AGM Chairman's Speech

RNS Number : 9588P

GoldBridges Global Resources PLC

11 June 2015

 

11 June 2015

GoldBridges Global Resources plc

("GoldBridges" or the "Company")

AGM Chairman's Speech

AGM at 3pm on 11 June 2015 at 55 Baker Street, London

Ladies and Gentlemen, I extend a warm welcome to all of you from myself and the other Board Members, for taking the time out to attend the meeting of your Company.  

Background

Before I get into the detail of the year in review and recent developments,  I just want to reflect, to show the progress the Company has made since late 2012. That was the point at which the Company effectively came under new management.  Key landmarks have been:

·      A strategic review which led to an overhaul of management and procedures, this has subsequently led to significant cost savings

·      Negotiating and dealing with legacy issues such as the tailings dam leak to ensure that all legal and social obligations were met, but at the same time the element relating to fines was minimised.  Procedures are now in place and still being modified and enhanced to ensure that the issue reoccurring is unlikely.

·      Refocusing the Company cash and resources into projects and investments that will yield significant shareholder value.  In this regard the Company successfully recovered the monies due from Akmola in the year, and invested in the Karasuyskoye Ore Fields adjacent to the Company's current project at Sekisovskoye.

·      Assessing at an early stage how the maximum value for shareholders could be extracted by the Company for the shareholders.  A key component of this was obtaining an independent Competent Persons Report to give an indication of the resources that were potentially available.

·      Finally repositioning the Company's image and profile by a change of name and obtaining admission to the main market of the London Stock Exchange by standard listing. 

The picture I hope that is coming through is a positive one - with a good management team who are competent, focused and keen to drive the business forward.

Moving on to the year in question…

Current year

As indicated above, the two year period was needed to deal with the matters at hand, stabilise the business, and assess the strengths of the business which included mining resources, people and the capital structure.  We are now in the next stage of development.

·      I am sure you have reviewed  the Annual Report, so I just want to pick out some key figures:

o  In the current year the focus has been on the development of the underground mine and assessing the best way forward.  A considerable amount was spent in development of the underground mine, tunnelling, drilling, excavation works and infrastructure - in cash terms £26m.  In 2016 this is expected to ramp up as the underground mine is developed - Ken Crichton, who I am pleased to say was appointed as Technical Director will expand on this in his presentation and will cover future timings in relation to the development plans.

o  Turnover decreased - in common with many other businesses the price of gold had a direct impact on revenues and profits.  Our view is that the gold price will remain in the $1,200 range for the foreseeable future, but given our future plans and expected cash costs, we do not see further reductions impacting the economic viability of projects at present.

o  Cash resources are sufficient for current operating and financing needs and we are currently repaying our borrowings from EBRD under the current agreed facility.

·      As you are aware from the Annual Report, the Company is winding down the operations from the open pit and moving production to where significant value lies in the underground mine, as shown in the CPR.  As indicated above, a considerable amount of time and expense was incurred in 2014 and 2015 in order to develop access to mining stopes and different ore bodies. This investment is expected to benefit the Company in the near future.

·      It is important that the next steps in the development plans are taken carefully and are duly considered. We hope to announce the way forward very shortly, and we thank you for your patience in this regard. 

Outlook and Conclusion  

I strongly believe that we now enjoy a robust foundation that will support significant growth in the future. The value to shareholders will come from the development of the high grade ore from the underground mine.  The Company's operations have been rationalised and are efficient to enable us to achieve a good profit from gold production moving forward.

In addition to the Sekisovskoye deposit, the Company is still progressing the Karasuyskoye project, were we believe there is significant shareholder value yet to be factored into the Company's fortunes.   We are expecting the final permitting to be concluded later in the year, at which point the Company will move forward with a detailed CPR.

I am of course not pleased (as you are not) with the current share price.  However, we see the share price improving in the long-term and do not feel that the current share price reflects the true value of the Company. 

Finally I would like to thank our shareholders, advisers and employees for all their hard work, I will now hand you across to Ken who will give a short presentation and will then chair a Q and A session.

For further information please contact:

GoldBridges Global Resources Plc

Louise Wrathall [phone]

Strand Hanson (Financial Adviser and Joint Broker)

Andrew Emmott / James Spinney / Ritchie Balmer [phone]

Cantor Fitzgerald Europe (Joint Broker)

Stewart Dickson / Jeremy Stephenson [phone]

Bell Pottinger (Financial PR)

Daniel Thole / Marianna Bowes / Richard Crowley [phone]

Information on the Company

The Company is a gold mining, exploration and development group based in Kazakhstan. Whilst the Company was initially established to develop and operate the Sekisovskoye gold and silver mine in the East Kazakhstan Region, it is now actively targeting additional gold mining opportunities in Kazakhstan, including the prospective Karasuyskoye ore field which adjoins the Sekisovskoye deposit.

The Company's principal assets is the exclusive right to explore and extract gold and silver ore from the Sekisovskoye deposit in the Glubokovsky District of the East Kazakhstan Region, and the potential to develop the Karasuyskoye ore fields. The Company holds a 100 per cent shareholding in DTOO Gornorudnoe Predpriatie Sekisovskoye ("DGPS") which holds a subsoil use contract in relation to the Sekisovskoye deposit, covering a total area of 0.855km². The subsoil use contract is valid until 2020 and the Company currently intends to seek to extend the contract in accordance with its terms. The Company also holds a 100% shareholding in DTOO Altai Ken-Bayitu LLP which owns and operates the processing plant at the Sekisovskoye deposit. The Sekisovskoye deposit is located at the village of Sekisovka, approximately 40km north of the town of Ust-Kamenogorsk, the capital city of the East Kazakhstan Region. The current operation is exploiting two open pits where the near-vertical deposits extend to the surface. The open pits are nearing their end of life in 2015, and the Company is developing an underground extension to exploit the deposits to depth. The Company intends that the Sekisovskoye deposit shall become a selective-mining underground operation.

The Company produced approximately 30,669oz of gold and 34,902oz of silver in the year ended 31 December 2013 and 32,994oz of gold and 41,390oz of silver in the year ended 31 December 2014.

As at 31 May 2014, the Company's proven and probable reserves consisted of 2.3Moz of gold and 3.0Moz of silver, and the Company's measured, indicated and inferred resources consisted of 5.1Moz of gold and 3.5Moz of silver, in each case as classified in accordance with JORC.

In the year ended 31 December 2013, the Company's consolidated revenue was $42.4 million and its EBITDA was US$(0.6) million. In the six months ended 30 June 2014, the Company's consolidated revenue was US$16.7 million and its EBITDA was US$5.9 million.

Further details can be found in the Company's website www.goldbridgesplc.com

 

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