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GDO - Gold One International Limited - Gold One to Acquire 100% of Ezulwini

Release Date: 05/03/2012 07:05
Code(s): GDO
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GDO - Gold One International Limited - Gold One to Acquire 100% of Ezulwini Mine from First Uranium Significant Value-Unlock expected by Combining Ezulwini and Rand Uranium Gold One International Limited Registered in Western Australia under the Corporations Act, 2001 (Cth) with registration number ACN: 094 265 746 (Registered in South Africa as an external company with registration number 2009/000032/10) ISIN: AU000000GDO5 Share Code on the ASX/JSE: GDO OTCQX International: GLDZY ("Gold One" or the "company") Gold One to Acquire 100% of Ezulwini Mine from First Uranium Significant Value-Unlock expected by Combining Ezulwini and Rand Uranium Highlights: - Gold One to acquire 100% of gold and uranium producer Ezulwini Mine for US$ 70 million - New gold plant with nameplate capacity of 2.4 million tonnes per annum and a new uranium plant in place with simple, proven uranium technology and nameplate capacity of 1.2 million tonnes per annum - Large scale, medium depth, gold and uranium resource - Capital intensive projects totalling US$ 400 million substantially completed which include shaft refurbishment and new gold and uranium plant Gold One is pleased to announce that it has entered into a binding letter agreement with First Uranium Corporation ("First Uranium") to acquire 100% of the issued shares of, and all shareholders` claims against Ezulwini Mining Company (Pty) Limited ("EMC"), held by First Uranium`s wholly owned subsidiary First Uranium Limited (Cyprus) ("FUL"), for a total consideration of US$ 70 million (ZAR 539.7 million )(1) (the "Letter Agreement"). The Letter Agreement with First Uranium is subject to certain terms and conditions precedent detailed below (the "Proposed Transaction"). Gold One President and CEO Neal Froneman comments: "I am delighted to announce that we have reached agreement with First Uranium. This acquisition is aligned to our business strategy of value- accretive growth and is a key component in the realization of synergies across the Cooke Underground and Randfontein Surface Operations. With immediate access to Ezulwini`s uranium processing facility, we can now look towards unlocking the value of our joint underground resources and begin capitalising on our gold and uranium co-product strategy in the near term. The Zuurbekom downdip extension is expected to have a material impact on the life of Cooke 1 shaft. Our Cooke Operations management team has extensive knowledge of the Ezulwini orebody and, with their gold and uranium mining experience, we are well placed to realise the inherent value from the combination of these assets." (1) Based upon the exchange rate on the date the Letter Agreement from Gold One was tabled: ZAR 7.71: US$ 1 1. Overview of the Ezulwini Mine and Proposed Transaction Rationale The Ezulwini Mine ("Ezulwini") is located approximately 40 kilometers from Johannesburg, South Africa in the West Rand Goldfield of the Witwatersrand Basin and is contiguous to Gold One`s Cooke Operations. Ezulwini is an underground mine that has two primary tabular ore bodies which are approximately 400 metres apart. The Upper Elsburg ("UE") ore body, where the majority of mining has been done to date, is primarily a gold deposit. The Middle Elsburg ("ME") ore body is a gold and uranium bearing deposit that has been less extensively exploited. The establishment of Ezulwini was substantially completed during the last quarter of 2009, including the rehabilitation and re-engineering of the main shaft through the installation of a floating steel tower and the construction of a gold plant with nameplate capacity of up to 200 000 tonnes per month and a uranium plant with nameplate capacity of up to 100 000 tonnes per month. Ezulwini is a developing producer which sold 59,689 ounces of gold and produced 31,407 pounds of uranium in 2011. In addition, previous work suggests that the mine represents in excess of 13.2 million tonnes of measured and indicated mineral resources containing 2.7 million ounces of gold, 6.6 million pounds of uranium and 159 million tonnes of inferred mineral resources containing 25.5 million ounces of gold and 189 million pounds of uranium, as detailed below. Ezulwini Mine: Summary of Mineral Resource Statement as at December 31, 2010 Grade Content Category Reef Tonnes Gold U3O8 Gold U3O8 (t (g/t) (%) (`000 (lb 000s)
