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Goldplat: An Inside Look

ByEdison
Published 04/24/2013, 02:15 PM
Updated 07/09/2023, 06:31 AM
BEE Transaction Highlights Value

Goldplat has announced that its South African gold recovery subsidiary, GPL, has signed a binding agreement for its BEE partner, Amabubesi, to increase its stake from 15% to 26%, achieving full compliance with South African BEE legislation well in advance of the May 2014 deadline. The £16.0m implied value of Goldplat’s residual 74% interest in GPL plus consideration represents 95% of Goldplat’s current market cap. We forecast that GPL will contribute 40% of Goldplat’s FY14 attributable profit.
Goldplat
Goldplat has announced that its South African gold recovery subsidiary, Goldplat Recovery (Pty) Limited (GPL), has signed a binding Memorandum of Agreement (MoA) with its Black Economic Empowerment (BEE) partner, Amabubesi. This will increase Amabubesi’s interest in GPL from 15% to 26%, as required by the South African BEE legislation, well in advance of the May 2014 deadline.

The terms of the MoA will see Amabubesi acquire a final 11% interest in GPL for a total consideration of ZAR29.5m (£2.1m), with a 10% upfront cash payment on completion. The remaining 90% will be vendor financed by GPL, with Amabubesi repaying the loan using its pro-rata dividends.

This transaction values Goldplat’s residual 74% interest in GPL at £14.2m, or 8.4p per share. We estimate the NPV10 value of the loan repayments, based on Amabubesi’s 26% share of GPL’s forecast net profits at £1.6m, which, in addition to the £0.2m upfront cash payment, represents 1.1p per share. The £16.0m implied value of the residual interest plus consideration represents 95% of Goldplat’s current market cap. Based on a 74% interest, we forecast that GPL will contribute 40% of Goldplat’s FY14 attributable profit.

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