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2012 Annual Financial Results
GOLD ONE INTERNATIONAL LIMITED
Gold One International Limited
Registered in Western Australia under the Corporations Act, 2001 (Cth)
Registration number ACN: 094 265 746
Registered as an external company in the Republic of South Africa
Registration number: 2009/000032/10
Share code on the ASX/JSE: GDO
OTCQX International: GLDZY
ISIN: AU000000GDO5
("Gold One" or the “Company”)
Media Release
2012 Annual Financial Results
2012 annual report highlights include:
- Annual gold production up 96% to 241,755 ounces
- Annual gold revenue of US$ 353.79 million (A$ 381.63 million)
- Gross margin of 12.1%
- Exploration and capital expenditure of US$ 78.85 million (A$ 76.15 million)
- Operating profit of US$ 59.99 million (A$ 57.93 million)
- Profit before taxation of US$ 47.92 million (A$ 46.28 million)
- Profit for the year of US$ 31.22 million (A$ 30.15 million)
- Cash cost position of US$ 1,192/oz1
- Cash utilised from operations of US$ 7.98 million (A$ 7.71 million)
- Reconstitution of the Gold One Board
- Completion of the acquisitions of Rand Uranium and Ezulwini for US$ 250 million and US$ 70 million
respectively
- Gold Fields and Gold One West Rand Tailings Joint Venture pre-feasibility study initiated
- Christopher Chadwick appointed as acting CEO
JOHANNESBURG – 28 February 2013. Gold One International Limited (ASX and JSE: GDO) is pleased to
report on its annual financial statements for the year ended 31 December 2012. The year was one of
significant transformation for Gold One and its subsidiaries and was characterised by strategic transactions.
Following the conclusion of the Jintu Transaction and the introduction of the Consortium as Gold One’s new
majority shareholder, Gold One acquired a controlling interest in Goliath Gold Mining Limited and concluded
the strategic acquisitions of Rand Uranium (Pty) Limited (“Rand Uranium”) and Ezulwini Mining Company
(Pty) Limited (“Ezulwini”) during the first half of 2012. These strategic acquisitions enabled the company to
not only bolster its gold production profile but also pursue a uranium co-product strategy by exploiting the
uranium potential that exists across the Cooke Underground Complex (Cooke 1, 2, 3 and Ezulwini). The
Randfontein Surface Operation, created through Gold One’s splitting of Rand Uranium’s underground and
surface assets into two distinct business units, has also allowed Gold One to begin consolidating surface
retreatment opportunities within Johannesburg’s West Rand. This opportunity is being further explored via a
joint venture with Gold Fields Limited (“Gold Fields”), and will now be investigated with Sibanye Gold
Limited (“Sibanye Gold”).
The 2012 year was not without difficulties. Gold One experienced illegal industrial action at the Modder East
Operation during June as well as at Ezulwini (Cooke 4) during October, resulting in the suspension of the
Cooke 4 Operation. Despite these difficulties and the two year turnaround initiatives employed at the Cooke
Underground Operation, Gold One is pleased to report a net profit before taxation of US$ 47.92 million (A$
46.28 million) for 2012, compared to the company’s 2011 net profit before taxation of US$ 70.96 million (A$
68.70 million). For the year under review Modder East produced 97,958 ounces, the Cooke 1-3 Underground
Operation produced 98,451 ounces, the Cooke 4 Underground Operation produced 8,493 ounces and the
Randfontein Surface Operation produced 36,853 ounces, amounting to Gold One’s total annual production
of 241,755 ounces. This reflects a 96% increase in production when compared to 2011’s total gold
production of 123,179 ounces.
The average 2012 cash cost amounted to US$ 1,192/oz1 and the average 2012 total cost was US$ 1,388/oz2.
This was significantly up from the 2011 cash cost of US$ 491/oz and 2011 total cash cost of US$ 719/oz as a
result of the acquisition and integration of the Cooke 1-3 Underground, Randfontein Surface and Cooke 4
Operations prior to the implementation of any uranium co-product strategy and the conclusion of the
anticipated two year turnaround strategy.