`000) oz) Measured UE Shaft 1,732 8.39 467 Reef Pillar Middle 1,131 6.03 0.067 219 1,671
Elsburg Total 2,863 7.46 687 1,671 Indicated UE Shaft 3,348 6.31 679 Reef Pillar UE Pillars 1 2,227 5.59 400 & 2(EC) UE Pillars 1 521 5.14 86 & 2(ED)
UE Pillars 3 118 7.64 29 (MB) UE Pillars 4 1,285 6.68 276 (ED)
Middle 2,873 5.39 0.077 498 4,876 Elsburg (E9Ec) Total 10,372 5.90 1,968 4,876 Measured UE Shaft 5,080 7.02 1,147 and Pillar Indicated Reef UE Pillars 1 2,227 5.59 400 & 2(EC) UE Pillars 1 521 5.14 86 & 2(ED)
UE Pillars 3 118 7.64 29 (MB) UE Pillars 4 1,285 6.68 276 (ED)
Middle 4,004 5.57 0.074 717 6,546 Elsburg (E9Ec) Total 13,235 6.24 2,655 6,546 Inferred Upper 45,712 5.43 7,977 Reef Elsburg UE Pillars 1 45 8.62 12 & 2(EC)
UE Pillars 1 112 12.50 45 & 2(ED) Middle 7,737 6.43 0.088 1,599 15,006 Elsburg
(E9Ec) Left below 105,07 4.70 0.075 15,878 173,689 2,500m 5 Total 158,86 5.00 25,512 188,695 1 As per updated Technical Report Preliminary Assessment for the Ezulwini Mine prepared by Roscoe Postle and Associates Inc - February 2, 2011 Notes: 1. Canadian Institute of Mining Metallurgy and Petroleum (CIM), JORC and SAMREC definitions were followed for mineral resources. 2. UE refers to the Upper Elsburg Reef horizon, which is mined for gold only; ME refers to Middle Elsburg Reef horizon, which is mined for gold and uranium. 3. Mineral resources were estimated at a cut-off grade of 4.0 g/t Au for the UE and 3.0 g/t Au for the ME. 4. Mineral resources were estimated using an average long-term gold price of US$775 per ounce, US$56 per pound U3O8, and a US$/R exchange rate of 1:7. 5. A minimum mining width of 1.0 m was used. 6. Rows and columns may not add exactly due to rounding 7. Mineral resources that are not mineral reserves do not have demonstrated economic viability. 8. 2009 and 2010 production deducted as per First Uranium records. 9. The mineral resource estimates were updated in a Technical Report by Roscoe Postle and Associates Inc. dated February 2, 2011. Roscoe Postle and Associates has not updated the Technical Report to reflect any new information since the date of the report. The mineral resource statement has been reviewed and approved by D Bergen, P.Eng.; W Valliant, P.Geo., and D Ross, P.Geo. Please refer to the "Competent Persons" section of this announcement for further details about the qualifications of these persons and the basis on which these estimates are included in this announcement. With the capital intensive projects totaling approximately US$ 400 million, including shaft refurbishment and construction of the gold and uranium plant, substantially completed, Gold One`s immediate focus will be on implementing a right sized operation, in line with the re-structuring program currently being undertaken by Ezulwini, and reducing operating costs through shared synergies with the Cooke underground operations. The Company will also consider a focused underground development program to ensure sustainable underground mining flexibility. Ezulwini represents an attractive economic proposition in that it provides seamless regional consolidation with Gold One`s Cooke Operations. The combination of Ezulwini with the Cooke Operations available under the Proposed Transaction is expected to provide: - Immediate benefits in the realisation of uranium production from the Cooke Operations. This dual commodity mix of gold, combined with high grade uranium, is anticipated to allow for a flexible co- product mining approach - Seamless regional consolidation: * Shared senior management with Cooke 1-3, thereby reducing Cooke Operations overhead structure; * Immediate access to the Zuurbekom (2) ore body via development and infrastructure from the Cooke Operations; * Existing shaft management; and * Cost reductions through shared services with the Cooke Operations.
