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GDO - Gold One International Limited - Quarterly Activities Report - Quarter
Ended 31 March 2012
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")
Quarterly Activities Report
Quarter Ended 31 March 2012
March 2012 Quarter Highlights
61,625 ounces produced for the March 2012 quarter representing a 85% increase on
the December 2011 quarter principally as a result of the closure of the Rand
Uranium transaction
US$ 21.17 million operating cashflow
Cash balance decreased by 34% to US$ 147.61 million primarily due to a US$ 137
million tranche payment for the acquisition of Rand Uranium
Cost reduction initiatives at the Cooke Underground Operations result in cash
operating costs reducing by 6% to US$ 1,513/oz from the 2011 average
Company balance sheet strengthened through a US$ 75 million unsecured
shareholder loan and a secured Investec facility
Crystallisation of US$ 55*million value for the Megamine assets through the sale
to Goliath Gold for a consideration settled by way of issue of ordinary Goliath
Gold shares
Memorandum of understanding entered into with Gold Fields to jointly investigate
the viability of concurrently reprocessing surface tailings deposits
Binding agreement entered into with First Uranium to acquire 100% of Ezulwini
Mine for US$ 70 million
Gold One enters into an agreement to acquire the Modder East down dip Kimberly
Reef extensions for US$ 8.5 million from the liquidators of the Pamodzi East
Rand assets
Wayne Robinson appointed as Head of South African Operations to bolster
operating expertise and capacity
*As at 30 March 2012
June 2012 Quarter Outlook
June 2012 quarter production forecast of 69,000 ounces:
34,000 ounces from the Modder East Operations
27,000 ounces from the Cooke Underground Operations
8,000 ounces from the Randfontein Surface Operations
March 2012 Quarter Key Performance Data
(Average Exchange Rate of ZAR 7.74 / US$ 1)
(December 2011 Quarter Average Exchange Rate of ZAR 8.12 / US$ 1)
Modder Cooke Randfont Gold One December
East Undergro ein Group 2011
Operatio und Surface Quarter
ns Operatio Operatio (1)
ns ns
Ore Mined 116 514 277 021 n/a 194 760 t
Underground t t
Mined Grade 7.39 g/t 4.60 g/t 0.43 g/t 7.10 g/t
Milled Tonnes 139 115 238 519 756 390 167 308 t
t t t
Recovered Grade 6.80 g/t 3.00 g/t 0.301 6.20 g/t
g/t
Gold Recovery 95% 94% 69.28% 96%
Gold Produced 31 128 23 171 7 326 oz 61 625 oz 33 352 oz
oz2 oz3
Cash Cost4 US$ US$ 1 US$ 1 US$ 1 US$ 468/oz
683/oz 513/oz 388/oz 093/oz
Total Cost5 US$ US$ 1 US$ 1 US$ 1 US$ 688/oz
867/oz 700/oz 450/oz 266/oz
Average Gold US$ 1 US$ 1 US$ 1 US$ 1 US$ 1
Price Received 648/oz 209/oz 209/oz 424/oz 685/oz
Gross Cash US$ US$ - US$ - US$ US$ 1
Margin 965/oz 304/oz 179/oz 331/oz 217/oz
Group US$ 16.06 million US$ 11.27
Development and million
Capital
Expenditure
Group Gold US$ 86.19 million US$ 59.06
Revenue million
December 2011 quarter data included production, costs and expenses from Modder
East only as the acquisition of Rand Uranium was not yet been completed.
Includes 714 ounces produced at Modder East by the treatment of 35,731 tonnes of
low grade development ore at a recovered grade of 0.64 grams per tonne.
Includes 177 ounces produced at the Cooke operations by the treatment of 11,277
tonnes of low grade development ore and mud
Cash cost refers to all costs directly associated with mining activities, mine
administration, processing and refining.
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.
CEO`s Review
During the March 2012 quarter, a total of 61,625 ounces of gold was produced for
the Gold One group. Although it is pleasing that this represents an 85%
increase on the December 2011 quarter`s production, the slower than anticipated
start up following the December festive holidays at all of our operations
negatively impacted our production and disappointingly resulted in gold
production that was 9% (or 6,375 ounces) less than the quarterly forecast.
At Modder East, production losses were compounded due to both protected and
unprotected industrial action, and mine-wide safety stoppages imposed by the
South African Department of Mineral Resources ("DMR"). Without this slow start
up post the festive season break and these unforeseen delays, I am confident
that we would have achieved our targeted guidance. Both the industrial action
and poor interim safety performance has been largely addressed and is discussed
below and in more detail under the operating sections of this report.
Management is forecasting 69,000 ounces of group gold production for the June
2012 quarter and management is committed to catching up the majority of the
March 2012 quarter`s lost production shifts by the end of 2012.
Safety performance regressed during the period under review. Safe operations
continue to be a priority focus and safety initiatives are in place to reverse
the current negative safety trend and reduce the group lost-time injury
frequency rate per 200,000 hours worked ("LTIFR") of 1.84 to below 1.0.
The group gold revenue for the March 2012 quarter amounted to US$ 86.19 million
from the sale of 60,507 ounces at an implied average price of US$ 1,424/oz.
This comprised 29,656 ounces of gold sold into the spot market at an implied
average price of US$ 1,648/oz and 30,851 ounces delivered into the Rand Uranium
hedge book at an implied average price of US$ 1,209/oz. The Rand Uranium hedge
book at 31 March 2012 totalled 126,073 ounces at an average deliverable price of
US$ 1,338/oz.
Despite not achieving production targets for the quarter and having to deliver
into the Rand Uranium hedge, a profit before tax of approximately US$ 7 million
was achieved. The profit is before accounting for the purchase price allocation
of the Rand Uranium acquisition and the international financial reporting
standards treatment of the black economic empowerment structures.
Gold One`s cash balance reduced by 34% during the quarter, principally as a
result of Gold One paying the first tranche of the Rand Uranium purchase
consideration of US$ 137 million. The company`s cash balance remained robust,
with the company ending the quarter with a cash balance of US$ 147.61 million
(including restricted cash of US$ 31.74 million) compared to a cash balance of
US$ 230.24 million (including restricted cash of US$ 4.40 million) at the end of
the December 2011 quarter. In addition to this, the company ended the quarter
under review with gold receivables amounting to US$ 8.26 million.
In support of our continued growth strategy, Gold One has strengthened its
balance sheet by securing financing through the Investec Bank Limited
("Investec") facility announced on 29 August 2011 as well as through a US$ 75
million unsecured shareholder loan facility granted by Baiyin Precious Metals
Limited ("Baiyin"), a wholly owned subsidiary of Gold One`s strategic majority
shareholder Baiyin Nonferrous Group Co. Limited ("Baiyin Nonferrous"). The
shareholder loan, together with the Investec facility, has allowed Gold One to
settle the outstanding balance of approximately US$ 113 million payable in
respect of its acquisition of Rand Uranium and to have the necessary funding
available to settle the Ezulwini transaction consideration on completion. At
quarter end, Gold One reflected long term debt of US$ 75 million comprising the
Baiyin shareholder loan received in late March 2012.
At Modder East, the production disruptions described above resulted in tonnes
treated from underground Black Reef production decreasing from 156,382 tonnes
during the December 2011 quarter to 139,115 tonnes for the quarter under review.
The Black Reef underground recovered grade remained steady at 6.80 grams per
tonne. The lower underground volumes were supplemented by a significant amount
of low grade on-reef development surface tonnage of 35,731 tonnes grading at an
average of 0.75 grams per tonne. As a result, the average recovered grade
decreased by 10.7% to 5.54 grams per tonne. The unit costs at the Modder East
Operations increased by 11% to ZAR 938 per tonne principally as a result of the
reduction in tonnes mined. The increased unit costs coupled with the lower
average grade, and an exchange rate movement quarter on quarter from ZAR
8.12/US$ 1 to ZAR 7.74/US$ 1, resulted in the cash cost increasing by 46% to US$
683/oz.
Management is continuing to engage representatives of the majority trade union,
the National Union of Mineworkers ("NUM"), on matters of mutual interest and
more specifically on the involvement of a new trade union seemingly recruiting
NUM members, which is attempting to disrupt the relationship between NUM and
Modder East management through instigation tactics, which is believed to have
been the underlying cause of the March 2012 quarter`s disruptions.. Poor safety
performance at Modder East also resulted in the progressive LTIFR increasing
from 0.54 at the end of 2011 to 1.39, with two Section 54s being issued by the
DMR. The Section 54s resulted in seven production days being lost while the
requirements set by these instructions were being implemented. These
shortcomings have since been addressed by increased short interval controls and
participation from all stakeholders. These initiatives should ensure that
operations return to normal and, as a result, the operations will achieve
budgeted production volumes.
Other focus areas including development and quality mining remain, which have
resulted in a further 5% reduction in stoping dilution during the quarter.
Increased on-reef development has sustained our flexibility levels with
available reserves supporting a production profile for a period of approximately
seven-and-a-half months at planned production rates should no further
development be undertaken. In addition, this development is targeting the
higher grade areas being accessed along the shoreline extension. This level of
flexibility, combined with an ongoing commitment to quality production,
underpins the company`s confidence in achieving production guidance at Modder
East.
