London-based Goldplat Plc is fighting an application by a rival mining firm to explore for gold in its Kenyan turf of Migori that is estimated to have reserves worth Sh16.9 billion.
Goldplat, which operates in Kenya through its subsidiary Kilimapesa Gold, said the dispute has been simmering since October 2017, when the Ministry of Mining notified it of an application by an unnamed company to explore for gold in the same area.
Goldplat, in a trading update, told its London Stock Exchange (LSE) investors that it is prepared to sue the Kenyan government if any part of its exploration zone is hived off without compensation.
“The area in dispute contains roughly 140,000 ounces of gold in resource, or approximately 20 per cent of the total resource for Kilimapesa,” Goldplat said, adding that “no exploration will be undertaken until this issue has been resolved and confirmation has been received that no part of the initial exploration licence has been taken away without compensation.”
Goldplat says the status of the controversial exploration application remains unclear despite its clear objection and numerous meetings with Mining secretary John Munyes and other government officials.
Goldplat’s operations in South Western Kenya include the Kilimapesa Hill – an area not targeted by the rival mining firm — where it is currently mining gold reserves estimated at 532,000 ounces and valued at Sh64.4 billion based on the commodity’s current global market price of $1,200 (Sh120,000) an ounce.
The dispute comes at a time when Goldplat is also awaiting a decision on its application for an exploration licence that will allow it to expand its operations beyond the Kilimapesa Hill.
The rival application risks spooking prospective investors who Goldplat has approached to inject new capital in Kilimapesa in exchange for an unspecified stake in the Kenyan operation.
Goldplat says the expected proceeds will enable it to share the burden of providing new capital required to turn around the fortunes of the loss-making subsidiary.
“But if efforts to find a partner to invest in the mine and the exploration licence are successful, the requirement for any more capital input by the Group will be removed,” the company said.
Goldplat has further disclosed that its board approved the search for an investment partner for Kilimapesa to enable existing shareholders realise value from the operation without having to invest additional capital. “Discussions have begun with a number of interested parties and operational focus remains on achieving profitable production.”
Kilimapesa has been making losses mainly arising from production hiccups, cost overruns and slow investment in new equipment, weighing down its parent company’s consolidated earnings. The Kenyan operation reported a net loss of £892,000 (Sh118.3 million) in the year ended June, an improvement from net losses of £1.1 million (Sh146 million) the year before.
The firm narrowed its losses after production jumped 50 per cent to 5,112 ounces, all of which were sold in the review period resulting in higher revenue.
“Kilimapesa reported an increase in revenue of 54 per cent from £3.1 million (Sh418 million) as a result of more ounces produced on the back of increased processing capacity in Plant 2,” Goldplat said. “The increase in revenue did not translate into increased profits due to lower than expected grades and higher than expected costs,” the miner added.
The multinational says it will continue to invest in the mine to boost production and improve efficiencies as it seeks to turn a profit.
Its capital expenditure at Kilimapesa stood at £489,000 (Sh64.8 million) in the year ended June, with the amount used to buy a ball mill and power generators among other equipment. The price of gold per ounce has dropped 11.8 per cent from a peak of $1,362 (Sh136,200) in January to yesterday’s $1,200 (Sh120,000), piling pressure on miners of the precious metal.
Gold producers recorded a boom in September 2011 when the commodity’s price touched highs of $1,833 (Sh188,000) per ounce as investors rushed to buy the metal as a safe haven in the aftermath of the global financial crisis, which eroded the value of currency-based assets.
World Bank pushes G-20 to extend debt relief to 2021
World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.
“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.
He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.
The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.
People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.
For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.
Debt burdens, already unsustainable for many countries, are rising to crisis levels.
“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.
Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans
The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.
“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”
According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.
Tighter Reins on Platforms for Mobile Loans
The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.
Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.
Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.
Scope Markets Kenya customers to have instant access to global financial markets
NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options.
This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.
The Scope Markets app offers clients over 500 investment opportunities across global financial markets.
The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.
The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).
The platform also offers an enhanced client interface including catering for those who trade at night.
The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour; Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).
The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.
Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”
He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.