- Main shaft moiling and maintenance program to sustain a 20 year life of mine - Alternative gold plant for Cooke underground ore (allowing Cooke surface operations to expand using the dedicated Cooke Gold plant), enhancing operational efficiency by removing toll treating; - Production expansion opportunities in the short term through the implementation of a co-product mining strategy; - Further potential medium term production expansion from Ezulwini SV4 project(3) and Cooke/Ezulwini Boundary Pillar project(4); and - Longer term potential production expansion or extension from the Zuurbekom project. (2) EMC holds the prospecting right to the Zuurbekom property which is located adjacent to the Cooke Operations (3) The Ezulwini SV-4 project accesses the Upper Elsburgs but requires dewatering and infrastructure; 4km South of main shaft (4) Previously an agreement prevented mining 60m either side of a water pillar boundary between the Cooke and Ezulwini lease areas; this area hosts significant gold and uranium potential Ezulwini: Additional Opportunities In addition to the existing gold operations, in Gold One`s view Ezulwini provides further tangible upside potential that can be realised in the short to medium term: - Ezulwini offers further tailings retreatment opportunities; - Gold One would secure a portion of a new and existing calcining stream at the Nuclear Fuels Corporation of South Africa (Pty) Limited ("NUFCOR"), removing cost, time and construction risk for Gold One`s uranium project; - Significant upside exists in terms of focused and systematic exploration potential to further increase or prolong planned production profiles. 2. The Proposed Transaction First Uranium and Gold One have entered into the Letter Agreement for the acquisition of all the issued shares of and all shareholders` and other First Uranium group claims against EMC and/or FUL, for an aggregate consideration of US$ 70 million (the "Purchase Price"). The Purchase Price is to be paid in cash on the completion date (as defined below) of the Proposed Transaction. The final and conclusive terms of the Proposed Transaction, will be set out in the definitive transaction agreements to be entered into between the parties at a later date ("Transaction Agreements"). The Completion Date will be defined in the Transaction Agreements, and is currently anticipated to be no later than Friday, 29 June 2012, unless extended by mutual agreement ("Completion Date"). As part of the Proposed Transaction, Gold One will make available to First Uranium a loan facility in the amount of US$ 10 million ("The Loan Facility") on, amongst other, the following terms: - AngloGold Ashanti Limited entering into a definitive written agreement with First Uranium or the applicable member of the First Uranium Group to acquire First Uranium (Pty) Ltd and/or Mine Waste Solutions (Pty) Ltd, and such acquisition being publicly announced; - The Loan Facility will be available for draw down from the date of closing of the loan agreement until the earlier of the date of termination of, or the Completion Date of the Proposed Transaction; and - Will bear interest at the South African Prime Rate of interest, nominal annual compounded monthly in arrears. On completion of the Proposed Transaction, all loan amounts drawn under the Loan Facility will be deducted from the Purchase Price or, in the event that the Proposed Transaction does not proceed, will be repaid upon written demand by Gold One. The Loan Facility will be guaranteed by Main Street 789 Security SPV (the security special purpose vehicle that has guaranteed payment when due of all indebtedness of the First Uranium Group) so that the loan facility shall share in the benefit of the securities held by the Security SPV proportionally with the other First Uranium group creditors secured by the Security SPV. Management Control First Uranium has undertaken to provide the Gold One management team with management control over Ezulwini as soon as possible after the date of signature of the Transaction Agreements and the approval of the Proposed Transaction by the South African Competition authorities. 3. Conditions Precedent The Letter Agreement and implementation of the Proposed Transaction are subject to and conditional upon the fulfillment or waiver (if applicable) of, inter alia, the following conditions precedent: - Gold One completing to its satisfaction the outstanding aspects of its due diligence in respect of the First Uranium group by March 12, 2012, such outstanding aspects being due diligence in respect of: * the constituting documents of FIU and FUL, to confirm corporate existence and authorities to conclude and execute the transaction; * evaluating the financial statements and any taxation related issues in regard to FUL;
- Gold One being provided with a 6 month planned budget ("the Budget") for the period 1 January to 30 June 2012 in respect of EMC`s operations and capital expenditure. Such budget shall be approved by Gold One and will specifically provide for EMC having sufficient cash resources on hand to meet the following liabilities: * the first third payment due in terms of the First Uranium Retention Bonus for senior employees dated 24 October 2011;
* R20,000,000 for water use license and any outstanding permitting related issues; * R40,000,000 for additional rehabilitation obligations of Ezulwini that have not currently been provided for.