At the Cooke Underground Operations, the quarter was dominated by poor volumes
and lower than planned recovered grades, both mainly as a result of a lack of
mining flexibility. Recovered grades were also affected by excessive in-stope
dilution. Mining flexibility is being addressed by an increase in development.
A focus on underground development resulted in significantly increased on-reef
development rates, increased off-reef development and increased face
availability, all of which will going forward facilitate increased flexibility
levels. Promising exploration results at the Cooke Underground Operations will
also over the medium term result in increased mining flexibility.
It is pleasing to report that, in line with the planned cost reduction strategy,
an 11% quarter on quarter reduction in unit costs to ZAR 1,137 per tonne has
been achieved. Despite recovered grades having reduced by 6% to 3.00 grams per
tonne, a 6% quarter on quarter reduction in cash costs to US$ 1,513/oz has also
been achieved.
Production at the Randfontein Surface Operation was negatively impacted during
March 2012 as a result of non-performance of a contractor appointed to install
and operate a conveyor based sand transportation and rail loading system, which
was planned to replace the more expensive existing loading and hauling system.
It was eventually decided to terminate this contract and to revert to the
previous arrangement for the remaining life of the Dump 20 sand operation.
In addition, elevated acidity levels in the dump also negatively impacted gold
recovery by some 3% due to varying quantities of a ferrous iron complex that
aggressively consumes and depletes the cyanide in the leach circuit, resulting
in significant reduction in cyanide available for gold dissolution and thus a
reduction in gold recovery. A possible metallurgical solution has been
identified following extensive metallurgical test work and will be tested during
the June 2012 quarter.
A specialist surface mineral resources manager has been appointed and is
evaluating a number of feed opportunities to support the growth strategy of
building a sustainable surface retreatment business that capitalises on the low
risk characteristics of the Randfontein surface asset base. This will further
enhance the company`s surface operation position on the West Rand.
Corporate Development
The March 2012 quarter has also seen the initiation, advancement and conclusion
of several key acquisitions. Gold One began the quarter with the completion of
the Rand Uranium acquisition for US$ 250 million on 6 January 2012, being eight
months after the company`s initial binding offer. This acquisition will add
substantial value and is crucial to the company`s growth and transformation
strategy. The Rand Uranium acquisition included the Cooke uranium project,
which envisages recovering uranium, gold and sulphur from the Cooke Tailings Dam
and uranium from underground ores. The ability to consider uranium extraction
as a co-product to gold significantly reduces the cash cost per ounce of gold
production and is an integral part of the Cooke turnaround strategy.
During the quarter under review, Bateman Engineering Limited ("Bateman") and MDM
Engineering Group Limited ("MDM") have separately conducted validations of the
definitive feasibility study originally compiled by Bateman for Rand Uranium for
the construction of the uranium plant. These reviews are currently being
considered by Gold One and a decision will be made during the June 2012 quarter
as to which of the two companies will be contracted to complete the feasibility
study.
A strategic partnership with Gold Fields Limited (JSE, NYSE, NASDAQ Dubai: GFI)
("Gold Fields") was announced on 24 January 2012. Together, Gold One and Gold
Fields plan to investigate the viability of concurrently reprocessing the
companies` combined surface tailings deposits located in the West Rand region of
South Africa`s Witwatersrand Basin. Gold One and Gold Fields` combined surface
tailings deposits will total in excess of 700 million tonnes, representing over
60% of the total tailings material in the region. Economic recovery of gold and
uranium from historical tailings deposits has already been successfully
demonstrated in other districts within the Witwatersrand Gold belt and with Gold
One and Gold Fields` combined technical studies and quality assets, this
partnership presents an exciting prospect for the growth of a formidable surface
retreatment business.
During March 2012, Gold One also announced that a binding agreement had been
signed with First Uranium Corporation ("First Uranium") to acquire 100% of the
issued shares of, and all shareholders` claims against Ezulwini Mining Company
(Pty) Limited ("Ezulwini"), for a total consideration of US$ 70 million. This
strategic acquisition is also aligned to the business strategy of value
accretive growth and is a key component in the realisation of synergies across
the Cooke underground and Ezulwini operations. The Cooke Operations management
team has extensive knowledge of the Ezulwini operation and, as a result, Gold
One is well placed to realise the inherent value of the consolidation of these
assets. With immediate access to Ezulwini`s uranium and gold processing
facilities, the company can unlock the value of the Cooke and Ezulwini
underground resources and enhance the group`s uranium co-product strategy.
On 20 March 2012, Gold One announced that the sale of its Megamine assets to
Goliath Gold Mining Limited (JSE: GGM) ("Goliath Gold") for an acquisition
consideration of ZAR 262,229,868 was unconditional. This consideration was
settled by way of the issue of 104,891,947 Goliath Gold ordinary shares. This
resulted in Gold One crystallising US$ 55 million of value for the Megamine
assets, based on the market capitalisation of Goliath Gold on the closing of the
transaction. Gold One, through a wholly owned subsidiary, has now acquired a
controlling interest of at least 71% in Goliath Gold. As at 30 March 2012,
Goliath Gold had a market capitalisation of over ZAR 598 million (US$ 78
million). On 20 April, and consequent to the closing of the mandatory offer of
Gold One to Goliath Gold shareholders, Gold One`s shareholding in Goliath Gold
increased to 72%.
Subsequent to the quarter`s end, on 17 April 2012, Gold One announced that the
company had entered into an acquisition agreement through its wholly owned
subsidiary New Kleinfontein Goldmine (Pty) Limited and with Goliath Gold to
acquire control over the underground deposits of Grootvlei Proprietary Mines,
Consolidated Modderfontein Mines and Nigel Gold Mining Company for a total of
ZAR 70 million. Gold One and Goliath Gold will have access to explore one of the
largest brownfield exploration properties in the world that still hosts
significant potential resources. Specifically Gold One will have access to
exploring and delineating the contiguous down dip extension to Modder East.
This largely unmined area is highly prospective with regards to the UK9a
orebody. The UK9a currently comprises some 26% of Modder East`s existing
mineral reserve and this down dip extension has the potential to substantially
increase Modder East`s current mine life of 10 years. This area can be accessed
utilising Modder East`s existing infrastructure, thereby minimising required
project capital, and remaining disconnected from the flooded historical mine
voids. The company intends confirming this down dip extension through a surface
exploration drilling programme. This acquisition provides Gold One and Goliath
Gold with an opportunity to replicate the successful development philosophy
employed at our Modder East Operation.
Going forward, Gold One will focus on ensuring that the gold operations return
to planned production levels and designed operational efficiencies. As
announced on 26 April 2012, operational capacity has been further enhanced with
the appointment of Wayne Robinson as Head of the Gold One Group`s South African
Operations. Wayne will provide mining expertise, leadership and guidance to the
group`s operations. Wayne has 25 years of experience in mining and was most
recently Managing Director for Eastern Platinum, where he was responsible for
all of Eastern Platinum`s South African operations and projects.
Financial Review
Cashflow Modder East Cooke Randfontein December
(Unaudited) Operations Underground Surface 2011
(US$ Operations Operations Quarter
Million) (US$ Million) (US$ (US$
Million) Million)
Gold Sales 48.87 28.33 8.99 56.09
Payment to
Operating
Suppliers -19.77 -35.03 -10.22 -16.53
and
Employees
Operating
Cash Flow 29.10 -6.70 -1.23 39.56
Development
and Capital -8.41 -6.68 -0.55 -11.27
Expenditure
Cash Flow
from 20.69 -13.38 -1.78 28.29
Operations
Group gold revenue for the March 2012 quarter amounted to US$ 86.19 million from
the sale of 60,507 ounces at an implied average price of US$ 1,424/oz. This
comprised 29,656 ounces of gold sold into the spot market at an implied average
price of US$ 1,648/oz and 30,851 ounces delivered into the Rand Uranium hedge
book at an implied average price of US$ 1,209/oz.
Payments to operating suppliers and employees totalled US$ 65.02 million for the
quarter, resulting in an operating cashflow of US$ 21.17 million. The Modder
East Operations contributed US$ 29.10 million to this cashflow and the Cooke
Underground Operations and Randfontein Surface Operations consumed
US$ 6.70 million and US$ 1.23 million of this cashflow, respectively. The Cooke
Underground Operation and Randfontein Surface Operation are expected to
contribute positively to group cashflow in the short term as their turnaround
strategies progress.
Group development and capital expenditure totalled US$ 16.06 million with the
Modder East Operations, Cooke Underground Operations and Randfontein Surface
Operations expenditure totalling US$ 8.41 million, US$ 6.68 million and US$ 0.55
million, respectively.
Cashflow from operations for the March 2012 quarter therefore totalled US$ 5.53
million.
Gold One ended the quarter with a cash balance of US$ 147.61 million (including
restricted cash of US$ 31.74 million, which increased from the
previous quarter due to the inclusion of the rehabilitation provisions for the
Cooke Operations) compared to a cash balance of US$ 230.24 million (including
restricted cash of US$ 4.40 million) at the end of the December 2011 quarter.
This amounts to a decrease of 34% in the cash balance when the December 2011 and
March 2012 quarters are compared. In addition to the cash balance, the company
ended the quarter under review with gold receivables amounting to US$ 8.26
million. At quarter end, Gold One reflected long term debt of US$ 75 million
comprising the shareholder loan received in late March 2012.
