders, who committed to not demand payment from KPG in the next six months.
Earlier this year, the firm said gold production for its Kenyan mine had dropped 23 per cent in the six months to December last year.
It produced 2,058 ounces of gold over the period, compared to 2,681 ounces during a similar period in 2017.
It added that the drop in production had seen the mine continue to make losses.
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The firm added that despite its woes, it was among the firms that are owed billions by the Kenya Revenue Authority (KRA) in tax refunds. It said KRA owes it more than Sh127 million.
In an interview with The Standard, Goldplat Chief Executive Werner Klingenberg however said the company was not walking away from KilimaPesa, and that the mine was still a good asset that is undercapitalised.
“We are not walking away from KilimaPesa. We have been engaging in talks with employees, creditors, KRA and stakehodlers since Monday. We are looking for additional funding,” he said.
The Saturday Standard independently established that the company owed its suppliers millions of shillings.
“The company has engaged with KRA to discuss the payment of Goldplat’s value-added tax claims, with a cumulative value in excess of a £1 million.
Although KRA acknowledges the validity of a material part of the claim, no repayments have been made to date,” said Goldplat.
“In addition, the company continues to hold talks with a number of parties interested in investing in KPG and will update the market once enough progress has been made in the discussions.”