| Fri 31 Jul 2009, 8:32 | | GDO - Gold One - Quarterly Activities Report - Quarter Ended 30 June 2009 |
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GDO
GDO
GDO - Gold One - Quarterly Activities Report - Quarter Ended 30 June 2009
Gold One International Limited
(Previously BMA Gold 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")
QUARTERLY ACTIVITIES REPORT - QUARTER ENDED 30 JUNE 2009
(For the release with pictures and schematics, please refer to the company`s
website hosted at www.gold1.co.za)
Highlights:
- Established Gold One, an international gold company with a dual primary
listing on ASX Limited ("ASX") and JSE Limited ("JSE")
- Modder East plant completed and commissioned on 24 June 2009, ahead of time
and under budget
- First gold pour from Modder East ore on 21 July 2009, one quarter ahead of
schedule
- Successful roadshow which will raise capital of up to A$37.5 million/ZAR244
million with Australian and International institutions
- 2nd Phase resource drilling at Ventersburg Project commences
Safety
Gold One`s safety objectives for its South African operations are by 2012 to
become comparable with Australian benchmarks of a maximum of one lost time
injury per 200`000 hours, and to exceed the South African 2013 tripartite
"Safety Targets and Milestones". For the quarter, the company has shown a lost
time injury frequency rate (LTIFR) of 1.6 LTI`s per 200`000 hours worked.
Chief Executive Officer`s review
It gives me great pleasure to provide you with Gold One`s first quarterly
activities report post the completion of the corporate transaction under which
BMA Gold Limited ("BMA") acquired all the shares in Aflease Gold Limited
("Aflease") to create Gold One. The transaction, unique in that Gold One is the
first company to hold a primary listing on both the ASX and the JSE was
extremely well supported by our shareholders and our bondholders.
Gold One`s strategy is to explore, develop and mine low technical risk, high
margin resources, in mining friendly jurisdictions, while also actively
reviewing opportunities in our preferred jurisdictions, being Australia, North
America and Southern Africa.
On 24 June 2009, Gold One announced an A$37.5 million/ZAR244 million capital
raising predominantly to institutional investors in Australia, Asia, North
America and Europe. I welcome these new shareholders to the company, and thank
them for their support of our continued development and growth.
During the quarter Gold One also announced that our flagship Modder East project
had successfully poured its first gold utilising third party low grade-stockpile
and thus commissioned the plant at this operation.
Following quarter end, on 21 July 2009, Modder East announced it had poured its
first 240 ounces of gold from Modder East`s own underground ore, one quarter
ahead of schedule. The successful commissioning bodes well for us meeting our
target of producing 20,000 ounces of gold by calendar year`s end, and we have
set a target of 140,000 ounces for calendar year 2010 and 180,000 ounces for
calendar year 2011.
2009 - Year of delivery
Become fully funded for ZAR120 million raised via innovative Yes
Modder East production share swap and private placement
Re-commission Sub Nigel Completed 27 January 2009 and first Yes
ore hoisted
Achieve an international Gold One listed on the ASX and the Yes
listing JSE on 18 May 2009
Commission metallurgical First gold was poured on 24 June 2009 Yes
plant using low grade third party surface
material
Fast-track Ventersburg and A$37.5 million/ZAR244 million Yes
strengthen balance sheet placement announced on 24 June 2009
Gold pour from Modder East First Modder East gold was poured on Yes
underground ore 21 July 2009 (1 quarter ahead of
schedule)
Increase exploration activity Three rigs underway at Ventersburg, Yes
with two further rigs to follow in
due course
Operational review
1. Modder East Gold Project
Access Development
Gold One announced on 4 June 2009 that the Buckshot Pyrite Leader Zone ("BPLZ")
reef was intersected at the expected elevation, while the first reef development
commenced as scheduled in April. The company has since continued development on
reef in both an easterly and westerly direction into the BPLZ, with a total of
300 metres development completed to date.
Sampling of the exposed reef has returned an average value of 12.5 g/t over a
width of 156 centimetres, well in excess of the conservative geological
modeling. This is consistent with the notion that grades are expected to
increase in the proximity of the shoreline. Reef development to the west has
confirmed that the interpretation of the position of the shoreline had been
conservative, and that the shoreline is situated further west than anticipated,
leading to a gain in mineable ground.