Major cash movements during the quarter, not detailed above, related to:
The first tranche of payments for the purchase of Rand Uranium, which amounted
to US$ 137 million, was paid out of the cash reserves of the company on 6
January 2012
Gold One settling all of the existing Rand Uranium debt upon the change of
control of Rand Uranium. Following the settlement of this debt, the net cash
acquired in the transaction amounted to US$ 5.53 million.
The settlement of success fees amounting to US$ 16.84 million following the
closing of the Jintu and Rand Uranium transactions. These fees were included as
payables and costs in the 31 December 2011 financial statements.
A payment of US$ 2.68 million in full and final settlement of the Grinaker
dispute detailed in note 30 of the Gold One 2011 Annual Report. The annual
report was released on 29 February 2011 on the ASX Limited`s Market
Announcements Platform ("ASX MAP"), the JSE Limited`s Securities Exchange News
Service ("JSE SENS") and the Gold One website.
A loan of US$ 5 million advanced to First Uranium in March 2012 in terms of the
acquisition agreement of First Uranium (detailed in Section 5.3.)
A shareholders loan received by Gold One during March 2012 from its majority
shareholder to the value of US$ 75 million
During the quarter under review the following were also paid:
Payments in relation to the company`s exploration activities amounting to US$
1.55 million
Annual bonuses to the value of US$ 2.75 million to executives and employees.
The annual bonus is payable on the finalisation of the company`s results for the
previous year.
A profit before tax of approximately US$ 7 million was declared for the March
2012 quarter. The profit is before accounting for the purchase price allocation
of the Rand Uranium acquisition and the international financial reporting
standards treatment of the Black Economic Empowerment structures.
The Rand Uranium hedge book at 31 March 2012 totalled 126,073 ounces at an
average deliverable price of US$ 1,338/oz (1).
The hedge price is quoted as ZAR/oz. Therefore the hedge price has been
converted at the Gold One budgeted exchange rate for 2012 of ZAR 7.47/US$ 1.
For the release with pictures and schematics of Gold One Group Gold Sales and
Revenue please refer to the Company`s website hosted at www.gold1.co.za.
Group Operational Review
During the quarter under review, gold production for the Gold One group amounted
to 61,625 ounces. This was 85% higher than production achieved during the
December 2011 quarter and 9% or 6,375 ounces less than the quarterly forecast of
68,000 ounces.
March 2012 December 2011 Variance
Quarter Actual Quarter Actual
Gold One Group 61 625 oz 33 352 oz 28 273 85%
oz
Production for the March 2012 quarter now includes the producing Cooke
Underground Operations and Randfontein Surface Operations acquired from the
shareholders of Rand Uranium via a transaction that closed on 6 January 2012
(see Section 5.2.).
March 2012 March 2012 Variance
Quarter Quarter
Actual Guidance
Modder East 31 128 oz 34 000 oz -2 872 -8%
Operations oz
Cooke Underground 23 171 oz 26 000 oz -2 829 -11%
Operations oz
Randfontein Surface 7 326 oz 8 000 oz -674 -8%
Operations oz
Total 61 625 oz 68 000 oz -6 375 -9%
oz
For the release with pictures and schematics of Quarterly Group Gold Production
please refer to the Company`s website hosted at www.gold1.co.za.
Modder East Operations
Modder East March 2012 December 2011
Quarter Quarter
Ore Mined 116 514 t 194 760 t
Underground
Mined Grade 7.39 g/t 7.10 g/t
Milled Tonnes 139 115 t 167 308 t
Recovered Grade 6.80 g/t 6.20 g/t
Gold Recovery 95% 96%
Gold Produced 31 128 oz (1) 33 352 oz
Cash Cost (2) US$ 683/oz US$ 468/oz
(1)Includes714 ounces produced at Modder East by the treatment of 35,731 tonnes
of low grade development ore at a recovered grade of 0.64 grams per tonne.
(2)Cash cost refers to all costs directly associated with mining activities,
mine administration, processing and refining.
3.1.1. Modder East: Operational Review
Total production volumes for reef mined at Modder East during the March 2012
quarter amounted to 124,333 tonnes at an average grade of 6.94 grams per tonne,
of which Black Reef mining contributed 116,514 tonnes of ore at an average grade
of 7.39 grams per tonne. The 14% decrease in Black Reef grade was largely the
result of significantly increased tonnage from on-reef development and a reduced
tonnage from stoping activities, resulting in a higher total dilution of mined
grade. Footwall development that mined through the underlying Middle Kimberley
Reef horizons contributed 7,819 tonnes at an average grade of 0.37 grams per
tonne. The reduction in low grade Middle Kimberley Reef mined relative to the
36,406 tonnes mined in the December 2011 quarter was in line with planning and
is expected to decrease further during the June 2012 quarter as footwall
development moves out of the mineralised Middle Kimberley Reef horizons. At the
end of the March 2012 quarter, a surface stockpile of approximately 16,000
tonnes of low grade development ore from the Middle Kimberley Reef horizons
remained available for processing during the June 2012 quarter.
For the release with pictures and schematics please refer to the Company`s
website hosted at www.gold1.co.za.
Overall gold production at Modder East for the quarter was 8% or 2,872 ounces
below the quarter`s forecast primarily due to the loss of nine production
shifts, which resulted from the Congress of South African Trade Unions (COSATU)
protected strike, the unprotected strike action of 500 employees following
disciplinary action taken against six employees, and mine-wide safety stoppages
imposed by the DMR.
The cash cost for the quarter increased to US$ 683/oz from US$ 468/oz for the
December 2011 quarter due to lower than expected mining volumes, a quarter on
quarter exchange rate movement from ZAR 8.12/US$ 1 to ZAR 7.74/US$ 1, and
reduced mining grades as described above. While increasing mining volumes
expected in the June 2012 quarter will be the biggest contributor to reducing
unit costs, coupled with the resulting improvement in unit efficiencies,
significant additional cost control measures were implemented during the March
2012 quarter and are expected to improve the proactive side of cost management.
The Modder East Operations` progressive LTIFR for 2012 to the end of the March
2012 quarter amounted to 1.39. Management and stakeholders have increased short
interval controls and are confident that safety performance can be restored to
customary levels, well below the Australian benchmark of 1 LTIFR.
3.1.2. Modder East: Stoping and Ledging
A total of 29,104 square metres was mined during the March 2012 quarter. The
reduction in squares metres mined was a result of the production shifts lost due
to protected, unprotected and safety related stoppages experienced during the
quarter as well as a slower than anticipated ramp up in production following the
December festive season break. The slower ramp up saw reduced blasting
frequencies across most underground panels, however, this was resolved during
the quarter and is expected to not further negatively impact on operations
during the June 2012 quarter. A continued focus on quality mining resulted in
stoping widths being reduced by a further 5% over the quarter, with the average
mined stoping width totalling 123 centimetres compared to the previous quarter`s
average mined stoping width of 130 centimetres.
For the release with pictures and schematics please refer to the Company`s
website hosted at www.gold1.co.za.
3.1.3. Modder East: Development
A focus on on-reef development facilitated a quarter on quarter increase of 44%
to 451 metres. This focus was largely on opening up additional reserves to the
east and west of current mining areas and on accessing planned higher grade
areas along the shoreline extension. At the end of the quarter 129,801 square
metres were available for mining, equating to approximately seven-and-a-half
months of required mining reserves at planned production rates, should no
further development be undertaken. Total off-reef development amounted to 657
metres, of which trackless off-reef development contributed 642 metres. Off-
reef development was also adversely impacted during the quarter due to lost
shifts and slower than expected ramp ups following the December festive season
beak. It is a management prerogative to increase waste development during the
June 2012 quarter through increased supervision and improved equipment
utilisation, which will largely be made possible as development ends continued
to move further away from reef production areas.
Both the east and west footwall drives had reached the North 4 line by the end
of the quarter, while reef production is currently taking place up to the North
3 line, which ensures far greater flexibility on trackless footwall development
than before.
For the release with pictures and schematics please refer to the Company`s
website hosted at www.gold1.co.za.
3.1.4. Modder East: Resources and Reserves
Gold One reported during the December 2011 quarter that the Modder East
Operations` mineral resource estimate for the Black Reef had been updated
considering the depletion of mined mineral resources during 2011, additional
mineral resources defined in the north-eastern portion of the orebody based on
the 2010 and 2011 surface exploration drill programme, and an increased cut-off
grade associated with increased costs. The mineral resources for the UK9a Reef
remained unchanged, however, due to anticipated increased costs, the UK9a
mineral resource was determined at an increased cut-off grade.
The updated mineral resource estimates were utilised to update the Modder East
life of mine plan completed during the quarter under review and associated
mineral (ore) reserves. The total life of mine plan now considers a 10 year
mine plan up to 2022. Modder East`s mineral (ore) reserves include 1.34 million
ounces (including 8.80 million tonnes grading at 4.74 grams per tonne), of which
0.11 million ounces (including 0.30 million tonnes grading at 11.12 grams per
tonne) are included in the proved mineral (ore) reserve category.
The total Black Reef (being the Buckshot Pyrite Leader Zone ("BPLZ") and Channel
Facies) mineral reserves decreased by 14% to 1 million ounces, attributed to
both depletion through mining as well as the application of higher cut-off
grades. The corresponding increase in grade as a result of higher cut-off
grades applied resulted in a grade increase of 22% to 5.11 grams per tonne.
