Wrap Text
December 2012 Quarterly Results
GOLD ONE INTERNATIONAL LIMITED
("Gold One" or “the Company”)
Media Release
December 2012 Quarterly Results
- 57,584 ounces gold production; 2% below forecast
- Cooke 1-3 Underground Operation returns to operational profitability
- Cooke 4 commences production following operational suspension
- Positive cashflow from operations of US$ 3.17 million; an improvement of US$ 12.36 million from
previous quarter
- Group operating cashflow of US$ 15.53 million
- Group cash costs decrease by 6% from previous quarter to US$ 1,296/oz
- Gold Fields and Gold One West Rand Tailings Joint Venture pre-feasibility study initiated
- Chris Chadwick appointed as acting CEO
JOHANNESBURG – 31 January 2013. Gold One International Limited (ASX and JSE: GDO) is pleased to
advise that a total of 57,584 ounces of gold were produced for the quarter, 2% lower than forecast. The
Randfontein Surface Operation and the Cooke Underground Operation exceeded guidance by 7% and 8%
respectively, despite the suspension of production at Cooke 4 for the majority of the quarter. Modder East’s
production for the quarter was 14% below guidance, primarily as a result of the ongoing production build up
at the operation post the illegal industrial action that took place during June 2012.
The Gold One Group’s cash cost1 for the December 2012 quarter decreased by 6% over the quarter,
amounting to US$ 1,296/oz. The Modder East, Cooke 1-3 Underground, Cooke 4 Underground and
Randfontein Surface Operations each recorded cash costs of US$ 747/oz, US$ 1,534/oz, US$ 4,886/oz2 and
US$ 1,081/oz respectively. The group operating cashflow totalled US$ 15.53 million, with a positive cashflow
from Gold One Group’s operations totalling US$ 3.17 million – an improvement on the September 2012
quarter’s loss of US$ 9.19 million. Gold One ended the quarter under review with a cash balance of US$
85.30 million, including restricted cash of US$ 37.25 million, and excluding gold receivables amounting to
US$ 8.88 million.
Sadly the year ended with three mine related fatalities and we extend our heartfelt condolences to the
families and friends of our colleagues Ms Mbatha, Mr Myburgh and Ms Mokhele. The mine teams have re-
affirmed their commitment to Gold One’s motto that ‘nothing is so important that it cannot be done safely’.
Notwithstanding the regrettable fatalities, production normalised at Modder East and Cooke 4 following the
disruptions caused by illegal industrial action during June 2012 and October 2012 respectively. As was
reported by the company last year, a two year wage agreement for Modder East was signed with the
National Union of Mineworkers (“NUM”) on 31 October 2012. Since the signing of the two year wage
agreement labour relations at Modder East have been amicable and Management and NUM are continuing
to work closely together. Although record labour efficiencies were achieved at Modder East during
December 2012, the skill sets required for steady state production levels must be recruited timeously and
this will remain Management’s focus going forward.
While the Cooke Underground Operation had a challenging finish to the year, the restructuring process at
Cooke 1-3 was completed during the December 2012 quarter and reduced the labour complement by
approximately 750 people. This restructuring will facilitate the continued operational turnaround strategy
and has already brought about the Cooke 1-3 Operations’ return to profitability during the December
month. Despite the disruptions caused by the restructuring process and safety stoppages, the operation
exceeded production guidance for the quarter with the recovered grade improving by 15% from 3.16 grams
per tonne to 3.64 grams per tonne.
At Cooke 4 a memorandum of understanding was entered into with both NUM and the Congress of South
African Trade Unions on 12 November 2012, which saw the lifting of Cooke 4’s operational suspension and a
restructuring of the Cooke 4 Operation. The restructuring resulted in a labour complement reduction of
approximately 650 people, which together with the restructuring at Cooke 1-3, has facilitated an appropriate
cost structure for all four shafts. The continued integration of Cooke 4 into the Cooke Underground complex
will further enhance the operation’s efficiency as well as allow for the uranium co-product strategy to be
actively progressed.
The Randfontein Surface Operation has continued to deliver a strong performance with annual production
amounting to 36,853 ounces – 2,853 ounces above the guidance estimate for the year – despite the initial
challenges faced during the March 2012 quarter. The Randfontein Surface Operation’s focus is now on the
Cooke Gold Plant Optimisation Project, which will see the Cooke Gold Plant increase throughput capacity
from 300,000 tonnes per month to 400,000 tonnes per month. The expansion is on track for completion
during the December 2013 quarter.
On 29 November 2012 Gold One announced the resignation of CEO Neal Froneman and the appointment of
Gold One CFO Chris Chadwick, as acting CEO. Chris will also continue in his role as CFO. Neal, who was
instrumental in the creation of Gold One in 2009, has been appointed as CEO of Sibanye Gold Limited
(“Sibanye Gold”), which will hold the South African assets (excluding South Deep) previously belonging to
Gold Fields Limited (“Gold Fields”).
The reconstitution of the Gold One Board was announced on 30 December 2012 following the expiry of the
one year transition period prescribed in the transaction implementation agreement with BCX Gold
Investment Holdings Limited (Gold One’s majority shareholder’s special purpose vehicle). The Gold One
Board has been streamlined to include seven directors, four of whom will be independent, and will continue
to be chaired by Yalei Sun.
Despite the challenges of 2012 the operations ended the year positively and are positioned to continue
improving performance throughout 2013. At Modder East focus will remain on further recruiting employees
to build up to steady state production levels, while at the Cooke Underground Operation focus will remain
on the integration of Cooke 4, the turnaround of the integrated complex, and the implementation of the
uranium co-product strategy. The Randfontein Surface Operation, having demonstrated an ability to
maintain strong production levels, is embarking on an exciting growth plan through the Cooke Gold Plant
Optimisation Project.