The company previously reported that cover drilling in the decline had reverted
to long hole cover. Subsequently, no further full face covers were drilled,
which significantly enhanced development rates in the decline. It is therefore
pleasing to report that cover drilling operations in the Decline West, have
recently reverted to long hole cover, following the safe developing through the
gold bearing erosion channel previously reported. The transition to the long
term philosophy of long hole cover drilling from cubbies alongside the
development ends is now fully implemented.
The trackless decline has now advanced a total of just more than 2,100 metres
since the start of the project and development of the first footwall crosscut
started at the end of May 2009. With the footwall crosscut now established, and
a new ventilation holing with the return airway having been created, the decline
will continue to be developed in excellent ventilation conditions, with
temperatures below 25 degrees Celsius, to intersect the station development
around the vertical shaft, from where development continues to access the
Kimberly Reef elevation some 500 metres vertically below surface.
The Decline West, started in June 2008 to provide contingency and flexibility
has continued to advance well, and the BPLZ footwall drive elevation was reached
safely. Development of the first BPLZ footwall crosscut has commenced. This
crosscut will provide access to the second raiseline, the first being
established from the return airway as described above.
Wide Reef Resource
The company continues to explore the possibility of mining the much wider reefs
of the blanket and channel facies, dubbed the Widereefs, by means of trackless
mining methods. The 300 metres of reef development mentioned above has also
exposed an average of 3.5 metres thick blanket facies grading at 2 g/t. As
mentioned in June 2009, the company has already tasked mining and exploration
consultants Minxcon to undertake an extensive study to confirm the feasibility
of this project.
Vertical Shaft
On Thursday, 18 June 2009, the last blast took place in the development of the
company`s 345 metre deep vertical shaft at its flagship Modder East operation.
During the previous month, Gold One completed the BPLZ footwall station at 325
metres below surface. The vertical shaft, which will primarily be used for
personnel access and ventilation, services only one station, which significantly
lowers operating cost and improves efficiency of people logistics. The equipping
of the shaft has commenced, while the permanent headgear and winder house, which
are currently being assembled on site, will be placed onto its permanent
foundations above the vertical shaft after equipping is completed in October of
this year.
Modder East Processing Plant
During the quarter, building of the Modder East processing plant was completed
for a total cost of A$ 39.47 million (ZAR250 million, US$ 31.2 million), ahead
of time and under the budget of A$ 50.5 million (ZAR320 million, US$ 39.9
million). On 24 June 2009, the first gold was poured at the plant, signaling the
successful completion of the commissioning phase.
Since April the various circuits in the plant had been undergoing hot and cold
commissioning, and treatment of relatively low grade ex-surface stockpile
material (containing approximately 1g/t of gold) commenced in early June,
leading to a successful first gold pour. Low grade ore has been used in the
commissioning process to reduce lockup from high-grade Modder East material and
to significantly reduce the risk of gold losses to tailings from high grade
material during start-up.
Subsequent to quarter end, on 21 July 2009, Gold One announced that it had
poured its first gold from underground. A total of 240 ounces of gold from
underground Modder East ore were poured, well ahead of schedule, while the newly
commissioned processing plant has also successfully treated Sub Nigel ore which
has been mined since January of this year.
2. Sub Nigel 1 Project
Prior to the formation of Gold One, Aflease announced on 18 June 2008, that its
board had approved the first phase of the re-commissioning of Sub Nigel at a
capital cost of A$4.3 million (ZAR28.9 million, US$3.4 million) after a detailed
study showed a reasonable return for a relatively small investment in
infrastructure.
The recommissioning project was officially completed on 27 January 2009, when
the first ore was hoisted. This project was completed well in time and under
budget at a total of A$3.1 million (ZAR20 million, US42.4 million).
The project utilizes the current infrastructure at Sub Nigel which is in
excellent condition and allows for access to the stoping areas from existing
development. The ore from Sub Nigel is processed through the Modder East plant
which will have excess capacity until the latter reaches full production in
2011.
