Wrap Text
June 2013 Quarterly Results - press release
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”)
Media Release
June 2013 Quarterly Results
June 2013 Quarter Highlights
- Record production of 68,208 ounces, reflecting a 10% increase on the March 2013 quarter and an
8% increase on the previous production record
- LTIFR of 1.12; an improvement from the March 2013 quarter LTIFR of 1.78
- Revenue of US$ 79.8 million
- Group cash operating cost of US$ 1,071/oz.
- Conclusion of the pre-feasibility study for the West Rand surface joint venture with Sibanye Gold
JOHANNESBURG – 31 July, 2013. Gold One International Limited (ASX and JSE: GDO) is pleased to advise the
market on the release of the company’s June 2013 Quarterly Report. The quarter under review was
characterised by a sharp decline in the gold price, which has placed pressure on the gold industry as a whole.
At Modder East high operating margins have ensured that the operation remains robust even in a lower gold
price environment. Operational profitability is expected to improve further as Modder East reaches steady
state production levels later this year, further reducing unit operating costs. The Cooke Underground
Operation is strongly focused on achieving its turnaround strategy and the realisation of uranium co-
production. Post the significant restructuring at the Cooke Underground Operation late last year, the
operation is better positioned for improved performance.
To further bolster production, for the past two quarters Gold One has implemented operational and
structural measures necessary to ensure that the company both operates sustainably in a lower gold price
environment and improves operational efficiency in the long term. The Cooke Underground Operation has
increased labour capacity to equip new high grade mining areas where innovative mining techniques have
enabled access to previously abandoned mining areas. While some of these measures negatively impacted
costs for the quarter under review, the benefits of their implementation are anticipated during the
remainder of the year.
The June 2013 quarter saw the Gold One Group achieve its highest ever quarterly production of 68,208
ounces, equaling a 10% increase on the previous quarter’s production and reflecting the steady build up
across the company’s operations. The production ounces for the quarter were marginally below our forecast
of 70,750 ounces.
While labour build up at Modder East has progressed slower than planned, the company is pleased to report
that the quarter under review was characterised by continual operational improvements and higher than
planned labour efficiencies following the successful sustainable recruitment of critical skills. The first output
from the secondary crushing plant has been incorporated into the production circuit and the plant is
forecast to be fully utilised towards the end of the September 2013 quarter, when it will contribute to steady
state production volumes. As such Modder East is forecasting 32,500 ounces for the September 2013
quarter; a 16% increase on the June 2013 quarter. The Modder East Operation is not expected to be affected
by the current industry-wide wage negotiations as Modder East is not a member of the Chamber of
Mines. In addition, a two year wage agreement valid until the end of 2014 is in place at the operation.
The sustained improvement at the Cooke Underground Operation during the quarter under review was also
pleasing, where productivity improvements resulted in a 7% increase in gold produced. A continued focus
on operational efficiencies saw an overall 3% improvement in the mine call factor quarter-on-quarter, a 32%
1
increase in gold kilograms from vamping operations and an 8% increase in total development. To mitigate
against the current volatile gold price environment, additional production opportunities in higher grade
areas and vamping operations have been identified at each of the Cooke Underground Operation’s four
shafts, and continued focus on maintaining mining above the paylimit has remained in place across the
operation.
The Cooke Underground Operation may be affected by the current mining sector wage negotiations by
reason of the fact that Gold One acquired the operation through the 100% acquisition of Rand Uranium (Pty)
Limited, which is a member of the Chamber of Mines. While it is Gold One’s view that negotiations can be
concluded in a mutually beneficial and peaceful manner, contingency plans have been put in place to
manage any labour disruptions that may occur.
The Randfontein Surface Operation has continued to deliver a strong performance with the June 2013
quarter’s production amounting to 8,662 ounces. This is a strong achievement considering the production
disruptions from strike action at the Harmony Gold Mining Company Limited’s Doornkop Plant during the
quarter under review, which necessitated Cooke Underground ore, normally treated under a toll
arrangement through the Doornkop Plant, being diverted and treated at the Cooke Gold Plant, displacing
surface feed material. The operation’s focus has remained on the Cooke Gold Plant Optimisation Project,
which will see the Cooke Gold Plant improve economies of scale by converting from mechanical reclamation
to hydraulic reclamation and increasing throughput capacity from 300,000 to 400,000 tonnes per month.
The project will also have a direct impact on cost reduction by reducing unit operating costs by some 40%.
The expansion and commissioning of the plant are on track for completion during the December 2013
quarter.
After the strike action experienced at Modder East last year and the resultant slower than anticipated
operational build up, the ramp up to steady state production has been negatively impacted and is now
expected during the September 2013 quarter. In light of this and a recent assessment of Gold One’s mining
grade paylimits in line with lower gold prices, the company has reviewed its annual production guidance. At
present Gold One anticipates 2013 production guidance to remain within 10% of the original estimate of
300,000 ounces, assuming that no labour disruptions occur during the ongoing gold sector wage
negotiations.
During the quarter it was with the deepest regret that the company reported the fatal injury on 23 May 2013
of Mr Hlahla Natshi, a winch driver, who died as a result of a fall of ground incident at the Cooke 3 Shaft at
the Cooke Underground Operation. The Gold One Group extends its heartfelt condolences to Mr Natshi’s
family and friends.