- On the date that Gold One acquires management control and without taking into account intercorporate debt among companies in the First Uranium group of companies, being First Uranium and its subsidiary and affiliated companies (the "First Uranium Group"), the ratio of the current assets of EMC (being all assets classified as such in accordance with IFRS) to the current liabilities of EMC (being all liabilities classified as such in accordance with IFRS, excluding the current portion related to the EMC gold stream transaction liability) shall be one to one (1:1); - All FUL`s and/or EMC`s guarantees (as may be applicable ) that operate as security for the secured trust indentures being released, as well as FUL`s and/or EMC`s guarantees (as may be applicable) that operate as security for any other creditor that is secured by means of the Main Street 789 (Pty) Limited structure being released; - All security over the sale shares and claims being acquired being cancelled, as well as all security over the assets of FUL and/or EMC ( as may be applicable) in respect of liabilities of the First Uranium Group, save in respect of liabilities of FUL and/or of EMC itself ( as may be applicable ) in respect of its own assets and operations, being cancelled; - Unless the debentures (as defined in the Debenture Indenture) are fully paid by the Completion Date, the Debenture Trustee (as defined in the Debenture Indenture) and the requisite majority of the holders of debentures shall have agreed that the Purchaser shall not be a "Successor Company" in terms of Article 14 of the Debenture Indenture dated 3 May 2007 (the "Debenture Indenture"); - EMC has completed its restructuring in terms of Section 189 of the South African Labour Relations Act, as publicly announced in December 2011; - Gold One and First Uranium negotiating in good faith and executing the necessary Transaction Agreements, to give effect to the Proposed Transaction, on terms mutually acceptable to the parties, each acting reasonably, which shall contain all necessary warranties and indemnities customary in agreements of this nature; - The approval of the Transaction Agreements by Gold One`s and First Uranium`s board of directors; - The approval of the Proposed Transaction and passing of such resolutions as may be required by First Uranium`s shareholders in a general meeting, and/or by FUL`s shareholder, First Uranium, to the extent required; - The approval of the Proposed Transaction by the competition authorities of the Republic of South Africa ("South Africa"), to the extent required; - All necessary consents, rulings and/or directives being obtained from the Minister of Mineral Resources and/or the Department of Mineral Resources ("DMR"), to the extent required; - The withdrawal of the Section 47 Notice issued by the DMR in respect of EMC`s mining right in March 2011; - The requisite approval being granted to Gold One under the National Nuclear Regulator Act, 1999, if required; - First Uranium obtaining from Franco Nevada (Barbados) Corporation ("FNB"): * such amendments to the gold stream agreements concluded by the First Uranium Group with FNB as are required by Gold One; * such consent for the Proposed Transaction as may be required from FNB under the gold stream and any other applicable agreement between FNB and the First Uranium Groups; and * confirmation by FNB that it is aware of the Section 47 Notice referred to in the paragraph above and is satisfied with the
action taken by EMC in response thereto; - First Uranium obtaining from all other parties to the gold stream agreements referred to in above and from all other parties with which the First Uranium Group has contracted and who may be affected by the Proposed Transaction, such consents to the Proposed Transaction as may be required from them; - The consent to the cession from First Uranium to Gold One of 25% (550 tonnes per annum of uranium bearing material) of the capacity of Stream 3 and related rights and obligations (including the corresponding transportation, treatment and capital fees) under the Toll Treatment Agreement, as amended from time to time, between First Uranium and NUFCOR, for the continued processing of uranium bearing material produced at EMC`s plants situated at number 2 Goudlaan, Westonaria, by NUFCOR. - All necessary approvals being obtained from the ASX, TSX, JSE and any other regulatory body having jurisdiction