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GDO - Gold One International Limited - December 2011 Quarterly Results
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
OTCQX International: GLDZY
ISIN: AU000000GDO5
("Gold One" or the "company")
December 2011 Quarterly Results
- 33,352 ounces produced for the December 2011 quarter and 123,179 ounces
produced for 2011, exceeding annual guidance of 120,000 ounces
- Modder East achieves quarterly cash cost of US$ 468/oz and annual cash cost
of US$ 491/oz
- Completion of the Jintu transaction and subsequent A$ 150 million (US$
152.28 million) capital injection into Gold One
- Cash and gold receivables, excluding the capital injection, increased by
80% to US$ 77.96 million
- Post capital injection, cash and gold receivables balance increased quarter-
on-quarter by 432% to US$ 230.24 million
- Lost-time injury-free quarter with a low 2011 progressive lost-time injury
frequency of 0.54 per 200,000 hours worked
- Updated Mineral Resources for Modder East and Ventersburg
- Completion of Ventersburg pre-feasibility study
- Converted Modder East Mining Licence granted
- Rand Uranium transaction completed in early January 2012
Gold One is pleased to announce the company`s December 2011 quarter results,
which exceed production targets for both the quarter under review as well as
for the financial 2011 year. During the December 2011 quarter, the company
produced 33,352 ounces, exceeding guidance of 33,000 ounces and bringing
total production for 2011 to 123,179 ounces.
A group cash cost for the quarter of US$ 468/oz was achieved in an exchange
rate environment of ZAR 8.12 / US$ 1 with a total cost* of US$ 688/oz. For
2011, an average cash cost of US$ 491/oz was achieved at an average exchange
rate of ZAR 7.25 / US$ 1. Group gold revenue for the December 2011 quarter
amounted to A$ 55.74 million (US$ 56.09 million, ZAR 455.14 million), while
group cash operating costs were A$ 16.43 million (US$ 16.53 million, ZAR
134.14 million), resulting in a positive operating cash flow of A$ 39.31
million (US$ 39.56 million, ZAR 321.00 million). During the December 2011
quarter, Gold One increased its cash on hand and gold receivables by 80% to
A$ 76.52 million (US$ 77.96 million, ZAR 629.80 million), which was further
bolstered by the capital injection of A$ 150 million (US$ 152.28 million, ZAR
1,239.36 million) from the closing of the Jintu transaction, thus totalling
A$ 225.99 million (US$ 230.24 million, ZAR 1,859.99 million) (including
restricted cash of A$ 4.32 million (US$ 4.40 million, ZAR 35.54 million)).
The Company concluded 2011 with a significant milestone, namely the
successful closing of the Jintu transaction thus introducing a new strategic
shareholder and partner to the Gold One Group. This transaction has resulted
in the transformation of the company, with the consortium now holding 89.17%
of the share capital in Gold One. The consortium is supportive of Gold One`s
fundamental growth strategy and is committed to providing financial,
technical and corporate resources to support our internal and external growth
strategy.
Following the significant support for the Jintu transaction, the company has
planned several key strategic focus areas for the upcoming months, including
initiating a listing on the Hong Kong Stock Exchange, which is envisaged to
take place within nine to 18 months` time. To support the listing and growth
in this region, Gold One is also focused on rapidly developing a presence in
Hong Kong where it is currently establishing an office.
Gold One`s production profile has been significantly bolstered by the
acquisition of the Cooke Operations via the Rand Uranium transaction, which
was declared unconditional on 6 January, 2012. This transaction has doubled
Gold One`s 2012 production forecast and facilitated the Gold One Group to
transition from a junior gold mining company to a mid-tier player with
multiple production assets. Gold One has now fully implemented the
separation of the Randfontein-based operations into two distinct business
units, namely, the Randfontein Surface Operations and the Cooke Underground
Operations.
The Cooke Underground Operations are advancing strongly with the
implementation of a detailed turnaround strategy - the benefits of which will
start to be realised during the March 2012 quarter. Over two years, the
company is targeting a sustainable profitability enhancement in excess of ZAR
500 million per year (US$ 61.89 million). Achieving this turnaround strategy
would bring the operation in line with our planned operating cash costs of
approximately US$ 1,000/oz by 2014, excluding co-product uranium benefits
which we anticipate by 2015.
The Surface Operations are now being managed as an independent business unit,
not only to ensure adequate focus on the existing surface operation, but also
to grow the business unit by exploiting the substantial surface resources
that belong to Rand Uranium. Included in the strategic focus of the
Randfontein Surface Operations is the Cooke Uranium Project, focused on the
development and construction of a uranium processing plant to treat the Cooke
Tailings Deposit as well as uranium-bearing underground ore. As announced on
24 January, 2012, Gold One has also initiated a strategic partnership with
Gold Fields to investigate the joint processing of both companies` tailings
resources located on the West Rand.