Safety for the group, measured according to the lost-time injury rate per 200,000 hours worked (“LTIFR”),
was 1.12 for the June 2013 quarter. This compares to the March 2013 quarter’s LTIFR of 1.78 and remains
above the group’s benchmark of 1.0. The Gold One Group’s 2013 progressive LTIFR to the end of June was
1.43. Gold One is committed to achieving injury-free operations and best practices are continually
entrenched across all operations. Thorough and sustainable safety practises remain key managerial focuses.
Gold One is continuing to progress its extensive internal project pipeline. Particularly pleasing is the progress
being made on the Cooke Pillar Project, where the mining of historical high grade pillars using a novel mining
methodology has impacted positively on operational margins at the Cooke 2 Shaft and is currently being
rolled out at Cooke 3. Also pleasing is the progress of the proposed Sibanye Gold Limited and Gold One
surface tailings material joint venture. The pre-feasibility study has been concluded and is currently being
reviewed with results expected to be publicly released during the September 2013 quarter. Gold One
remains focused on ensuring that its projects are prioritised according to those that maximise company
value and, particularly, provide short term operational flexibility during the current volatile gold price
environment.
During the quarter under review the company experienced an increase in electricity costs relating to annual
and winter tariff increases. Despite this increase, unit cash costs benefited from exchange rate movements
and remained steady at US$ 1,071/oz. Management has embarked on a drive to increase production levels
across all operations and maintain focus on cost management, thereby reduce non-value adding activities.
On 18 July the company’s strategic partner BCX Gold Investment Holdings Limited (“BCX Gold”) reaffirmed
its commitment to the future of Gold One by increasing its holding in Gold One’s issued share capital from
88.77% to 90.03%. In terms of Chapter 6A of the Corporations Act 2001, BCX Gold has acquired a six month
right, but not an obligation, to compulsorily acquire any remaining Gold One shares.
The company’s strategy during the upcoming quarter remains focused on consolidating the cost base across
the Gold One Group’s operations and sustaining the improved efficiencies achieved at Cooke and Modder
East.
Johannesburg
31 July 2013
Sponsor
Macquarie First South Capital (Pty) Limited
ENDS
Issued by Gold One International Limited
www.gold1.co.za
Christopher Chadwick CFO and Acting CEO +27 11 726 1047 (office) +27 71 681 6450 (mobile) chris.chadwick@gold1.co.za
Grant Stuart VP Investor Relations +27 11 726 1047 (office) +27 82 602 5992 (mobile) grant.stuart@gold1.co.za
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, and is 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.)
The Modder East Operations have continued to ramp up in production and produced 97,958 ounces of gold at an average cash cost
of US$ 686/oz during 2012. This was derived from 474,754 Black Reef milled tonnes at an average recovered grade of 6.00 grams per
tonne as well as the milling of 139,887 tonnes of low grade development ore and waste with an average recovered grade of 1.43
grams per tonne. The Modder East Metallurgical Plant maintained recoveries of 95% for 2012.
At the beginning of 2012, the Gold One Group expanded with the acquisition of Rand Uranium (Pty) Limited, which comprised the
Cooke 1, 2 and 3 Underground Operations and the Cooke surface assets (now known as the Randfontein Surface Operations) located
in the West Rand, 30 kilometres from Johannesburg. Through Gold One’s purchase of Rand Uranium (Pty) Limited, the company has
also acquired one of the world’s most advanced uranium projects, which envisages recovering uranium, gold and sulphur from the
above surface Cooke Tailings Dam. The Cooke Tailings Facility has a code compliant resource of 0.8 million ounces of gold and 34
million pounds of uranium. This exciting opportunity is being further explored with Sibanye Gold Limited as part of a larger surface
retreatment strategy on the West Rand.
During mid-2012 Gold One also completed its transaction with the 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 (now known as Cooke 4) is contiguous to the company’s Cooke
Underground and Randfontein Surface operations and forms part of the Cooke Underground 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.
For the 2012 year, the Cooke 1-3 Underground Operations produced 98,451 ounces at an average cash cost of US$1,558/oz. This
production was derived from the treatment of 961,802 milled tonnes at an average recovered grade of 3.17 grams per tonne as well
as the treatment of 39,650 milled tonnes of low grade development and waste material at an average recovered grade of 0.34 grams
per tonne. Plant recoveries for the operation were 95% for 2012.
Since Gold One assumed managerial control, Cooke 4 produced gold in the months of August, September and December only due to
illegal industrial action that temporarily halted the operation during October and November. For the three months 8,493 ounces
were produced. Total production for 2012 comprised 82,951 milled tonnes at an average recovered grade of 3.18 grams per tonne.
Due to the fact that the metallurgical plant was stopped for two months during the illegal industrial action, plant recoveries averaged
82% over the reporting period.
For the 2012 year the Randfontein Surface Operations produced 36,853 ounces from 3,286,633 milled tonnes at an average cash
cost of US$1,137/oz. Recovered grades during the year averaged 0.349 grams per tonne, with a gold recovery rate of 72%.
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 1,421,538,989 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.
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 Executive Vice President:
Technical Services 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 Ventersburg resource 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 Vice President: Exploration
for Gold One, with which he is a full-time employee, and has 26 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 14 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 and Cook 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 2012 Annual Report, released on 28
February 2013 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: 31/07/2013 10:31:00 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.
Sharenet Sites 