Similarly, revised cut-off grades were applied to the UK9a Reef probable
reserves, resulting in a 7% decrease in total gold content to 0.35 million
ounces with a corresponding 12% grade increase to 3.93 grams per tonne.
Modder East Consolidated Reserve Table
Tonnes Grade Gold Content
(Mt) (g/t) (Moz)
Proved BPLZ + Channel Facies 0.30 11.12 0.11
(1)
Total Proved 0.30 11.12 0.11
Probable BPLZ + Channel Facies1 5.73 4.80 0.89
UK9a (2) 2.76 3.93 0.35
Total Probable 8.50 4.52 1.23
Total Reserve 8.80 4.74 1.34
(1) Audited by SRK Consulting (SA), quoted at a cut-off of 188 cmg/t
(gold price of US$1,636/oz and ZAR 7.49/US$ 1).
(2) Audited by SRK Consulting (SA), quoted at a cut-off of 179 cmg/t
(gold price of US$1,636/oz and ZAR 7.49/US$ 1).
As part of the recently announced deal with the joint provisional liquidators
representing Pamodzi Gold East Rand (Pty) Limited and its subsidiaries,
announced by Gold One and Goliath Gold jointly on the JSE SENS and ASX MAP on 17
April 2012, Gold One plans to apply for prospecting rights covering the area
that is immediately down dip and contiguous to Modder East. This largely
unmined area is highly prospective with surrounding mining data suggesting
continuity of the UK9a orebody. The UK9a Reef currently comprises some 26% of
Modder East`s existing mineral reserve. This down dip extension has the
potential to substantially increase Modder East`s current mine life of 10 years.
Gold One intends confirming this down dip extension through a surface
exploration drilling programme, which has the potential of increasing the
current Modder East mine life. The contiguous down dip extension could be
accessed through Modder East`s planned infrastructure, thus reducing the
requirement for additional project capital and remaining disconnected from
historical flooded underground workings.
3.1.5. Modder East: Metallurgical Plant
During the quarter under review, 174,846 tonnes were milled at the Modder East
Metallurgical Plant, reflecting a 4.5% increase compared to the previous
quarter`s 167,308 tonnes milled. Tonnes treated included 139,115 tonnes of Black
Reef, with the balance comprising 35,731 tonnes of low grade development ore.
Black Reef yielded recovered grades of 6.80 grams per tonne, while the total
tonnes milled yielded an average recovered grade of 5.54 grams per tonne. The
marginal 2.3% decrease in recovered Black Reef grades was largely due to the
lower mined grades. Metallurgical recoveries remained consistent at 95%.
Cooke Underground Operations
Cooke Underground March 2012
Quarter
Ore Mined 277 021 t
Underground
Mined Grade 4.60 g/t
Milled Tonnes 238 519 t
Recovered Grade 3.00 g/t
Gold Recovery 94%
Gold Produced 23 171 oz (1)
Cash Cost US$ 1 513/oz
(1)Includes 177 ounces produced at the Cooke Operations by the treatment of
11,277 tonnes of low grade development ore and mud.
Cooke Underground: Operational Review
At the beginning of 2012, Gold One concluded the acquisition of Rand Uranium
(detailed in Section 5.2.), consisting of the Cooke Underground Operations and
the Randfontein Surface Operations. In parallel to the current plan and budget
for the Cooke Underground Operations, an extensive two year turnaround strategy
is underway.
Gold production at the Cooke Underground Operations for the March 2012 quarter
was 23,171 ounces, being 11% or 2,829 ounces lower than forecast largely due to
lower than anticipated production volumes and grade. Increasing grade
flexibility remains a focus area of the planned two year turnaround programme
primarily through continued increasing development rates. Importantly, through
the cost initiatives already implemented at the operation, a 6% reduction in
quarter on quarter cash operating costs from US$ 1 617/oz to US$1 513/oz was
achieved despite recovered grades having decreased by 6% from 3.19 grams per
tonne to 3.00 grams per tonne. This was achieved through an aggressive
reduction in operating costs with a quarter on quarter reduction from ZAR 1,273
per tonne to ZAR 1,137 per tonne.
The total 23,171 ounces was produced from 249,796 tonnes milled at an average
recovered grade of 2.89 grams per tonne. Of the total tonnes milled, Cooke 1
milled 67,749 tonnes at an average recovered grade of 2.6 grams per tonne, Cooke
2 milled 75,596 tonnes at an average recovered grade of 3.15 grams per tonne,
and Cooke 3 milled 95,174 tonnes at an average recovered grade of 3.17 grams per
tonne. In addition, low grade underground mud and waste rock milled at the Cooke
Plant contributed 11,277 tonnes at an average recovered grade of 0.49 grams per
tonne. Excluding the low grade underground mud and waste rock, the recovered
grade for underground ore was 3.00 grams per tonne. A clear month on month
improvement in tonnes milled was visible during the quarter, and is expected to
be maintained during the June 2012 quarter. As mining volumes increase, further
reductions in unit operating costs are anticipated.
Although a consistent increasing monthly trend in terms of mined volumes was
observed during the quarter under review, the full benefit of this has not yet
been realised due to the lower than planned shaft call factors and plant
accountability. However, the benefits of a dedicated focus on the mine call
factor during the quarter as part of the turnaround strategy resulted in Cooke 1
achieving in excess of its budgeted mine call factor for the month of March.
Similarly, plant efficiencies and accountability are continually increasing and
are being further bolstered by the current implementation of a capital
programme.
For the quarter under review, the Cooke Underground Operations recorded an LTIFR
of 2.29.
For the release with pictures and schematics please refer to the Company`s
website hosted at www.gold1.co.za.
Cooke Underground: Turnaround Strategy
The Cooke Underground Operations are already benefitting from the implementation
of a detailed turnaround strategy. As shareholders were advised at the
acquisition announcement the expected timeline for a full turnaround is 2 years
of which this reporting period represents the first full quarter. For the next
two years, the company is targeting a sustainable profitability enhancement of
in excess of US$ 61 million per year. Achieving this turnaround strategy will
bring the operation in line with planned operating cash costs of approximately
US$ 1,000/oz by 2014, excluding co-product uranium benefits.
The turnaround project is progressing as per plan with most of the cost and
revenue initiatives finalised and already implemented. The cost and revenue
initiatives are being tracked and monitored on a daily basis and to date,
annualised benefits in excess of US$ 25 million have been realised. Some of the
initiatives currently being introduced via the turnaround strategy include:
Enhancing the mine call factor specifically on the Cooke 1 and Cooke 2 shafts
such that these are aligned with current performance at Cooke 3. This will be
achieved through enhanced mining and management controls as well as through a
water management strategy, which is currently being implemented on Cooke 1.
Increasing Doornkop Plant recovery and accountability factors through a joint
capital project with Harmony Gold Mining Company Limited ("Harmony"), expected
to be completed during July 2012.
Enhancing mineral resource management ("MRM") through staffing initiatives where
individual MRM managers will be introduced to each of the three shafts during
the June 2012 quarter. Each MRM manager will be responsible for all MRM aspects
pertaining to their respective shaft and will report directly to a centralised
MRM manager, resulting in an increased focus on quality mining at each shaft.
MRM managers will be further supported by the introduction of a new evaluation
manager, who was appointed on 16 April 2012.
Overhead cost management - approximately 73% of the savings synergies related to
overhead costs has been implemented. The remaining 27% is currently being
implemented and is planned to be completed by September 2012.
Cooke Underground: Stoping and Ledging
Square metres mined for the March 2012 quarter across all three shafts totalled
36,582 square metres representing a 9.5% increase relative to the December 2011
quarter. Despite the quarter on quarter improvement, the stoping performance
was generally adversely impacted during January 2012 and to a lesser extent
during February 2012 by an initial slow start up following the December festive
holidays. The underperformance in square metres mined was particularly impacted
by the decision to cease mining on five panels at Cooke 2 where mining of a
carbonaceous reef was being undertaken where extremely poor mine call factors
were achieved. Although this decision positively impacted on grade and hence
also unit costs, the lack of mining flexibility prevented the immediate
replacement of these panels.
Increasing mining flexibility remains a priority focus of the turnaround
strategy to facilitate both increased grade and volumes. During the quarter
under review, the average monthly face length mined was 1,531 metres,
effectively demonstrating an increase in mining flexibility of some 5% during
the quarter. The most significant improvement was recorded at Cooke 3, where
the average mined face length increased by some 43%. The increase in face
length and associated mining flexibility is being driven by the implementation
of an aggressive exploration development programme, accompanied by sustained
high levels of development across all three shafts.
For the release with pictures and schematics please refer to the Company`s
website hosted at www.gold1.co.za.
For the March 2012 quarter, the average face advance at the operations amounted
to 7.97 metres. Improvement in face advance also forms a key focus parameter of
the turnaround strategy. Average face advance is anticipated to continually
improve with increased flexibility by reducing the number of mining panel
changes that mining teams undertake during each month, as well as the
implementation of the same stoping bonus system that has been successfully
employed at the Modder East Operations.
Mined and recovered grades were adversely impacted during the quarter due to
excessive in-stope dilutions. Reducing these dilutions remains a core focus as
part of the turnaround strategy and during the quarter under review the stope
width decreased by 10.3 centimetres, averaging 178.9 centimetres for the
quarter. This reduction in stope width was reflected across all three shafts,
with Cooke 3 recording the greatest stope width reduction of 36.3 centimetres
over the quarter. The Cooke Underground Operations will continue to focus on
quality mining practices to further minimise dilution, increase grade and reduce
unit operating costs.
