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GDO - Gold One International Limited - Quarterly Activities Report - Quarter

Release Date: 17/10/2011 08:11
Code(s): GDO
Wrap Text

GDO - Gold One International Limited - Quarterly Activities Report - Quarter Ended 30 September 2011 Gold One International Limited Registered in Western Australia under the Corporations Act, 2001 (Cth) Registration number ACN: 094 265 746 Registered as an external company in the Republic of South Africa Registration number: 2009/000032/10 Share code on the ASX/JSE: GDO ISIN: AU000000GDO5 OTCQX International: GLDZY ("Gold One" or the "company") Quarterly Activities Report - Quarter Ended 30 September 2011 - Net cash flow from operations increased quarter-on-quarter by 97% to US$ 30.69 million (ZAR 218.7 million) - Cash and gold receivables balance increased quarter-on-quarter by 72% to US$ 43.31 million (ZAR 342.1 million) - Modder East quarterly cash costs of US$ 478/oz - 23% increase in quarterly production to 35,128 ounces, exceeding guidance of 34,000 ounces - 2011 production of 89,827 for the year to date - Gold One takes over daily management of Rand Uranium and initiates Uranium Project review Gold One International Limited is pleased to announce the company`s September 2011 quarter results, which showed a production increase of 23% to 35,128 ounces compared to the previous quarter. The company is on track to meet its 2011 production target of 120,000 ounces, having produced 89,827 ounces for the year so far, commencing the December 2011 quarter some 2,800 ounces ahead of initial guidance. The significant increase in gold production, combined with higher gold prices, resulted in group gold revenue for the quarter under review of US$ 59.72 million (ZAR 425.6 million) while group cash operating costs were US$ 17.86 million (ZAR 127.3 million), resulting in a positive operating cash flow of US$ 41.86 million (ZAR 298.3 million). The cash cost for the group was US$ 478/oz with a total cost* of US$ 744/oz recorded during the quarter. Gold One ended the September 2011 quarter with US$ 43.31 million (ZAR 342.1 million) of cash on hand and gold receivables (including restricted cash of US$ 4.53 million (ZAR 35.8 million). In line with the company`s growth strategy, Gold One made significant headway on both the Rand Uranium acquisition and the Jintu transaction during the September 2011 quarter. Most pleasing was the support received for the Jintu transaction, with more than 60% of the eligible shareholders participating in the vote and over 99% voting in favour of the injection of at least A$ 150 million in new capital into Gold One by way of issue of shares to the consortium. The Rand Uranium acquisition is still subject to the necessary consents being obtained from the Department of Mineral Resources of South Africa, which Gold One is confident of receiving by the end of the year. Following Competition Commission approval, the company recently signed an Interim Management and Funding Agreement with Rand Uranium, facilitating Gold One`s daily management of both the Cooke Underground Operations and the Randfontein Surface Operations. As part of Gold One`s turnaround strategy for Rand Uranium, the Cooke Underground Operations and the Randfontein Surface Operations have been separated into two distinct business units with separate operational and managerial focuses. The clear distinction between underground and surface operations is a critical step in securing appropriate focus and capacity to ensure a successful underground turnaround and surface operational growth. In line with the focuses on the two separate business units Syd Caddy, an existing executive of Gold One and Senior Vice President: Operations, has been appointed to manage the Cooke Underground Operations while Dick Plaistowe, who has recently joined the Gold One Executive as Senior Vice President: Surface Operations, will assume responsibility for the Randfontein Surface Operations. Dick will also be responsible for the Cooke Uranium Project together with Roland Freeman, VP: Engineering, who recently joined Gold One to manage the Uranium Project. Gold One has undertaken an extensive review of the existing feasibility study for the uranium plant that was previously undertaken by Rand Uranium, with a view to commencing uranium production by 2015. External consultants have been appointed to assist with the feasibility review and discussions have also been initiated with international banks to evaluate third party vendor financing for the plant`s construction, which is planned to commence in early 2013. Gold One President and CEO Neal Froneman comments: "With the excellent production output from Modder East and continued increasing operational flexibility, the company has continued to build on the solid foundation that it has established throughout this year. For the December 2011 quarter, 33,000 ounces of gold production is being targeted, which will result in the achievement of our annual gold production target of 120,000 ounces. I am also delighted that Gold One is now able to play an increasingly active role in the daily management of the Cooke Operations. We have ensured that the company has adequate high quality expertise to progress the Uranium Project without detracting from the focus required at the existing underground Cooke Operations". *Total cost refers to the sum of the cash cost, depreciation and royalties. Capital expenditure, finance costs and corporate costs are excluded from total cost. Issued by Gold One International Limited www.gold1.co.za Neal Froneman President and CEO +27 11 726 1047 (office) +27 83 628 0226 (mobile) neal.froneman@gold1.co.za Ilja Graulich Investor Relations +27 11 726 1047 (office) +27 83 604 0820 (mobile) ilja.graulich@gold1.co.za Carol Smith Investor Relations +27 11 726 1047 (office) +27 82 338 2228 (mobile) carol.smith@gold1.co.za Derek Besier Farrington National Sydney +61 2 9332 4448 (office) +61 421 768 224 (mobile) derek.besier@farrington.com.au About Gold One Gold One is a gold producer listed on the financial markets operated by the ASX Limited and the JSE Limited, issuer code GDO. Its flagship operation is the newly built shallow Modder East mine on the East Rand, some 30 kilometres from Johannesburg. Modder East is the first new mine to be built in the region in 28 years and distinguishes itself from most of the other gold mines in South Africa owing to its shallow nature (300 metres to 500 metres below surface). To date Modder East has provided direct employment opportunities for over 1,500 people. Gold One also owns the nearby existing Sub Nigel mine, which was until recently used primarily as a training centre in the build-up of Modder East to full production. Gold One`s other projects and targets include Ventersburg in the Free State Goldfields, the Tulo concession in Mozambique and the Etendeka greenfield project in Namibia. This news release does not constitute investment advice. Neither this news release nor the information contained in it constitutes an offer, invitation, solicitation or recommendation in relation to the purchase or sale of securities in any jurisdiction. Forward-Looking Statement This release includes certain forward-looking statements and forward-looking information. All statements other than statements of historical fact included in this release including, without limitation, statements regarding future plans and objectives of Gold One International Limited are forward-looking statements (or forward-looking