| Thu 20 Nov 2008, 9:06 | | AFO - Aflease - Aflease Gold/BMA Gold Deal Creates New International Gold |
|
AFO
AFO
AFO - Aflease - Aflease Gold/BMA Gold Deal Creates New International Gold
Company
Aflease Gold Limited
(Incorporated in the Republic of South Africa)
(Registration number 1984/006179/06)
JSE Share code: AFO
ISIN: ZAE0000758867
International Prime QX (OTCQX): AFSGY
("Aflease")
BMA Gold Limited
(Incorporated in Australia)
(ACN: 094 265 746)
ASX Share code: BMO
ISIN: AU000000BMO7
("BMA")
AFLEASE GOLD/BMA GOLD DEAL CREATES NEW INTERNATIONAL GOLD COMPANY
Johannesburg/Sydney, 20 November 2008 - The combination of South Africa`s
Aflease Gold and Australia`s BMA Gold will create an attractive international
gold business with a new mine on the brink of production and a portfolio of
growth prospects, the two companies said today. The proposed transaction, which
is supported by the boards of both companies, is subject to various conditions
including shareholder and regulatory approvals.
The new company, to be known as Gold One International (ASX/JSE trading symbol
GDO), will be listed on the Australian (ASX) and Johannesburg (JSE) stock
exchanges. Its assets will include Aflease Gold`s new Modder East mine on the
Witwatersrand near Johannesburg, which is on track to pour its first gold
towards the end of 2009, a gold resource of more than 15 million ounces and a
number of gold exploration and development projects in Queensland, South Africa,
Namibia and Mozambique.
The proposed transaction will involve the inward listing of BMA on the JSE and
the subsequent acquisition by BMA of all the issued ordinary shares in Aflease
Gold by way of a scheme of arrangement. BMA will complete a 20:1 share
consolidation and Aflease Gold shareholders will then receive one BMA ordinary
share for each Aflease Gold ordinary share and will consequently hold 95.6% of
Gold One. Thereafter, the enlarged BMA will be renamed Gold One International.
Aflease Gold chief executive Neal Froneman will become Gold One`s chief
executive and BMA Gold chief executive Mark Wheatley will be the new company`s
non-executive chairman. The completion of the scheme is expected in February
2009.
The South African Reserve Bank has indicated that it is agreeable to BMA`s
inward listing on the JSE, its subsequent acquisition of Aflease Gold and the
subsequent delisting of Aflease Gold from the JSE.
Froneman said in Johannesburg today the enlarged company`s primary focus was to
complete the Modder East project. Its longer term strategic vision would be to
grow into a geographically diversified mid-tier gold producer with an annual
production of 500 000 ounces and a premium market rating. Aflease Gold
currently has cash resources of R331 (A$50) million which will be used to
develop Modder East and progress its exploration assets. In addition Gold One
will be looking to raise R120 (A$18) million before June 2009.
"Our priorities will be to complete the development of the shallow, high-margin
Modder East mine on schedule, to advance our other low-risk, near-surface
assets, and to generate a cash flow capable of sustaining growth through organic
expansion as well as value-accretive acquisitions," he said.
Speaking in Sydney, Wheatley said given the current difficult environment, a
broadened investor base and direct access to the Australian and South African
capital markets would provide a number of funding options for the growth-
orientated Gold One.
"There are few near-term gold development companies with such an attractive
growth profile anywhere in the world and this, along with Gold One`s substantial
resource base and strong, highly experienced management team, should attract
significant interest from institutional and other investors, particularly on the
ASX," Wheatley said.
He noted that the structure of the transaction provided BMA shareholders with a
premium with minimal dilution for Aflease Gold shareholders.
