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GOLD ONE INTERNATIONAL LIMITED - June 2012 Quarterly Results

Release Date: 30/07/2012 09:42
Code(s): GDO     PDF:  
Wrap Text
June 2012 Quarterly Results

Gold One International Limited 
Registered in Western Australia under the Corporations Act, 2001 (Cth)
Registration number ACN: 094 265 746
Registered as an external company in the Republic of South Africa
Registration number: 2009/000032/10
Share code on the ASX/JSE: GDO 
ISIN: AU000000GDO5
OTCQX International: GLDZY
("Gold One" or the “company”) 


                                                                                             
                                     June 2012 Quarterly Results

   Cashflow from operations increased by 58%
-   Group operating cashflow of US$ 24.2 million
-   Cash balance decreased from US$ 147.61 to US$ 75.99 million primarily due to final tranche of payments
    for the Rand Uranium acquisition
-   Group cash costs decreased by 8% from US$ 1,093 per ounce to US$ 1,007 per ounce
-   62,904 ounces produced for the June 2012 quarter representing a 2% increase on the March 2012
    quarter
-   Modder East Operation production totalled 26,493 ounces representing a 22% reduction compared to
    forecast primarily due to illegal industrial action
-   Cooke Underground Operation production increased quarter-on-quarter by 12% to 26,041 ounces
-   Randfontein Surface Operation production increased quarter-on-quarter by 42% to 10,370 ounces
-   Positive progress made on the Gold Fields and Gold One West Rand tailings joint venture scoping study

Gold One is pleased to announce the company’s June 2012 quarter results, which showed the company increasing its total production by 2%
to 62,904 ounces from the March 2012 quarter’s production of 61,625 ounces. Cashflow from the
operations increased by 58% to US$ 8.74 million from March’s US$ 5.53 million following positive
contributions from the Randfontein Surface Operation, which is merely six months into its turnaround
programme, and from Modder East.

Safety for the group, measured according to the lost-time injury rate per 200,000 hours worked (“LTIFR”),
improved from 1.99 for the March 2012 quarter to 1.30 for the quarter under review. This improvement is
the result of on-going safety initiatives across all operations. Despite this improvement, however, the
company regrets to report that Mr Mungoi, a timberman assistant, lost his life underground at Cooke 1 Shaft
in July while assisting with repairs to a pipe column. The company extends its deepest condolences to Mr
Mungoi’s family, friends and colleagues.

The loss of production from Modder East as a result of the illegal industrial action and the subsequent
dismissal of a large majority of Modder East’s workforce is highly disruptive and disappointing. However, we
are pleased with the swift response of the courts to this illegal strike with a final interdict having been issued
by the South Gauteng High Court on 26 June 2012, interdicting violence and intimidation at Modder East.
The High Court has also granted costs against the Professional Transport Allied Workers Union (“PTAWU”),
under whose auspices the violence occurred.

During the initial phases of the unprotected industrial action the company introduced a number of
contingencies at Modder East to mitigate the impact of the strike. These contingencies have continued to
ensure that Modder East operates profitably, albeit at much lower production levels. Management is in on-
going discussions with organised labour with a view to reach a sustainable long term solution. A short term
plan which includes the controlled engagement of contractors, has been developed to normalise production
and management expects production to return to pre-strike rates by the end of September 2012.

As a result of the contingency measures in place and the planned progressive build up at Modder East a
review of the next six months of production objectives has been undertaken. It is envisaged that the group
will achieve a 55,000 ounce output during the September 2012 quarter and a 70,000 ounce output for the
December 2012 quarter, giving a revised group outlook of 250,000 ounces for the total 2012 year. In

                                                                                                   
addition, Ezulwini Mining Company (Pty) Limited (“Ezulwini”) will be incorporated into the Cooke
Underground Operation during the last five months of 2012 and is expected to contribute an additional
15,000 ounces during this period providing a total group gold production of 265,000 ounces, as opposed to
production forecasts of 300,000 ounces prior to the illegal industrial action and the inclusion of Ezulwini.