Vamping, a mining method used to recover residual higher grade ore left in mined
stopes, has reflected a month on month improvement during the quarter with
vamped kilograms increasing from 15.6 kilograms in January 2012 to 45.5
kilograms in February 2012, and 66.6 kilograms in March 2012. This generated
approximately 4,105 ounces during the quarter. Management is continuing to
focus on vamping measures to ensure that improvements continue into the June
2012 quarter.
Cooke Underground: Development
During the March 2012 quarter, off-reef development for the Cooke Underground
Operations totalled 1,819 metres. This represents a 10% increase on the
previous quarter`s development rates and is planned to further increase with the
commissioning of two rail bound development drill rigs at Cooke 3 during the
June 2012 quarter. Future off-reef development at Cooke 2 will focus on opening
up the highly prospective K9 Reef horizon in order to increase mining
flexibility for the shaft. On-reef development achieved during the quarter
amounted to 2,611 metres; a significant 25% increase compared to the December
2011 quarter. This on-reef development is considered critical for providing
near term mining flexibility through the opening up of additional mineable
ground. Furthermore, this development has targeted known higher grade areas of
the mining operations, thereby facilitating future increased production volumes
and associated grades. On-reef exploration also forms part of the operations`
exploration programme, especially for the "secondary reefs", which are highly
channelised (most notably the Ventersdorp Contact Reef ("VCR") and Kimberly
Reefs). Due to the high levels of channelisation, exploration drilling success
is limited. Exploration through on-reef development facilitates the rapid
opening up of new minable ore reserves.
Development sampling results for the quarter yielded promising potential new
mining areas to support the planned production ramp up profile associated with
both the primary Upper Elsburg Reef ("UE1A") horizon and historical "secondary
reef horizons" such as the VCR, K4 and K9 reefs, as tabled below. Significant
uranium grades, particularly associated with the UE1A across Cooke 2 and Cooke 3
and the A5 Elsburg and K4 Kimberly reefs at Cooke 3, will facilitate the
continued enhancement of the co-product uranium strategy, facilitating decreased
unit gold operating costs.
The establishment of these development ends as new mining areas will
significantly impact on the future flexibility of the Cooke Operations.
Gold Uranium
Reef Sample CW g/t cmg/t SW g/t kg/t cmkg/
Type d (M) (SW) (SW) t
UE1A 258 131 7.23 950 151 6.27 0.167 28.14
E8 90 193 2.41 464 213 2.18 0.082 17.56
K9 189 205 2.69 550 225 2.45 0.122 27.36
COOKE 537 168 4.34 728 188 3.88 0.127 25.67
1
VCR 127 99 11.19 1108 100 11.08 N/A N/A
UE1A 248 112 3.51 392 132 2.98 0.180 23.67
K9 84 179 6.50 1165 199 5.85 0.060 12.03
COOKE 459 121 6.07 732 135 5.42 0.111 14.98
2
VCR 372 32 14.84 477 100 4.77 0.078 7.76
UE1A 238 137 12.20 1668 157 10.64 0.624 97.88
A5 147 207 2.50 517 227 2.28 0.331 75.14
K4 167 70 28.56 2010 100 20.10 0.288 28.82
COOKE 924 94 11.38 1067 135 7.91 0.337 45.50
3
COOKE 1920 121 7.38 892 150 5.95 0.227 33.19
OPS
Notes:
The sampling interval for on-reef development is 3 metres.
Average values for individual reef ends are calculated by averaging all sample
sections within the development end. Averages per reef horizon and shaft are
determined based on weighted averages according to sampled metres.
The theoretical stoping width used is based on a minimum stoping width of 100
centimetres, or channel width plus 20 centimetres (10 centimetres above and
below the reef, with a minimum width of 100 centimetres.)
At Cooke 1 Shaft, 537 metres of on reef development were sampled and assayed for
gold, only 402 metres of the 537 metres were also sampled and assayed for
Uranium.
Cooke Underground: Exploration
During the March 2012 quarter, 23 underground exploration boreholes amounting to
3,893 metres were drilled at the Cooke Underground Operations at a total cost of
US$ 0.4 million.
Cooke 1
One exploration borehole was drilled at Cooke 1 during the quarter. Assay
results are still outstanding and will be reported during the June 2012 quarter.
The balance of the exploration carried out on Cooke 1 during the quarter focused
on reef development (refer to Section 3.2.4.).
Cooke 2
Twelve underground exploration boreholes were completed at Cooke 2 during the
quarter. Three assay results have been received to date from boreholes
targeting the UE1A conglomerate and these have all yielded promising results
ranging between 15.7 grams per tonne and 39.6 grams per tonne over a mining
width. On the basis of these results, further exploration targeting selected
areas of the UE1A at Cooke 2 is continuing.
The highly channelised nature of the VCR does not lend itself to exploration
drilling as an optimal exploration method. On-reef development is the preferred
technique, which simultaneously opens up new ore reserves. As such, the VCR
exploration drilling programme at Cooke 2 is primarily aimed at defining the
VCR`s structure as a guide for on-reef development. Nine underground
exploration boreholes were drilled during the quarter under review of which
assay results for four of the boreholes have been obtained. In addition to the
underground drilling programme, a surface exploration drilling programme
comprising seven boreholes has been planned to define the VCR sub-crop position.
This programme will further refine and confirm the reef`s continuity at depths
of between 300 metres and 500 metres below surface, and will facilitate mine
design and increased effectiveness of on-reef exploration development drives.
The total surface drilling project comprises 3,100 metres with individual
borehole lengths ranging between 350 metres and 510 metres. The surface
exploration drilling is anticipated to start during the June 2012 quarter.
Shaft Borehole Target Status Gold Minin
Name Reef g
Width
3
cmgt/ g/t cw2
t (sw)1
Cooke C2_90_G106 UE1A Complete 4157 39.59 85 105
2 8
Cooke C2_90_G105 VCR Complete 6 0.06 64 100
2 3
Cooke C2_90_G106 UE1A Complete 1565 15.65 21 100
2 7
Cooke C2_90_G106 VCR Complete 478 4.78 25 100
2 7
Cooke C2_90_G105 VCR Complete 5 0.05 22 100
2 2
Cooke C2_90_G105 VCR Complete 404 4.04 34 100
2 1
Cooke C2_90_G102 UE1A Complete 2000 20.00 26 100
2 8
Cooke C2_90_G109 VCR Complete Results Pending
2 8
Cooke C2_90_G109 VCR Complete Results Pending
2 7
Cooke C2_90_G109 VCR Complete Results Pending
2 6
Cooke C2_90_G109 VCR Complete Results Pending
2 5
Cooke C2_90_G109 VCR Complete Results Pending
2 4
Represents the average grade over the true mining width (thickness) of the total
reef, calculated using weighted average of assayed grade from individual samples
over the total channel thickness (individual sample lengths are typically
between 15 centimetres and 30 centimetres) and diluted at 0 grams per tonne to
achieve mining grade.
Channel thickness represents the true, dip corrected thickness of the Reef. Dip
corrections are undertaken based on dip measurements from core bedding angles.
Stope width equals channel width +20 centimetres with a minimum stope width of
100 centimetres.
For the release with pictures and schematics of Cooke Surface Exploration Holes
Indicating the VCR Mined Out Area and Proposed Boreholes please refer to the
Company`s website hosted at www.gold1.co.za.
Cooke 3
During the March 2012 quarter, 10 exploration boreholes were completed at Cooke
3, nine of which were in the UE1A section and one of which was in the Middle
Elsburgs E8 section. These boreholes targeted existing inferred and indicated
mineral resources with a view to increase confidence in these areas and
ultimately convert them to mineral (ore) reserves. During the quarter, assay
results for seven of the boreholes were returned with four of these indicating
grades in excess of 6 grams per tonne over a mining width, confirming the high
levels of prospectivity of the targeted area.
Borehole C3_128_G1831 was drilled into the Middle Elsburg formation targeting
the E8 Reef horizon. Although the E8 has been extensively mined at Cooke 1 and
previously mined at Cooke 2, little information exists regarding this reef at
Cooke 3. Selective exploration will continue on the E8 to assess the potential
of this reef.
Shaft Borehole Target Status Gold Mini
Name Reef ng
Widt
h3
cmgt/t g/t cmg
(sw)1 t
Cooke C3_128_G1 E8 Complete 14 0.14 47 100
3 831
Cooke C3_128_G1 UE1A Complete 33 0.18 162 182
3 858
Cooke C3_128_G1 UE1A Complete 1234 7.17 152 172
3 862
Cooke C3_128_G1 UE1A Complete 1058 6.53 142 162
3 863
Cooke C3_128_G1 UE1A Complete 48 0.26 165 185
3 864
Cooke C3_128_G1 UE1A Complete 147 0.79 166 186
3 865
Cooke C3_128_G1 UE1A Complete 995 9.95 80 100
3 844
Cooke C3_128_G1 UE1A Complete 3497 6.29 536 556
3 871
Cooke C3_128_G1 UE1A Complete Reef Faulted Out
3 866
Cooke C3_128_G1 UE1A Complete Reef Faulted Out
3 882
Represents the average grade over the true mining width (thickness) of the total
reef, calculated using weighted average of assayed grade from individual samples
over the total channel thickness (individual sample lengths are typically
between 15 centimetres and 30 centimetres) and diluted at 0 grams per tonne to
achieve mining grade.
