Report

United African Prospectors

Financial Results for Y2018

United African Prospectors has today released its consolidated financial results for 12 months ended 20 December 2018.

Key highlights:

• Total gold sales volumes of 4130 ounces, up 6.4% compared to year 2017. This includes all the gold produced by The Dreadger.
• Total jewel sales revenue of $1.1 million, down 2% compared to 2017. This includes jewels produced at Pelmadulla Nilmaenik. The downfall in production was caused by unexpected weather conditions at mining site in Q2 2018. 
• Revenue of $7.2 million, up 28.5% compared to 2017, driven by the start of a successful investment campaign, along with a slight rise of gold price at market. UAP’s revenue includes sales from Dreadger and Pelmadulla Nilmaenik, along with money acquired through crowdfunding campaigns.
• Company’s TCC remained flat at $338 per ounce. This figure represents The Dreadger’s TCC, as Company’s only operational gold mining site at this moment. 
• Adjusted EBITDA was $5.1 million, up 37% compared to 2017, driven by a increase in investments attracted for the period of 2018. 
• Gross profit for the period is $4.22 million, up 3.4% compared to 2017. This figure includes the products from Dreadger site and Pelmadulla Nilmaenik.
• Net profit for the period was $1.5 million, down 1.2%. This was caused by a large increase of capex figures in 2018.
• Capital expenditures (“CAPEX”) were $2.71 million, an uprise on the previous year, reflecting higher expenditures on the equipment purchased and constructions completed in Rufunza, Zambia.
• Net Debt completely paid off, due to UAP’s transition to a crowdfunding investment model.

Amanam Thampithurai, Chief Executive Officer of United African Prospectors, commented:

“United African Prospectors have again demonstrated solid performance in the reporting period. 

Our revenue showed a 28% growth, that allowed Prospectors to completely pay the debts off and will turn the profits for following years up. 

We have delivered significant growth in EBITDA in the year. Our total cash costs remain at the $338 per ounce, maintaining the status of one of the lowest-cost gold producers. And though the capital expenditures show an uprise, we manage the profits on the same level. 

This became possible by a rather experimental and radical investment strategy that we have chosen as a way to develop further. Crowdfunding campaign has delivered more than $1.6 million of revenue, proving the fact that community can be a force powerful enough to compete with corporative machines. Investments gained as a result became expenses to purchase the equipment and construct a modern processing unit, which was stated to be one of the most ecological units in Africa. As we make further steps into the future, we will create more appealing opportunities for investors, in order to increase the amount of equipment purchased in shorter terms. Right now, we’re working on a campaign that will allow us to start the production in Zambia early in Spring, raising profits right from the period start.

With such a dedicated community that we have gathered, United African Prospectors will meet a goal of doubling the revenue in 2019.”

Total Cash Costs

The Company’s TCC remained flat at 338$ per ounce compared to 2017. This figure represents the Dreadger, as company’s only operating mine. For 2019, as UAP starts production at Rufunsa Exploration Project, overall TCC will show a rise, because of the higher TCC for pit mining. But also it will strongly increase the revenue and profits, as volumes of gold produced will grow exponentially.

CAPEX

Capital expenditures increased to $2.71 million, from $1.80 million in 2017.

Capital expenditures at Pelmadulla Nilmaenik remained the same, staying at $0.16 million.

Capex at The Dreadger decreased to $0.45 million, from $1.3 million, respectively, as the Company completed the purchasing phase and now only include the maintenance costs for the dredging unit.

Capital expenditures at Rufunsa Exploration Project increased to $2.1 million dollars as company has finished first phase of construction and geo investigations in the second half. UAP is continuing to expand the mining fleet and waiting forward to start the production in early 2019. Most of the expenses for this project were covered by investments through crowdfunding campaigns, and this will stay a focus in future.