The group gold revenue for the June 2012 quarter amounted US$ 87.82 million from the sale of 64,434
ounces at an implied average price of US$ 1,363/oz. This comprised 31,812 ounces of gold sold into the spot
market at an implied average price of US$ 1,678/oz and 32,622 ounces delivered into the Cooke
Underground and Randfontein Surface operations’ hedge book at an implied average price of US$ 1,245/oz.

Cash cost for the quarter reduced to US$ 1,007/oz from US$ 1,093/oz, yielding an improved gross cash
margin of US$ 356/oz. Capital expenditure for the quarter was US$ 16.84 million (US$ 268/oz) of which US$
11.3 million was spent on orebody development and equipping.

The company’s cash balance remained robust with Gold One ending the quarter with a cash balance of US$
75.99 million (including restricted cash of US$ 30.12 million) compared to a cash balance of US$ 147.61
million (including restricted cash of US$ 31.74 million) at the end of the March 2011 quarter. In addition to
this the company ended the quarter under review with gold receivables amounting to US$ 6.09 million. The
decrease in cash was primarily due to the final tranche of payments being made by Gold One for the Rand
Uranium (“Pty”) Limited (“Rand Uranium”) acquisition.

At quarter-end Gold One reflected long term debt of US$ 124.61 million comprising the shareholder loan
received during the March 2012 quarter, amounting to US$ 75.46 million and US$ 49.15 million drawn from
the Investec facility, during the quarter under review. Gold One has access to US$ 161.7 million in approved
Investec undrawn facilities.

Operational highlights

At Modder East the contingency plans implemented by management during June 2012 included the
supplementing of reduced mining tonnages with tonnage from underground accumulations, low grade
surface stockpiles and additional on-reef development. A total of 110,958 tonnes of milled ore at a
recovered grade of 7.03 grams per tonne was supplemented with 51,574 tonnes of low grade ore at 0.85
grams per tonne to yield 26,493 ounces of gold. Unfortunately strong operational performances during April
and May were neutralised by the impact of the illegal industrial action in June. Operational normalisation
will be dependent on the successful integration of the new contract crews. Cash costs at Modder East
reduced from US$ 683/oz during the previous quarter to US$ 590/oz during the current quarter.

The two year turnaround programme at the Cooke Underground Operation is continuing to make good
progress as gold production increased quarter-on-quarter by 12% to 26,041 ounces, which was marginally
below the operation’s forecast of 27,000 ounces. The increased tonnage at the Cooke Underground
Operation contributed to a quarter-on-quarter reduction in South Africa Rand per tonne costs from ZAR
1,137/t to ZAR 1,125/t, and increased gold output contributed to a cash cost reduction from US$ 1,513 for
the previous quarter to US$ 1,438/oz for the current quarter.

The Randfontein Surface Operation, which is also only six months into its two year turnaround initiative,
performed well and exceeded quarterly guidance by 42%, more than making up the 674 ounce
underperformance experienced in the March 2012 quarter. During the quarter production at the
Randfontein Surface Operation benefited from an increase in sand tonnes milled from 756,390 tonnes to
786,346 tonnes, reflecting a 4% increase. In addition, higher mining grades resulted in the recovered grade
increasing from 0.3 grams per tonne to 0.41 grams per tonne; a 26% improvement. Gold recovery increased
from 69.3% to 72%. These improvements contributed to a reduction in cash costs from US$ 1,388/oz to US$
1,000/oz for the operation.

Corporate Development

During March 2012, Gold One 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
First Uranium Limited, the holding company of Ezulwini, for a total consideration of US$ 70 million. Just four
months later I am delighted to report that the acquisition of the Ezulwini mine from First Uranium is
unconditional and will be implemented in August 2012. This acquisition is aligned to our business strategy of
value-accretive growth and is a key component in the realisation of synergies across the Cooke Underground
and Randfontein Surface operations. With access to Ezulwini’s uranium processing facility, we can now look
towards unlocking the value of our joint underground resources and begin capitalising on our gold and
uranium co-product strategy in the near term.