Channel thickness represents the true, dip corrected thickness of the reef. Dip
corrections are undertaken based on dip measurements from core bedding angles.
Stope width equals channel width +20 centimetres with a minimum stope width of
100 centimetres.
Cooke Underground: Doornkop Plant
During the quarter under review, underground reef from the Cooke Underground
Operations was treated at the Doornkop Plant as well as at the Cooke Gold Plant.
21,578 tonnes from Cooke 1 and 11,277 tonnes of low grade waste rock and
underground mud were treated at the Cooke Plant and are discussed in Section
3.3.1.
Gold One has a toll treatment agreement with Harmony for the treatment of
material from all three Cooke shafts at the Doornkop Plant. During the quarter
under review, some 216,941 tonnes were milled and treated at the Doornkop Plant
at a total recovered grade of 3.077 grams per tonne. Of the total tonnes
milled, Cooke 1 milled 46,171 tonnes at an average recovered grade of 2.6 grams
per tonne (the balance of 21,578 tonnes was treated at the Cooke Plant owing to
capacity constraints at the Doornkop Plant), Cooke 2 milled 75,596 tonnes at an
average recovered grade of 3.15 grams per tonne, and Cooke 3 milled 95,174
tonnes at an average recovered grade of 3.17 grams per tonne. Plant
accountability for the quarter reflected a month on month increase from 89.7% in
January 2012, to 94.9% in February 2012 and to 97.7% in March 2912, resulting in
the plant operating close to design by the end of the March 2012 quarter. The
average recovery rate for the quarter was 94.2%.
Additional improvements to plant accountability are expected during the June
2012 quarter as the plant continues to operate at a steady state. Harmony has
also embarked on a capital project to refurbish the Doornkop Plant. The project
will be completed in three phases, of which phase 1 will be completed during the
June 2012 quarter. The main focus of phase 1 will be to improve feed throughput
and retention times as well as carbon management. This will improve residue
grades and decrease working costs. Phases 2 and 3 of the refurbishment will
focus on maintaining the plant at suitable sustainable levels and will conclude
towards the second half of 2012.
Randfontein Surface Operations
Randfontein March 2012
Surface Quarter
Reclaimed 0.434 g/t
Grade
Milled Tonnes 756 390 t
Recovered 0.301 g/t
Grade
Residue Grade 0.133 g/t
Gold Recovery 69.3%
Gold Produced 7 326
Cash Cost US$1 388
Randfontein Surface: Operational Review
The Cooke Gold Plant has been processing the mechanically reclaimed Dump 20 sand
at some 300,000 tonnes per month for the recovery of gold for the past five
years, with the residues being deposited onto the Cooke Tailings Dam. The plant
is a conventional gold recovery circuit with milling of the coarse sand feed in
a closed circuit. The plant is able to mill both reef from the Cooke Underground
Operations and sand material from Dump 20. The historical gold head grade for
the reclaimed Dump 20 material has averaged 0.44 grams per tonne with recoveries
averaging 72% for a residue grade of 0.123 grams per tonne, which is among the
lowest in the South African industry for these types of surface treatment
operations.
During the quarter under review, the Cooke Plant treated 789,245 tonnes of which
756,390 tonnes came from Dump 20 sand, 21,578 tonnes came from Cooke 1 and
11,277 tonnes from underground low grade waste rock and mud. The plant produced
9,306 ounces of which 7,326 ounces were attributable to the reclamation of Dump
20 and 1,804 ounces to Cooke 1 ore and the balance of 176 ounces to the low
grade waste rock and mud.
Production was negatively impacted during the quarter as a result of non-
performance of a contractor appointed to install and operate a conveyor based
sand transportation and rail loading system, which was planned to replace the
more expensive existing loading and hauling system. It was eventually decided
to terminate this contract and revert to the previous arrangement for the
remaining life of the Dump 20 sand operation.
In addition, elevated acidity levels in the dump also negatively impacted gold
recovery by some 3% due to varying quantities of a ferrous iron complex that
aggressively consumes and depletes the cyanide in the leach circuit, resulting
in significant reduction in cyanide available for gold dissolution and thus a
reduction in gold recovery. A possible metallurgical solution has been
identified following extensive metallurgical test work and will be tested during
the June 2012 quarter.
Gold production for the treatment of the surface material from Dump 20 was 8% or
674 ounces lower than forecast largely due to lower volumes delivered to the
plant as a result of temporary reclamation issues, together with the
metallurgical problems experienced. The overall head grade for the quarter for
the sand feed only (i.e. excluding the underground tonnage treated) averaged
0.434 grams per tonne with a residue of 0.133 grams per tonne for an overall
recovery of 69.3%.
For the period under review the Randfontein Surface Operations recorded a LTIFR
of 1.83.
Randfontein Surface: Turnaround and Growth Strategy
The Randfontein Surface Operation has embarked on a turnaround strategy that is
focused on improving efficiencies and reducing costs. This will be implemented
throughout the 2012 year. Gold One is currently also investigating the
feasibility of increasing reclaimed and processed tonnage from 300,000 tonnes
per month of a sand feed, to 400,000 tonnes per month of a sand and slime feed,
in the ratio of 1:3, thereby reducing unit costs and increasing gold produced.
Minor plant modifications are required mainly in the material reception area
prior to milling as well as for additional carbon transfer screens in the
adsorption section.
Feasibility studies considering the proposed increased reclamation projects
including the required deposition capacity are currently being undertaken, and
are planned for completion by year-end. In addition, the company is currently in
progress with a feasibility study related to a greenfield deposition site called
Geluksdal.
Randfontein Surface: Resources and Reserves
The current surface resources are the subject of a detailed review including a
drilling programme. Updated surface mineral resources are anticipated to be
completed during the December 2012 quarter, while resource models for the Dump
20 sand and slime deposits have been fast tracked and are expected to be
completed during the June 2012 quarter. At Dump 20, 35 exploration boreholes
were drilled during the March 2012 quarter to evaluate the slimes resource
located beneath Dump 20. The exploration boreholes were drilled on a 100 metre
by 100 metre grid pattern across the extent of the old slimes dam and will
inform the updated resource models.
In addition, exploration drilling and metallurgical test work was carried out at
the Millsite Slimes Complex and the No. 4 Dam with a view to better define the
resource models for each of the three project sites. This drilling will
continue into the June 2012 quarter and, in addition, a reinvestigation of the
Lindum Slimes Complex will also commence.
Development and Exploration Projects
4.1. Modder North
Modder North, located approximately six kilometres north of Modder East, falls
within Modder East`s current mining lease area. The Modder North exploration
programme commenced during 2011 and is focused on testing both the shallow (less
than 500 metres) unmined areas of the Main Reef as well as potential Black Reef
occurrences north of the current Modder East Operations. During the March 2012
quarter, assay results for the remaining deflections from borehole MN2 and
initial results from MN7 and MN 11 were received. These are illustrated in the
table below. Well mineralised Main Reef was intersected in Borehole MN7 and
although the reef width intersected is thin, resulting in a lower grade once
diluted to a mining width, the high levels of mineralisation confirm the
presence of well mineralised Main Reef with thicker channelised areas comprising
the primary exploration target.
The drill progamme has increased significantly during the year so far with four
permanent rigs now employed at the project and a total of 3,807 metres having
been completed during the quarter under review. Three of the initial 10 planned
boreholes have been completed and assay results are expected early in the June
2012 quarter, while a further four boreholes are in progress. The completed
boreholes, MN10 and MN12, intersected well developed Main Reef and borehole MN10
also intersected the Black Reef, the results of which are also pending. MN29
intersected a large intrusive associated with poor ground conditions, resulting
in this borehole being prematurely stopped.
BH_ID Reef Depth (m) Dip Corrected
Bottom
Contact
Channel g/t** cm.g/t
Thickness
(cm)*
MN_2 3D BPLZ 166.38 25.00 0.80 20
MN_2 4D BPLZ 168.32 48.00 3.88 185
MN7 BPLZ 158.72 16.00 0.29 5
MN7 Main Reef 464.13 21.67 8.13 176
MN7 1D Main Reef 463.69 28.01 9.87 276
MN7 2D Main Reef 463.28 13.86 10.20 141
MN11 BPLZ 149.19 18.00 0.17 3
MN11 Main Reef 446.29 44.43 0.38 17
MN11 1D Main Reef 446.54 70.51 1.39 98
MN11 2D Main Reef 445.43 33.48 0.57 19
*Channel thickness represents the true, dip corrected thickness of the Reef. Dip
corrections are undertaken based on dip measurements from core bedding angles.
**Represents the average grade over the true thickness of the total reef,
calculated using a weighted average of assayed grade from individual samples
over the total channel thickness (individual sample lengths are typically
between 15 centimetres and 30 centimetres).
The project`s total exploration expenditure for the quarter under review
amounted to US$ 0.49 million.
In addition to the ongoing surface exploration drilling, conceptual economic
studies are currently underway to consider optimal access options to the
potential Modder North target. The longest lead item for the commencement of
construction at the project is the updating of the environmental management plan
that was initially developed for the Modder East mining licence area in order to
incorporate Modder North. In this regard, during the December 2011 quarter a
basic assessment application was submitted to the relevant authorities and the
required specialist environmental studies commenced.