At the Modder East Operations, the production ramp up and mining flexibility
have continued in-line with our plans. As at the end of December, the
operation had opened sufficient reserves to support its production profile
for approximately eight months should no further development take place.
During the December 2011 quarter, the mineral resource estimate for the Black
Reef at Modder East was updated resulting in a substantial increase in the
measured resource category (a detailed breakdown of the updated resources is
set out in the December 2011 Quarterly Activities Report and is also
available on the Gold One website).
During the December quarter the company continued to progress and advance its
internal project pipeline. At Ventersburg, an updated resource estimate was
completed during November 2011, which has subsequently underpinned a pre-
feasibility study for the project. The updated resource resulted in a 17%
increase in the indicated resource base (a detailed breakdown of the updated
resources is set out in the December 2011 Quarterly Activities Report and is
also available on the Gold One website). The pre-feasibility study considers
a total mine life of 17 years, with steady state production of 80,000 tonnes
per month. At steady state, annual production is estimated to be
approximately 135,000 ounces per annum. Over the life of the planned
project, a total of 1.47 million ounces of gold is mined at an average head
grade of 3.95 grams per tonne. Total capital costs (including ongoing
development capital) are estimated at ZAR 3,565 million (US$ 441 million).
Cash costs over the life of mine are anticipated to be US$ 606/oz and total
costs (including capital) US$ 906/oz, based on an exchange rate of ZAR 8.50 /
US$ 1. On the basis of the positive outcome of the pre-feasibility study,
Gold One intends to complete a feasibility study by the end of the year.
At Modder North, the first phase of the planned surface exploration drill
program was completed during the December 2011 quarter. On the basis of the
positive results received to date, this programme will be fast-tracked during
the March 2012 quarter. In parallel with the ongoing exploration programme,
the company has commenced with conceptual economic studies to consider
optimal access options to the potential Modder North target. Environmental
studies have also commenced to facilitate the update of the Environmental
Management Plan.
Annual production for 2012 has been forecast at 300,000 ounces, of which the
Modder East Operations will contribute 150,000 ounces, the Cooke Underground
Operations will contribute 118,000 ounces, and the Randfontein Surface
Operations will contribute 32,000 ounces. Total production for the March 2012
quarter has been forecast at 68,000 ounces, of which the Modder East
Operations will contribute 34,000 ounces, the Cooke Underground Operations
will contribute 26,000 ounces, and the Randfontein Surface Operations will
contribute 8,000 ounces.
Gold One President and CEO Neal Froneman comments: "The 2011 year was focused
on production delivery. I am delighted that we have successfully exceeded
our targets both from an operational and also a corporate perspective.
During 2012 we look forward to the continued ramp up in production at Modder
East, the implementation of a well-structured turnaround plan at the Cooke
Underground Operations and a dedicated focus on growth on the Randfontein
Surface Operations. With the strong support of our strategic partners,
continued focus on operational delivery and advancement of our key projects,
Gold One is well positioned to achieve its target of becoming a million ounce
producer".
*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.
ENDS
31 January 2012
JSE Sponsor
Macquarie First South Capital (Pty) Limited
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
Grant Stuart
VP Investor Relations
+27 11 726 1047 (office)
+27 82 602 5992 (mobile)
grant.stuart@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 dual listed mid-tier mining group with gold operations and gold
and uranium prospects across Southern Africa. Gold One remains focused on
developing and mining low technical risk, high margin precious metal
resources in diversified jurisdictions. The company`s flagship Modder East
gold mine, commissioned in 2009,distinguishes itself from most other gold
mines in South Africa owing to its shallow nature (300 to 500 metres below
surface) andcontinues to ramp up production, having produced 123,179 ounces
in 2011.
At the beginning of 2012, the group expanded further with the acquisition of
Rand Uranium (Pty) Limited consisting of the Cooke Underground Operations and
the Randfontein Surface Operations located in the West Rand, 30 kilometres
from Johannesburg. The Cooke underground operations continue to deliver in
line with expectations and are currently the subject of a turnaround
intervention. Through Gold One`s purchase of Rand Uranium (Pty) Limited, the
group has also acquired one of the world`s most advanced uranium projects,
which envisages recovering uranium, gold and sulphur from the Cooke Tailings
Dam and underground ores.
The Gold One group is majority-owned by a consortium comprising Baiyin Non-
Ferrous Group Co. Limited, the China-Africa Development Fund, and Long March
Capital Limited and has an issued share capital of 1,415,302,711 shares.
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 forard-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 Persons` Statement
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 12 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.
Date: 31/01/2012 07:08:33 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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