(Full details of the transaction, and the resources and reserves estimates
described in this news release, are provided in the statutory announcement that
follows and will also be available on the companies` websites)
ENQUIRIES:
Aflease Gold Limited
Chief Executive - Neal Froneman +27 83 628 0226
BMA Gold Limited
Chief Executive - Mark Wheatley +61 2 9963 6400
Aflease Gold Investor & Media Relations
Helen McKane +27 82 330 2034 Email: afleasegold@dpapr.com
Website: www.afleasegold.com
BACKGROUND INFORMATION
Aflease Gold
Aflease Gold is a South African gold development company listed on the JSE
(share code AFO). It is developing the new Modder East mine on the East Rand,
some 30 kilometres from Johannesburg, and also owns the nearby existing Sub-
Nigel mine, currently being brought back into production. Its other projects
and targets include Ventersburg, a large project with inferred resources, and
Bothaville, both in the Free State Goldfields, the Tulo concession in Mozambique
and the Etendeka greenfields project in Namibia. It has a resource base of some
15 million ounces of gold.
Modder East mine
Modder East is the first new gold mine to be developed in the East Rand Basin of
South Africa`s Witwatersrand for almost 30 years. It has a probable reserve of
1.36 million ounces and an estimated life of mine of eight years. Production is
due to start towards the end of 2009 and will peak at 180 000 ounces per year
for three years. The Sub-Nigel mine will utilise the Modder East plant and will
also be used to train mine workers for Modder East with costs being offset by
production that will build up to 6 000 ounces per annum.
BMA Gold
BMA is an Australian gold exploration and development company listed on the ASX
(share code BMO). It has the licence over the Twin Hills tenements within the
Drummond Basin of Central Queensland. It has recently restated its resources at
a 3g/t cut off to give 195 000 ounces of gold at 7.3g/t Au including 70 000
ounces of inferred material at 7.8g/t Au and its exploration is focused on
increasing this to a level sufficient to support a mining operation.
Competent Person
The references to gold resources or reserves in this news release have been
prepared in accordance with both the Australasian Code of Reporting of
Exploration Results, Mineral Resources and Ore Reserves (the "JORC Code") and
the South African Code for the Reporting of Mineral Resources and Ore Reserves
(the "SAMREC Code").
Such statements in this news release relating to Modder East Mine and Sub Nigel
1, 2, and 3 are based on information compiled by Mark Wanless PrSciNat,
BSc(Hons), who was a principal geologist of SRK Consulting ("SRK"), and has
sufficient experience relevant to the style of mineralisation and type of
deposits under consideration and to the activity he is undertaking to qualify as
a Competent Person as defined by both the JORC Code and the SAMREC Code. In
respect of the the 5.26 million ounces contained in SubNigel 6, statements in
this news release are based on information compiled by Charles Muller PrSciNat,
BSc(Hons), who is a director of Minxcon (Pty) Limited, and has sufficient
experience relevant to the style of mineralisation and type of deposits under
consideration and to the activity he is undertaking to qualify as a Competent
Person as defined by both the JORC Code and the SAMREC Code.
FORWARD-LOOKING STATEMENT: This news 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 Aflease Gold and
BMA Gold are forward-looking statements (or forward-looking information) that
involve various risks and uncertainties. There can be no assurance that such
statements will prove to be accurate and actual results and future events could
differ materially from those anticipated in such statements. Important factors
could cause actual results to differ materially from Aflease Gold and BMA Gold`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 new deposits, availability of capital required
to place Aflease Gold and BMA Gold`s properties into production, 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, Aflease Gold and BMA
Gold`s hedging practices, currency fluctuations, title disputes or claims
limitations on insurance coverage, Although Aflease Gold and BMA Gold have
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.
There can be no assurance that such statements will prove to be accurate as
actual results and future events could differ materially from those anticipated
in such statements. Accordingly, readers should not place undue reliance on
forward-looking statements. Aflease Gold and BMA Gold do not undertake to update
any forward-looking statements that are included herein, except in accordance
with applicable securities laws.
In addition, this news release uses the terms "indicated resources" and
"inferred resources" as defined in accordance with the SAMREC Code (South
African Code for Reporting of Mineral Resources and Mineral Reserves prepared by
the South African Mineral Resource Committee) (SAMREC) under the auspices of the
South African Institute of Mining and Metallurgy effective March 2000 or as
amended from time to time.
A mineral reserve 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 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 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 fossilized 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 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. 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 the corporation 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: 20/11/2008 09:06:39 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.