4.2. Ventersburg
In the Gold One December 2011 Quarterly Report, the company reported the
successful completion of the drilling of the shallow, eastern extension of the A
Reef payshoot in the Ventersburg project area. Although the extent of the
payshoot remains open-ended towards the north and the east, the results of
December`s drilling were used to update the geological model for Ventersburg and
a new resource was declared during the December 2011 quarter. The updated model
and new resource estimate underpinned an updated pre-feasibility study, which
was completed by Turgis Consulting (Pty) Limited during December 2011.
The company commenced with a feasibility study during the March 2012 quarter
with a view to complete all feasibility study related work by the March 2013
quarter. One of the key focuses of the feasibility study is infill drilling, the
bulk of which is targeted within the area that defines the first five years of
stoping. The infill drilling area, which is depicted in the image below as the
area within the blue dotted line, will allow for the refinement of the
geological and grade distribution models for Ventersburg. Initial infill
drilling is targeting a borehole spacing of approximately 250 metres over the
initially planned mining area. This drilling is anticipated to greatly reduce
the risks associated with the startup of a potential new mine through better
delineation of higher grade channel areas.
For the release with pictures and schematics of Ventersburg 2012 Infill Drilling
Programme please refer to the Company`s website hosted at www.gold1.co.za.
During the March 2012 quarter, a total of 5,050 metres of exploration drilling
was carried out at a total cost of US$ 1.01 million.
Assay results were received during the quarter under review for boreholes AFO059
and AFO048. These boreholes represent the final drilling of the eastern
payshoot extension undertaken during 2011 (refer to figure above for borehole
localities) and the relatively higher grades intersected in borehole AFO059 have
confirmed the open ended nature of the easternmost payshoot area.
Ventersburg March 2012 Quarter Assay Results
BH_ID Reef Depth (m) Dip Gold
Bottom Corrected
Contact
Channel g/t** cm.g/t
Thickness
(cm)*
AFO059 A Reef 711.80 176 3.69 648
AFO059_2D A Reef 711.87 209 3.26 681
AFO059_3D A Reef 711.47 176 3.52 619
Average: 187 3.48 649
AFO048 A Reef 1032.29 108 2.26 245
AFO048_1D A Reef 1032.24 129 1.49 193
AFO048_2D A Reef 1032.21 150 1.65 247
Average: 129 1.77 228
AFO057 A Reef Results Pending
AFO065 A Reef
AFO046 A Reef
AFO064 A Reef
*Channel thickness represents the true, dip corrected thickness of the reef. Dip
corrections are undertaken based on dip measurements from core bedding angles.
**Represents the average grade over the true thickness of the total reef,
calculated using a weighted average of assayed grade from individual samples
over the total channel thickness (individual sample lengths are typically
between 15 centimetres and 30 centimetres).
4.3. Tulo
During the December 2011 quarter, the primary focus at the Tulo project was the
completion of the construction of a 20 kilometre drill rig access road into the
Tulo concession area. While this was successfully completed, abnormally heavy
rainfalls during the March 2012 quarter (2,340 millimetres) resulted in partial
damage to the road in areas where permanent drainage had not yet been installed.
Repairs to the access road were completed shortly after the end of the quarter
under review and have delayed the planned commencement of drilling by
approximately two months. The drill contractors, Discovery Drilling Contractors
Africa (Pty) Limited, will assess the exploration terrain during April and May
2012 to finalise the type of equipment required for the drilling programme.
Drilling is now planned to commence at the end of May 2012.
For the release with pictures and schematics please refer to the Company`s
website hosted at www.gold1.co.za.
The results of the high resolution helicopter-borne geophysical survey
undertaken during the December 2011 quarter were processed and received at the
end of March 2012. The survey included magnetic, radiometric and digital
elevation model surveys and a total of 6,365 line kilometres was flown.
Interpretation of these survey results is ongoing. To date, the study has
specifically focused on prominent magnetic lineaments that are evident on the
plot files generated from the geophysical survey. These anomalies will be
investigated during the June 2012 quarter in order to assess their geological
significance and will guide the initial drilling programme.
The total exploration expenditure at Tulo for the March 2012 quarter has
amounted to US$ 0.28 million.
4.4. Cooke Uranium Project
Through Gold One`s purchase of Rand Uranium, the group has 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.
During the December 2011 quarter, Gold One announced that Bateman and that MDM
were separately conducting validations of the definitive feasibility study
originally compiled by Bateman for Rand Uranium for the construction of a
uranium plant. As part of the study`s review, both Bateman and MDM are also
examining the recovery of gold as well as the use of resin-in-pulp as an
alternative processing technology to counter current decantation for uranium
recovery. The reviews of the definitive feasibility studies from both Bateman
and MDM were completed during the quarter under review and these are currently
being considered by Gold One. A decision will be made during the June 2012
quarter as to which of the two companies will be contracted to complete the
feasibility study, including advancing gold recovery to the same level of
accuracy. Completion of the definitive feasibility study is expected during
the December 2012 quarter and, pending a positive outcome of this study,
construction on the project will commence during 2013.
4.5. Gold Fields Joint Venture
On 24 January 2011, Gold One announced that it had entered into a memorandum of
understanding with Gold Fields to investigate the feasibility of establishing a
joint venture in which both parties will contribute surface tailings deposits in
the West Rand of Johannesburg for retreatment. These joint tailing are expected
to comprise in excess of 700 million tonnes and represent over 60% of the total
tailings material in the region.
The scoping study is progressing well with both Gold Fields and Gold One`s
extensive economic studies having been reviewed. Initial conceptual flow sheets
with associated mass balances have been developed. The parties expect to
complete a detailed scoping study by the end of June this year, whereupon a
decision will be taken on whether to progress the study to a feasibility level.
Corporate Development
5.1. Goliath Gold (Formerly WWR)
On 20 March, 2012, Gold One and Goliath Gold announced that the acquisition of
Gold One`s Megamine assets by Goliath Gold had been declared unconditional, with
Goliath Gold acquiring Megamine on 28 March 2012 for an acquisition
consideration of ZAR 262,229,868. This consideration was settled by way of the
issue of 104,891,947 Goliath Gold ordinary shares. Gold One, through its wholly
owned subsidiary Gold One Africa Limited ("Gold One Africa"), has now acquired a
controlling interest in Goliath Gold.
In terms of the Takeover Regulations published in terms of the Companies Act,
2008 (Act 71 of 2008) Gold One Africa, as a majority shareholder of Goliath
Gold, was obligated to make a mandatory offer to Goliath Gold minority
shareholders. The mandatory offer closed post the end of the March 2012 quarter
on 20 April 2012. Goliath Gold shareholders holding 1,215,300 Goliath Gold
shares accepted the offer. Consequently, 1,012,750 Gold One ordinary shares
were issued to Goliath Gold shareholders. At the time of publication of this
quarterly report, Gold One Africa now has a shareholding of 106,107,247 Goliath
Gold ordinary shares, constituting 72% of the companies issued share capital.
The increase in the issued share capital to 147,354,905 ordinary Goliath Gold
shares increased the market capitalisation of Goliath Gold from just under ZAR
200 million to over ZAR 589 million (US$ 78 million) as at 30 April 2012.
The closing of this transaction has allowed for the value of the medium-depth
Megamine assets to be fully realised without detracting from Gold One`s stated
strategy of developing shallow resources. Goliath Gold`s success has also been
bolstered by the management agreement and synergies that it shares with Gold
One, which allow for the companies to share expertise, management and costs.
5.2. Rand Uranium
As was announced by the company on 9 January 2012, the acquisition of 100% of
Rand Uranium for a purchase price of US$ 250 million closed on 6 January 2012
(the "Completion Date") following the fulfillment of all conditions precedent.
US$ 137 million of the purchase price was settled on the Completion Date in
cash.
Gold One was granted the option of settling US$ 100 million of the US$ 250
million purchase price for Rand Uranium either in cash or through the issue of
new fully paid ordinary shares in Gold One. The company elected to settle the
remaining acquisition consideration in cash.
Subsequent to the close of the March 2012 quarter, on 3 April 2012, Gold One
announced that it had secured financing through a financing agreement with
Investec, which was originally signed on 29 August 2011, as well as through a
US$ 75 million unsecured shareholder loan facility granted by Baiyin Precious
Metals, a wholly owned subsidiary of Baiyin Nonferrous. The shareholder loan,
together with the Investec facility, have allowed Gold One to settle the
outstanding balance of approximately US$ 113 million payable by it in respect of
its acquisition of Rand Uranium.
The Investec facility and shareholder loan also provides Gold One with the
ability to settle the US$ 70 million consideration payable on the completion of
its acquisition of Ezulwini from First Uranium, as described in Section 5.3
below.
Ezulwini Acquisition
Gold One announced on 2 March 2012 that it had entered into a binding letter
agreement with First Uranium to acquire 100% of the issued shares of and all
shareholders` claims against Ezulwini, held by First Uranium`s wholly owned
subsidiary First Uranium Limited (Cyprus), for a total consideration of
US$ 70 million, which equated to ZAR 539.7 million on the date the agreement was
tabled.