Group production for the March 2013 quarter is forecast at 63,500 ounces, comprising 25,000 ounces from
Modder East, 30,000 ounces from the Cooke 1-4 Underground Operations, and 8,500 ounces from the
Randfontein Surface Operations. Group production for the 2013 year is forecast at 300,000 ounces,
comprising 135,000 ounces from Modder East, 130,000 ounces from the Cooke 1-4 Underground Operation,
and 35,000 ounces from the Randfontein Surface Operation.
In addition the company will be focusing on progressing its extensive internal project pipeline as well as the
proposed Gold Fields and Gold One Joint Venture investigating the potential to exploit the low risk and high
margin characteristics of the surface tailings assets across the West Rand. Albeit that the Gold Fields assets
are not yet officially part of Sibanye Gold’s asset portfolio, Gold One is already engaged in talks with key
Sibanye Gold representatives to progress the surface retreatment study.
Gold One CFO and Acting CEO Chris Chadwick comments: “I would like to wish Neal well in his future
endeavors and also thank Neal for his contribution to Gold One, especially his entrenchment of a company
culture that is founded on delivery, empowerment and entrepreneurship. The strong platform and
management team that Neal has created will continue to stand Gold One in good stead as we continue to
focus on optimising our current operational performance in a safe and responsible manner and delivering on
our internal project growth. I have every confidence that Gold One is well positioned to deliver a strong
performance in 2013.”
1
Cash cost refers to all costs directly associated with mining activities, mine administration, processing and refining.
2
Cash costs include the costs associated with Cooke 4 during the period of suspension and during which no production took place.
ENDS
Johannesburg
31 January 2013
JSE Sponsor
Macquarie First South Capital (Pty) Limited
Issued by Gold One International Limited
www.gold1.co.za
Grant Stuart VP Investor Relations +27 11 726 1047 (office) +27 82 602 5992 (mobile) grant.stuart@gold1.co.za
Carol Smith Investor Relations +27 11 726 1047 (office) +27 82 338 2228 (mobile) carol.smith@gold1.co.za
Derek Besier Farrington National Sydney +61 2 9332 4448 (office) +61 421 768 224 (mobile) derek.besier@farrington.com.au
About Gold One
Gold One is a dual listed (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 the Cooke 1, 2 and 3 Underground Operations and the
Cooke surface assets (Randfontein Surface Operations) located in the West Rand, 30 kilometres from Johannesburg. The Cooke
Underground Operations continue to deliver in line with expectations and are currently the subject of a turnaround intervention.
Through Gold One’s purchase of Rand Uranium (Pty) Limited, the group has also acquired one of the world’s most advanced uranium
projects, which envisages recovering uranium, gold and sulphur from the Cooke Tailings Dam and underground ores.
During mid-2012 Gold One also completed its transaction with First Uranium Corporation and acquired 100% of the Ezulwini Mining
Company (Pty) Limited, giving the company access to gold and uranium processing plants with nameplate capacities of 200,000 and
100,000 tonnes per month respectively. Ezulwini is contiguous to the company’s Cooke Underground and Randfontein Surface
operations. Access to the uranium production facility will allow for near term production of uranium from underground ore mined at
Cooke. In addition, the sharing of services between Ezulwini and the Cooke Underground Operations will facilitate a reduction in
operating costs. An integrated plan has been developed which will see Ezulwini being incorporated into the greater Cooke
Underground Operations as Cooke 4 Shaft.
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 1,416,538,989 shares.
This news release does not constitute investment advice. Neither this news release nor the information contained in it constitutes an
offer, invitation, solicitation or recommendation in relation to the purchase or sale of securities in any jurisdiction.
Forward-Looking Statement
This release includes certain forward-looking statements and forward-looking information. All statements other than statements of
historical fact included in this release including, without limitation, statements regarding future plans and objectives of Gold One
International Limited are forward-looking statements (or forward-looking information) that involve various risks, assumptions and
uncertainties. There can be no assurance that such statements will prove to be accurate and actual values, results and future events
could differ materially from those anticipated in such statements. Important factors could cause actual results to differ materially
from Gold One’s expectations. Such factors include, among others: the actual results of exploration activities; actual results of
reclamation activities; the estimation or realisation of mineral reserves and resources; the timing and amount of estimated future
production; costs of production; capital expenditures; costs and timing of the development of Modder East and new deposits;
availability of capital required to place Gold One’s properties into production; the ability to obtain or maintain a listing in South
Africa, Australia, Europe or North America; conclusions of economic evaluations; changes in project parameters as plans continue to
be refined; future prices of gold and other commodities; possible variations in ore grade or recovery rates; failure of plant,
equipment or processes to operate as anticipated; accidents; labour disputes and other risks of the mining industry; delays in
obtaining governmental approvals, permits or financing or in the completion of development or construction activities, economic
and financial market conditions; political risks; Gold One’s hedging practices; currency fluctuations; title disputes or claims
limitations on insurance coverage. Although Gold One has attempted to identify important factors that could cause actual results to
differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended.
Any forward-looking statements in this release speak only at the time of issue. There can be no assurance that such statements will
prove to be accurate as actual values, results and future events could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on forward-looking statements. Gold One does not undertake to update any
forward-looking statements that are included herein, or revise any changes in events, conditions or circumstances on which any such
statement is based, except in accordance with applicable securities laws and stock exchange listing requirements.
Date: 31/01/2013 07:12:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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