Sub Nigel is set to produce 6000 ounces of gold per annum at a steady state cash
cost of ZAR135,000 per kilogram (US$578/oz, AUS$654/oz).
Up to the end of June, a total of 11 857 tonnes had been hoisted, while a new
second escape way was completed.
WHAM Initiative
Gold One introduced an innovative bonus system at all of its South African
operations. The aim of the new scheme is to reward safe and outstanding
production performances, while empowering mining teams to do their own
forecasting of output. The bonus scheme was exceptionally well received by
operating teams, and is another milestone in the Company`s WHAM program, an
initiative aimed at "Winning the Hearts And Minds" (hence the acronym "WHAM") of
the Company`s most important asset - its people, who have adopted a slogan "You
are the One in Gold One".
Exploration review
- Ventersburg Project
- One percussion and two diamond drill rigs to undertake a +7,500 metre
program
- Drilling to target significant gold resource upgrade to the existing -
Ventersburg high grade 3 million ounce gold resource
- Gold One considers Ventersburg has the potential to become the next
flagship project for Gold One
Following quarter end, Gold One outlined a comprehensive exploration program for
its Ventersburg project, which will see a drilling campaign comprising 2,780
metres of percussion drilling and 4,820 metres of diamond drilling. The 2nd
phase is in addition to the previous 24,100 metres of exploration drilling that
took place in 2007 and 2008. The Ventersburg Project currently has JORC/SAMREC
compliant indicated and inferred gold resources of +3Moz. The orebody ranging
from 465 - 850 metres in depth, is a perfect fit for Gold One`s shallow mining
business model.
The timeline for the Ventersburg project is envisaged as follows:
- Second phase drilling commenced July 2009
- Substantial addition to the resource base targeted for early 2010
- 2010 - pre-feasibility study, on-going drilling
- 2011 - feasibility study, on-going drilling
- Mid 2012 to 2014 - mine development
- Q4 2014 - Ventersburg production commences
The Company also announced that it had agreed to sell its Twin Hills project in
North Queensland to North Queensland Metals Limited (ASX: NQM) and Heemskirk
Consolidated Limited (ASX: HSK) (in proportions of 60% and 40%, respectively)
for A$1.75 million.
The asset sale is for cash, payable in four installments. Completion of the
sale is subject to certain conditions, including relevant approvals from the
Minister responsible for the administration of the Queensland Mineral Resources
Act 1989.
Financial review
Gold One (then known as BMA) successfully completed the inward listing and
acquisition of Aflease on 25th May 2009 and the consolidated statement of cash
flows reported for the current quarter reflects the cash inflows and outflows of
the combined Gold One entity. The quarter`s cash flows are dominated by the
continuing development of the Modder East project.
Exploration payments made were in line with the reduced quarterly forecasts for
exploration expenditure with the majority of the spend occurring on the
Ventersburg project in the Free State region in South Africa. The administration
costs reported for the quarter included certain transaction costs incurred on
the Gold One inward listing on the JSE and subsequent acquisition of Aflease.
There was a net outflow of funds for the quarter of A$ 25.8 million. On 24 July
2009, Gold One released a circular to shareholders containing details of the
second tranche of a capital raising that will raise up to A$37.5 million/ZAR244
million by late August 2009. The first tranche of the capital raising being
A$10.5 million/ZAR68.3 million, was received by the company in early July 2009.
Gold One ended the quarter with a closing cash balance of approximately A$13.9
million.
Capital structure
As at 30 June 2009, the company had 684,669,076 shares in issue, of which
620,148,360 (90.5%) were on the SA branch register and 64,520,716 (9.5%) on the
Australian branch register.
As of 31 July 2009, the release date of this report, the company has 718 499 316
shares in issue.