over the Proposed Transaction, to the extent required; - Approval from the South African Reserve Bank, to the extent required; - In the event that the Company acquired in terms of the Proposed Transaction is FUL, that the Transaction Agreements contain such terms to the satisfaction of Gold One, acting reasonably, with regard to governing law (and the proof thereof in the event of a dispute, should such law be Cypriot law), jurisdiction and dispute resolution; - That there be no material adverse change with regard to the Company and/or its business affecting the Company and/or its business from the date of acceptance in writing of the Letter Agreement to the date of fulfillment or waiver by the Purchaser of all the conditions precedent applicable to the Proposed Transaction. Gold One is of the opinion that the conditions precedent contained above can be fulfilled in a timely and efficient manner. 4. Exclusivity Period Gold One has been granted exclusivity by First Uranium until Monday, 12 March 2012 to conduct its outstanding legal and financial due diligence, and Friday, 16 March 2012 5:00pm Central African Time to negotiate the definitive Proposed Transaction Agreements. In the event of the board of directors of First Uranium resolving not to proceed with the Proposed Transaction or Gold One terminating the Letter Agreement or the Proposed Transaction due to any material breach by First Uranium, Gold One will be entitled to a break fee of US$2,500,000. Should an unsolicited superior proposal be received by First Uranium, Gold One will be granted five business days` notice of such proposal to enable Gold One to amend the terms of the Proposed Transaction in a way that would enable the parties to proceed with the transaction as amended, should it elect to do so. 05 March 2012 Corporate Advisor: Qinisele Resources (Proprietary) Limited Australian Corporate Advisor: Hartleys Limited Transaction Sponsor and JSE Sponsor: Macquarie First South Capital (Proprietary) Limited South African Legal Advisor: Edward Nathan Sonnenbergs Australian Legal Counsel: Ashurst Australia Canadian Legal Counsel: Stikeman Elliott ENDS 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 Investor Relations +27 10 591 5219 (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) and continues 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 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 mineral resource estimates were updated in a Technical Report by Roscoe Postle and Associates Inc. dated February 2, 2011. The mineral resource statement included in this announcement has been reviewed and approved by D Bergen, P.Eng.; W Valliant, P.Geo., and D Ross, P.Geo.; each of whom is a "qualified person" under NI 43-101 with regard to these resources. Similarly, and 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), the information in this announcement that relates to Mineral Resources is based on information compiled by D Bergen, P.Eng.; W Valliant, P.Geo., and D Ross, P.Geo, each of whom is a member of National Instruments 43-101 and is employed by Scott Wilson Roscoe Postle Associates Inc. Each of the above persons: has sufficient 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 as defined in both the JORC Code and the SAMREC Code; and consents to the inclusion of the information in this announcement that relates to Mineral Resources in the form and context in which it appears. Gold One has not undertaken (either on its own accord, or through a third party on its behalf) any independent investigation, verification or analysis of the mineral resource estimates prepared by Roscoe Postle and Associates Inc. Accordingly, to the extent noted above, Gold One: is relying on the mineral resource estimates prepared by Roscoe Postle and Associates who was engaged by First Uranium; and makes no representation or warranty as to the adequacy or accuracy of the estimates, and disclaims to the maximum extent permitted any liability for any direct, indirect or consequential loss or damage suffered by any person or persons as a result of relying on these estimates. Gold One intends to undertake a review of these mineral resource estimates when it is in a position to do so. SAMREC, CANADIAN NI 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: 05/03/2012 07:05:15 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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