For both the Rand Uranium and Ezulwini acquisitions bargain purchases arose as a result of the distressed
sales of the assets. Management performed a reassessment of the Rand Uranium acquisition and is satisfied
that all of the acquired assets and assumed liabilities have been correctly identified. As a result, a gain from
bargain purchase amounting to US$ 105.72 million (A$ 102.09 million) was recognised. Management is in
the process of finalising the fair value of the identifiable assets and liabilities for the Ezulwini acquisition and,
as a result, a provisional gain from the bargain purchase amounting to US$ 5.29 million (A$ 5.114 million)
has been recognised.
During the year the Gold One Group entered into a number of share option arrangements with black
economic empowerment ("BEE") partners in order to meet the South African Mining Charter requirements
of 26% black ownership by 2014. These share option arrangements will settle in the equity interest of the
group's mining operations. Accordingly, a BEE share based payment charge was recognised amounting to
US$ 29.718 million (A$ 28.69 million).
Operating profit before finance costs for 2012 amounted to US$ 59.99 million (AS$ 57.93 million) with a
profit for the year of US$ 31.22 million (AS$ 30.15 million) from gold revenue of US$ 353.79 million (A$
381.63 million). This compares to the operating profit before finance costs for 2011 of US$ 73.02 million
(AS$ 70.69 million) and a 2011 profit of US$ 51.53 million (AS$ 49.89 million) from gold revenue of US$
194.45 million (A$ 188.26 million).
Cash utilised from Gold One’s operations in 2012 decreased to US$ (7.98) million (A$ (7.71) million)
compared to the previous year’s US$ 110.84 million (A$ 107.31 million), while group free cash flow for 2012
decreased to US$ (68.10) million (A$ (65.77) million)3 compared to 2011’s annual group free cash flow of
US$ 74.84 million (A$ 72.45 million).
Gold One’s cash balance of US$ 38.38 million (A$ 37.01 million) at the end of 2012 was substantially lower
than the previous year’s US$ 213.13 million (A$ 209.49 million) largely due to: the settlement of the Rand
Uranium and the Ezulwini acquisitions for US$ 250 million and US$ 70 million respectively; the lower cash
flows generated from the Modder East Operation; the funding of the Cooke Underground development and
turnaround strategy; the funding of the Cooke 4 Operation following a two month long suspension;
retrenchment costs paid out at the Cooke Underground Operation; and interest and capital repayments
made on the Gold One Group’s loans.
At year-end Gold One reflected debt of US$ 226.34 million (A$ 218.24 million) (principal amount of US$
221.21 million (A$ 213.30 million) and interest of US$ 5.13 million (A$ 4.94 million)) made up of shareholder
loans received during the year to provide Gold One with additional project and working capital amounting to
US$ 124.88 million (A$ 120.41 million), and an Investec facility amounting to US$ 101.46 million (A$ 97.83
million). Interest payments to date on the Investec facility and shareholder loans have amounted to US$
5.21 million (A$ 5.03 million) and US$ 3.81 million (A$ 3.68 million) respectively.
On 29 November 2012 Gold One announced the resignation of CEO Neal Froneman and the appointment of
Gold One CFO Christopher Chadwick as acting CEO and CFO. Neal, who was instrumental in the creation of
Gold One in 2009, has been appointed as CEO of Sibanye Gold, which holds the South African assets
(excluding South Deep) previously belonging to 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 the Consortium.
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.
Gold One CFO and Acting CEO Christopher Chadwick comments: “I am proud of the significant growth that
Gold One underwent during the 2012 year despite operational difficulties and the disruptions caused by the
June and October illegal strikes. The strong platform and management team that Neal has created will 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. 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.
3. Group free cash flow refers to cash available from group operations before interest charges and taxation.
ENDS
Johannesburg
28 February 2013
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) having produced 97,958 ounces in 2012.
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 (renamed Cooke 4) is contiguous to the company’s Cooke Underground and
Randfontein Surface operations. Access to the uranium production facility allows for near term production of uranium from
underground ore mined at Cooke. In addition, the sharing of services between Cooke 4 and Cooke 1-3 facilitates a reduction in
operating costs.
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: 28/02/2013 08:50:00 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
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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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