A binding Sale of Shares and Claims Agreement was signed on 2 April 2012, and
the conditions precedent are expected to be fulfilled or waived, as the case may
be, on or before 29 June 2012.
As is mentioned in Section 5.2. above, the US$ 70 million payable by Gold One
upon the completion of the acquisition will be provided through the Investec
financing agreement.
Ezulwini is located in close proximity to the company`s Cooke Operations and
possesses a uranium plant that is already in production, which will allow for
the immediate production of uranium from underground ore mined at Cooke. In
addition, Ezulwini offers an alternative gold plant for the processing of Cooke
underground ore. While the sharing of services between Ezulwini and the Cooke
Operations will facilitate a reduction in operating costs, Gold One will also
benefit from the addition of Ezulwini`s declared gold and uranium resources as
well as the asset`s further resource exploration potential.
Further details regarding the material terms and conditions and the transaction
rationale for the transaction can be found in the Gold One media released titled
`Gold One to Acquire 100% of Ezulwini Mine from First Uranium`, published on 2
March 2012, and the release titled `Gold One Signs Definitive Agreement for
Acquisition of Ezulwini Mine, published on 2 April 2012. These announcements are
available on the ASX MAP, the JSE SENS and the Gold One website.
5.4. Reconstitution of the Gold One Board and Appointment of Executives
Following the closure of the Jintu transaction on 29 December 2011, which saw
the introduction of BCX Gold Investment Holdings Limited ("BCX Gold") as the
company`s new 89.17% strategic majority shareholder, the Gold One Board was
reconstituted during the quarter under review to include six non-executive
directors appointed by BCX Gold of which three are independent. The new board
consists of 11 members in total in a transition arrangement and should have been
effective from the Jintu transaction`s date of initial subscription, which was
30 December 2011. It was agreed, however, that the new directors would take up
office on 1 March 2012 in order to allow for the previous board to sign off on
the annual financial statements for the period ended 30 December 2011.
On 29 February 2012, directors Kenneth Dicks, William Harris and Sandile Swana
resigned. The Gold One Board now comprises Yalei Sun as Chairman, Neal Froneman
as CEO, Chris Chadwick as CFO, Mark Wheatley as Lead Independent Non-Executive
Director, Kenneth Winters as Independent Non-Executive Director, Barry Davison
as Independent Non-Executive Director, Michael Solomon as Independent Non-
Executive Director, Hui Liu as Independent Non-Executive Director, Tze Leung
Chan as Independent Non-Executive Director, Ming Liao as Non-Executive Director,
and Chao Zhou also as Non-Executive Director.
As announced on 26 April 2012, operational capacity has been further enhanced
with the appointment of Wayne Robinson as Head of the Gold One Group`s South
African Operations. Wayne will provide mining expertise, leadership and
guidance to the group`s operations. Wayne has 25 years of experience in mining
and was most recently Managing Director for Eastern Platinum, where he was
responsible for all of Eastern Platinum`s South African operations and projects.
In the December 2011 Quarterly Report, Gold One announced that it had planned to
initiate a listing on the Hong Kong Stock Exchange within the next nine to 18
months and had already begun establishing an office in Hong Kong. To further
support the company`s growth within in the Asian region, during the quarter
under review Gold One welcomed the appointment of Michael Li as Senior Vice
President: Asia for the Gold One group.
Michael was previously the Managing Director of the Rothschilds Group`s Hong
Kong office and is a seasoned professional with more than 20 years` experience
in accounting as well as in commercial and investment banking. Michael has led
numerous fund raising exercises in Hong Kong and the United States including
initial public offerings, reverse takeovers and private placement, as well as
domestic and cross-border merger and acquisition transactions for Chinese
companies. Michael is a certified public accountant in the State of California
and is well versed in both the Asian and international markets.
Outlook
6.1. Group Production Guidance
Total group gold production for the June 2012 quarter is forecast at 69,000
ounces. The production outlook for the Modder East Operations` June quarter is
34,000 ounces, reflecting a 9% increase on the March 2012 quarter.
The production outlook for the Cooke Underground Operations` June 2012 quarter
is 27,000 ounces, reflecting a 16.5% increase on the March 2012 quarter. The
turnaround initiatives are expected to further contribute to this improvement in
production for the upcoming quarter with specific focus being placed on the
improvement of the mine call factor and quality mining practices.
For the Randfontein Surface Operations, the production outlook for the June 2012
quarter is 8,000 ounces, representing an increase of 9% compared to the March
2012 quarter. With the reclamation difficulties experienced during the March
2012 quarter now under control, targeted tonnages volumes for the June 2012
quarter are expected to be achieved.
6.2. Group Development Outlook
During the June 2012 quarter, the company will continue to work closely with
First Uranium to timeously complete the outstanding conditions precedent
relating to the Ezulwini transaction. The companies are currently targeting
fulfilling the outstanding conditions by the end of the June 2012 quarter.
Capital Structure
As of the release of this report, the company has 1,416,315,461 shares on issue,
of which 1,363,844,748 (96%) are held on the Australian register and 52,470,713
(4%) are held on the South African register. The company has 39,674,237 listed
and unlisted options in issue.
For the release with pictures and schematics of ASX and JSE March 2012 Quarter
Trading Statistics please refer to the Company`s website hosted at
www.gold1.co.za.
Johannesburg
30 April 2012-04-29
JSE Sponsor
Macquarie First South Capital (Pty) Limited
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
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 International Limited is a dual listed (ASX/JSE: GDO) 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 kilometers 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 1,416,315,461 shares.
Office Details
Sydney Head OfficeLevel 3, 100 Mount Street,
North Sydney, NSW 2060
AustraliaPO Box 1244 North Sydney NSW 2059Telephone: +61 2 9963 6400Fax: +61 2
9963 6499
Johannesburg Corporate OfficeConstantia Office Park, Bridgeview House, Ground
FloorCorner 14th Avenue and Hendrik Potgieter Street Weltevreden Park, 1709,
Gauteng, South AfricaTelephone: +27 11 726 1047Fax: +27 11 726 1087
Issued Capital
1,416,315,461 shares on issue
Options (listed and unlisted: 39,674,237)
ADR ratio: 1 ADR = 10 ordinary shares
Stock Exchange Listings
ASX/JSE Limited: GDO
OTCQX International: GLDZY
Directors
N Froneman (CEO)
C Chadwick (CFO)
Y Sun (Chairman)
M Wheatley (Lead Independent Non-Executive Director)
K Winters (Independent Non-Executive Director)
B Davison (Independent Non-Executive Director)
M Solomon (Independent Non-Executive Director)
H Liu (Independent Non-Executive Director)
T L Chan (Independent Non-Executive Director)
M Liao (Non-Executive Director)
C Zhou (Non-Executive Director)
Company Secretaries
B Snell (Australia)
P B Kruger (South Africa)
Registrars
Boardroom Limited
Level 7
207 Kent Street
Sydney
NSW
Australia
2000
Tel: +61 2 9290 9600
South African Transfer Secretaries
Computershare Investor Services
70 Marshall Street
Johannesburg
2001
Level 1 ADR Sponsor
The Bank of New York Mellon
Depositary Receipts Division
101 Barclay St, 22nd Floor
New York, New York 10286
USA
Tel: +1 212 815 3700
Fax: +1 212 571 3050
Auditors
PricewaterhouseCoopers Incorporated
201 Sussex StreetSydney, NSW 1171Australia
Telephone: +61 2 8266 0000
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 Persons` Statement
The information in this release that relates to exploration results, mineral
resources or ore reserves is based on information compiled by the following
Competent Persons 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 overall Competent Person for the Gold One group is 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 is Senior Vice President:
Business Development for Gold One, with which he is a full-time employee, and
has 12 years` experience 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 JORC Code and the
SAMREC Code.
The Competent Person for the Ventersburg Project is Mr Quartus Meyer, who has a
master`s degree in science (geology) and who is a professional natural scientist
registered with SACNASP, membership number 400063/88. Mr Meyer is Group
Exploration Manager for Gold One, with which he is a full-time employee, and has
25 years` experience 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 JORC Code and the SAMREC Code.
The Competent Person for the Modder East Operations is Mr Evan Cook, who has a
bachelor`s degree in technology (geology) and who is a professional natural
scientist registered with SACNASP, membership number 400162/07. Mr Cook is the
Mineral Resources Manager: Modder East Operations for Gold One, with which he is
a full-time employee, and has 13 years` experience 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 JORC Code and the SAMREC Code.
The Competent Person for the Cooke Operations is Mr Dave Whittaker, who has an
honour`s degree in science (geology geography) and who is a professional natural
scientist registered with SACNASP, membership number 400053/00. Mr Whittaker is
Mineral Resources Manager: Cooke Underground Operations for Rand Uranium (Pty)
Limited, with which he is a full-time employee and which is wholly owned by Gold
One, and has 30 years` experience 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 JORC
Code and the SAMREC Code.
Dr Stewart and Messrs Meyer, Cook and Whittaker consent to the inclusion in this
release of the matters based on information compiled by themselves, Gold One
employees, Rand Uranium employees and the companies` consultants in the form and
context in which they appear for the purposes of both the JORC Code and the
SAMREC Code
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 in the Gold One 2011 Annual Report,
released on 29 February 2012 on the ASX MAP, JSE SENS and the Gold One website.
The company`s resource statements are also available on the Gold One website.
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: 30/04/2012 08:10:00 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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