Share information:
ASX
High: A$ 0.47
Low: A$ 0.30
JSE:
High: ZAR 2.42
Low: ZAR 2.04
(Exchange rate of ZAR/A$ 6.33 and US$/AS of 1.26)
For the release with pictures and schematics, please refer to the company`s
website hosted at www.gold1.co.za
31 July 2009
Issued by Gold One International Limited
Website : www.gold1.co.za
For further information contact:
Neal Froneman Ilja Graulich Carol Smith
President and CEO VP: Corporate Affairs Investor Relations
+27 11 726 1047 (office) +27 11 726 1047 (office) +27 11 726 1047
(office)
+27 83 628 0226 (mobile) +27 83 604 0820 (mobile) +27 82 338 2228
(mobile)
neal.froneman@gold1.co.za ilja.graulich@gold1.co.za carol.smith@gold1.co.za
Note to editors:
Gold One International Limited is an Australian and African gold resource
company listed on the financial markets operated by ASX Limited (the Australian
Securities Exchange) and JSE Limited (the Johannesburg Securities Exchange)
(issuer code GDO). 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, which has recently been recommissioned. Its other projects and
targets include Ventersburg and Bothaville, both in the Free State goldfields,
the Tulo concession in Mozambique and the Etendeka greenfields project in
Namibia.
Office details Johannesburg Corporate Office
Sydney Head Office 45 Empire Road, First Floor
Level 3, 100 Mount Street North Parktown, 2193
Sydney NSW 2060 Gauteng, South Africa
PO Box 1244 North Sydney NSW 2059 Telephone: +27 11 726 1047
Telephone: +61 2 9963 6400 Fax: +27 11 726 1087
Fax: +61 2 9963 6499
Issued capital Stock Exchange Listings
718 499 316 shares in issues ASX Limited: GDO
Options (listed and unlisted: JSE Limited: GDO
51,612,353 OTCQX International: GLDZY
ADR ratio 1:10
Directors Sponsor
NJ Froneman (President and CEO) Macquarie First South Advisers
CD Chadwick (Chief Financial Officer) (Pty) Limited
MK Wheatley (non-executive Chairman) The Place, South Wing
BE Davison (non-executive Director) 1 Sandton Drive
KV Dicks (non-executive Director) Sandown, Johannesburg
W Harris (non-executive Director) Tel: +27 11 583 2000
S Swana (non-executive Director) Fax: +27 11 583 2151
KJ Winters (non-executive Director)
PB Kruger (Group Company Secretary)
Level 1 ADR sponsor Auditors
The Bank of New York Mellon PricewaterhouseCoopers
Depositary Receipts Division 201 Sussex Street
101 Barclay St, 22nd Floor Sydney, New South Wales 1171
New York, New York 10286 USA Australia
Tel: +1 212 815 3700 Tel: +61 2 8266 0000
Fax: +1 212 571 3050
Website: www.adrbny.com
South African Transfer Secretaries Registrars
Computershare Investor Services Registries Limited
70 Marshall Street Level 7
Johannesburg, 2001 207 Kent Street
Tel: +27 11 370 5000 Sydney, NSW, Australia, 2000
Tel: +61 2 9290 9600
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.
COMPETENT PERSON
The information in this report that relates to exploration results, mineral
resources or ore reserves is based on information compiled by Piet van Straaten,
B.Sc., Pr.Sci.Nat., Vice President, Geology and Exploration, Gold One, who is a
Member or Fellow of the SAIMM. Piet van Straaten is a full-time employee of Gold
One. Piet van Straaten has 25 years experience which is relevant to the style
of mineralization 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 2004 Edition of the `Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves` and the `South African Code for
Reporting of Mineral Resources and Mineral Reserves`. Piet van Straaten consents
to the inclusion in this News Release of the matters based on information
compiled by him in the form and context in which they appear.
Further information on the company`s resource statement is available in the pre-
listing statement of Gold One International Limited issued on 19 December 2008.
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 Gold One 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 realization 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, political risks, permits or financing or in the
completion of development or construction activities, economic and financial
market conditions, 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 News 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.
SAMREC and JORC TERMINOLOGY
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 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 (Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves) prepared by the Joint Ore Reserves
Committee of The Australasian Institute of Mining and Metallurgy, Australian
Institute of Geoscientists and Minerals Council of Australia (JORC). The use of
these terms in this News 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 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 drill holes 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 drill holes 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 drill holes. 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 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: 31/07/2009 08:32:25 Produced by the JSE SENS Department.
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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,
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