During the quarter we also progressed the West Rand surface tailings scoping study, jointly initiated by
Gold One and Gold Fields Limited (“Gold Fields”). The study is investigating the feasibility of establishing a
joint venture into which both parties will contribute surface assets for retreatment to recover residual gold,
uranium and sulphur. The joint assets comprise in excess of 800 million tonnes of historical tailings and
current arisings and represents over 60% of the total tailings material in the West Rand and far West Rand
region. During the quarter under review, the scoping study was completed and is currently being reviewed
by the project steering committee established to represent both parties. A successful outcome of an
enhanced value proposition may lead to a decision by Gold One and Gold Fields to progress the study to a
prefeasibility/feasibility study investigation. A final decision is anticipated during the September 2012
quarter.

On 17 April 2012 Gold One announced that the company had entered into an acquisition agreement through
its wholly owned subsidiary New Kleinfontein Mining Company Limited (“NKMC”) and with Goliath Gold
Mining Limited (“Goliath Gold”) to acquire control over the underground deposits of Grootvlei (Pty) Mines
Limited, Consolidated Modderfontein Mines 1979 Limited and Nigel Gold Mining Company (Pty) Limited
(“the Pamodzi East Rand Operations”) for a total of ZAR 70 million. This strategic transaction essentially
gives Gold One and Goliath Gold 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 and 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 will provide Gold One and Goliath Gold with an opportunity
to replicate the successful development philosophy employed at the Modder East Operation. During the
September 2012 quarter the company will continue to progress the outstanding conditions precedent to the
transaction. The anticipated completion of all conditions precedent is 30 September 2012, which can be
extended by mutual agreement by both parties.

Gold One President and CEO Neal Froneman comments: “We remain focused and committed to normalising
production on Modder East. With the current execution of our carefully considered strategy we are well
placed to ensure long term stability of these operations and expect production to return to pre-strike rates
by the end of September 2012. I am looking forward to integrating Ezulwini into the Cooke Underground
Operation and with immediate access to Ezulwini’s uranium processing facility, we can now look towards
unlocking the value of our joint underground resources and begin capitalising on our gold and uranium co-
product strategy in the near term.”

ENDS
                                                    Issued by Gold One International Limited
       
Johannesburg
30 July 2012

JSE SPONSOR
Macquarie First South Capital (Pty) 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, ddistinguishes
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 the Cooke 1,2 and 3 Underground Operations and the
Cooke surface assets (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.

This news release does not constitute investment advice. Neither this news release nor the information contained in it constitutes an
offer, invitation, solicitation or recommendation in relation to the purchase or sale of securities in any jurisdiction.

Forward-Looking Statement
This release includes certain forward-looking statements and forard-looking information. All statements other than statements of
historical fact included in this release including, without limitation, statements regarding future plans and objectives of Gold One
International Limited are forward-looking statements (or forward-looking information) that involve various risks, assumptions and
uncertainties. There can be no assurance that such statements will prove to be accurate and actual values, results and future events
could differ materially from those anticipated in such statements. Important factors could cause actual results to differ materially
from Gold One’s expectations. Such factors include, among others: the actual results of exploration activities; actual results of
reclamation activities; the estimation or realisation of mineral reserves and resources; the timing and amount of estimated future
production; costs of production; capital expenditures; costs and timing of the development of Modder East and new deposits;
availability of capital required to place Gold One’s properties into production; the ability to obtain or maintain a listing in South
Africa, Australia, Europe or North America; conclusions of economic evaluations; changes in project parameters as plans continue to
be refined; future prices of gold and other commodities; possible variations in ore grade or recovery rates; failure of plant,
equipment or processes to operate as anticipated; accidents; labour disputes and other risks of the mining industry; delays in
obtaining governmental approvals, permits or financing or in the completion of development or construction activities, economic
and financial market conditions; political risks; Gold One’s hedging practices; currency fluctuations; title disputes or claims
limitations on insurance coverage. Although Gold One has attempted to identify important factors that could cause actual results to
differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended.

Any forward-looking statements in this release speak only at the time of issue. There can be no assurance that such statements will
prove to be accurate as actual values, results and future events could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on forward-looking statements. Gold One does not undertake to update any
forward-looking statements that are included herein, or revise any changes in events, conditions or circumstances on which any such
statement is based, except in accordance with applicable securities laws and stock exchange listing requirements.

Competent Persons’ Statement
The information in this release that relates to exploration results, mineral resources or ore reserves is based on information
compiled by 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: 30/07/2012 09:42:00 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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