🕐24.04.13 - 17:27 Uhr

GOLDPLAT - VSA BUY NOTE 105% INCREASE TARGET PRICE OF 21P ON THE BACK OF SIGNING
BEE PARTNER FOR SOUTH AFRICAN RECOVERY OPERATION VALUING IT AT £19.2M



Hi there, Please see attached VSA research note on the back of Goldplat South African gold recovery operation ‘Goldplat Recovery SA’ signing a MoU with its Black Economic Empowerment partner making them 100% BEE compliant ahead of the May 2014 deadline. The transaction values Goldplat recovery operation at ZAR268.2m (£19.2m), £16.3m of which is attributed to Goldplat at its current 85% ownership.

This is c96% of the company’s current market cap.

As Goldplat Recovery SA contributed to less rthan 50% of the Company’s net profit for FY 2012 – This highlights the inherent value upside of Goldplat as a whole.

With a 5.0x EV/EBITDA for the gold recovery business and the £4.8m effective cash position.

VSA has valued Goldplat at £34.4m, which equates to a 21.0p target price.

BUY Kindest regards Felicity Goldplat plc BEE Partnership Agreement Signed Goldplat’s 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 Property Holdings (Pty) Ltd.

The effect of the agreement is to increase Amabubesi’s interest in GPL from 15% to 26%, as required by the South African BEE legislation which is to be in place before 1 May 2014. Deal Values GPL at c96% of Goldplat’s Market Cap For the additional 11%, Amabubesi will pay ZAR29.5m (£2.1m), comprising a 10% upfront cash payment on completion, with the remainder financed by a loan from GPL.

Amabubesi is to repay the loan using its pro-rata dividends.

On our financial forecasts, this loan should be repaid in full before the end of 2014. The transaction values GPL at ZAR268.2m (£19.2m), £16.3m of which is attributed to Goldplat at its current 85% ownership.

This is c96% of the company’s current market cap. As Goldplat’s CEO, Russell Lamming, pointed out, considering that GPL contributed less than 50% of the group net profit in the last financial year, “this highlights the inherent value of Goldplat as a whole”. Valuation Methodology Maintained We maintain our valuation methodology, however, which means that our valuation remains unchanged.

This 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. Recommendation and Price Target We maintain our BUY recommendation and our share price target of 21p. 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. Jessica Pendal, Mining Analyst | T: +44 (0)20 3005 5016 | E: Dr Dougie Youngson, Head of Research | T: +44 (0)20 3617 5184 | E: VSA Capital Research | T: +44 (0)20 3005 5000 | E: VSA Capital Limited, New Liverpool House, 15-17 Eldon Street, London EC2M 7LD | www.vsacapital.com [cid:d00c79f380647ef9cd84b385a6992a01] VSA Capital Limited is Authorised and Regulated by the Financial Conduct Authority and is a member of the London Stock Exchange. This email is intended solely for the named recipient.

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