information) that involve various risks, assumptions and uncertainties. There can be no assurance that such statements will prove to be accurate and actual values, results and future events could differ materially from those anticipated in such statements. Important factors could cause actual results to differ materially from Gold One`s expectations. Such factors include, among others: the actual results of exploration activities; actual results of reclamation activities; the estimation or realisation of mineral reserves and resources; the timing and amount of estimated future production; costs of production; capital expenditures; costs and timing of the development of Modder East and new deposits; availability of capital required to place Gold One`s properties into production; the ability to obtain or maintain a listing in South Africa, Australia, Europe or North America; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of gold and other commodities; possible variations in ore grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents; labour disputes and other risks of the mining industry; delays in obtaining governmental approvals, permits or financing or in the completion of development or construction activities, economic and financial market conditions; political risks; Gold One`s hedging practices; currency fluctuations; title disputes or claims limitations on insurance coverage. Although Gold One has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. Any forward-looking statements in this release speak only at the time of issue. There can be no assurance that such statements will prove to be accurate as actual values, results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Gold One does not undertake to update any forward-looking statements that are included herein, or revise any changes in events, conditions or circumstances on which any such statement is based, except in accordance with applicable securities laws and stock exchange listing requirements. Competent Person The information in this release that relates to exploration results, mineral resources or ore reserves is based on information compiled by Dr Richard Stewart, who has a doctorate in geology and who is a professional natural scientist registered with the South African Council for Natural Scientific Professions (SACNASP), membership number 400051/04. Dr Stewart is also a member of the Geological Society of South Africa (GSSA) and Senior Vice President: Business Development for Gold One, with which he is a full-time employee. He has 10 years` experience which is relevant to the style of mineralisation and type of deposit under consideration, and to the activity which he is undertaking, to qualify as a Competent Person for the purposes of both the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code) and the 2007 Edition of the South African Code for Reporting of Exploration Results, Mineral Resources and Mineral Reserves (SAMREC Code). Dr Stewart consents to the inclusion in this release of the matters based on information compiled by Gold One employees and it`s consultants in the form and context in which they appear. Further information on Gold One`s resource statement is available in the pre-listing statement of Gold One International Limited issued on 19 December 2008 and in the resource statements released by Gold One on the ASX Announcements Platform and the Stock Exchange News Service (SENS) on 11 October 2010 (Megamine), 7 December 2010 (Ventersburg), and 15 December 2010 (Modder East) and in the 2010 Annual Report released on 28 February 2011. SAMREC and JORC Terminology In addition, this release uses the terms `indicated resources` and `inferred resources` as defined in accordance with the SAMREC Code, prepared by the South African Mineral Resource Committee (SAMREC), under the auspices of the South African Institute of Mining and Metallurgy (SAIMM), effective March 2000 or as amended from time to time and where indicated in accordance with the Canadian National Instrument 43-101 - Standards for Disclosure for Mineral Projects. The terms `indicated resources` and `inferred resources` are also defined in the 2004 Edition of the JORC Code, prepared by the Joint Ore Reserves Committee (JORC) of the Australasian Institute of Mining and Metallurgy (AusIMM), the Australian Institute of Geoscientists (AIG) and the Minerals Council of Australia (MCA). (The use of these terms in this release is consistent with the definitions of both the SAMREC Code and the JORC Code.) A mineral reserve (or `ore reserve` in the JORC Code) is the economically mineable part of a measured or indicated resource demonstrated by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate at the time of reporting that economic extraction can be justified. A mineral reserve includes diluting materials and allows for losses that may occur when the material is mined. A proven mineral reserve (or `proved ore reserve` in the JORC Code) is the economically mineable part of a measured resource for which quantity, grade or quality, densities, shape and physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters to support production planning and evaluation of the economic viability of the deposit. A probable mineral reserve (or `probable ore reserve` in the JORC Code) is the economically mineable part of an indicated mineral resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters to support mine planning and evaluation of the economic viability of the deposit. A mineral resource is a concentration or occurrence of natural, solid, inorganic or fossilised organic material in or on the earth`s crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a mineral resource are known, estimated or interpreted from specific geological evidence and knowledge. A measured mineral resource is that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drillholes that are spaced closely enough to confirm both geological and grade continuity. An indicated mineral resource is that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drillholes that are spaced closely enough for geological and grade continuity to be reasonably assumed. An inferred mineral resource is that part of a mineral resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited exploration and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drillholes. Mineral resources which are not mineral reserves do not have demonstrated economic viability. Investors are cautioned not to assume that all or any part of the mineral deposits in the measured and indicated resource categories will ever be converted into reserves. In addition, "inferred resources" have a great amount of uncertainty as to their existence and economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will be ever be upgraded to a higher category. Under South African and Australian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies or economic studies except under conditions noted in the SAMREC Code and the JORC Code, respectively. Investors are cautioned not to assume that all or any part of an inferred resource exists or is economically or legally mineable. Exploration data is acquired by Gold One and its consultants under strict quality assurance and quality control protocols. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. Weltevreden Park 17 October 2011 JSE SPONSOR Macquarie First South Capital (Pty) Limited Date: 17/10/2011 08:11:15 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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