| Mon 12 Oct 2009, 7:44 | | GDO - Gold One International - Gold One quarterly activities report - Quarter |
|
GDO
GDO
GDO - Gold One International - Gold One quarterly activities report - Quarter
ended 30 September 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")
GOLD ONE QUARTERLY ACTIVITIES REPORT - QUARTER ENDED 30 SEPTEMBER 2009
For the release with pictures and schematics, please refer to the Company`s
website: www.gold1.co.za
September Quarter Highlights:
- Excellent safety performance.
- 6,191 ounces of gold produced from Modder East, Sub Nigel and low grade
commissioning ore during the September quarter, ahead of budget.
- Modder East production of 4,807 ounces from 50,121 milled tonnes,
primarily from lower grade on-reef development, at recovered grades of
2.98g/t.
- Plant recoveries of 93% significantly exceed design and budget
parameters.
- Current development and mining is ahead of schedule and delivering grades
in excess of the budget.
- 465 metres of on reef development exposes 13.5g/t Buckshot Pyrite Leader
Zone (BPLZ) over 1.38 metre channel (1,863cmg/t) confirming geological model
and high quality of the Modder East resource.
- First five ledging panels established with stoping having commenced at
the end of the quarter.
- Ventersburg pre-feasibility study initiated and 5,276 metres of resource
drilling completed, 776 metres in excess of budget.
- A successful capital raise of A$37.5 million results in the Company being
sufficiently funded to production and to progress exploration projects.
- The management team has been strengthened with additional senior
appointments.
- Uranium One disposes of its last parcel of Gold One shares to a new long
term strategic shareholder.
December Quarter Outlook:
- Gold One on target to achieve 2009 budgeted ramp up production of 20,000
ounces of gold.
- Recovered grades will increase as volumes from higher grade stoping
displaces lower grade on reef development ore.
- Modder East to move into both commercial and continuous production.
- At operational level Modder East to become cash flow positive
1. Chief Executive Officer`s Review
It gives me great pleasure to report that Gold One has produced its first
6,191 ounces of gold during the September quarter. Gold One remains well on
track to produce its budgeted 20,000 ounces of gold for the 2009 ramp-up year.
The Modder East Project is more than 95% complete and with the production of
gold on a regular basis, the Company has moved from being a developer to a
producer. During the December quarter of 2009, Gold One looks forward to
declaring both continuous and commercial production at Modder East and the
company also anticipates moving into monthly positive cash flow at Modder
East.
In addition, the high quality of the Modder East resource has been confirmed,
with the first 465 metres of on reef development having exposed BPLZ reef with
an average grade of 13.5g/t over an average channel width of 1.38 metres.
Production ramp-up is generally the most difficult phase of a mine`s life.
Management has mitigated the risk of ramp-up failure by successfully
implementing a start-up and ramp-up de-risking strategy which to date has been
very successful.
The three primary components of the de-risking initiative are:
- Geology - Understanding the orebody, ensuring a competent and
conservative geological model and confirming these aspects with underground
development.
- Metallurgy - Ensuring the new processing plant is completed ahead of
underground mining at Modder East and commissioned on low grade third party
surface sources. This approach allowed for commissioning issues to be
resolved ahead of production and bottle necks eliminated. Plant personnel
were also trained on low grade ore, which minimised the risk of gold losses
once higher grade underground ore from Modder East was introduced into the
plant.
- Volume - The opening up of sufficient face length and the introduction of
fully trained teams from the Sub Nigel training centre who were able to
immediately start the mining process at Modder East as fully fledged and
experienced teams.
During the quarter, new senior management was appointed to focus on our
internal growth initiatives so as to unlock the full potential of our other
high quality projects, such as Ventersburg, where drilling is underway.
We continue to make good progress in the capital markets, and are now
achieving considerable interest from institutional investors in the
Australasian region. The Gold One shareholder register now reflects that 25%
of our shares are held via the Australian register, compared to less than 5%
when the Company was formed in May of this year.
2. Operational Review
2.1. Safety
For the September quarter Gold One achieved a lost time injury frequency rate
(LTIFR) of 0.32 LTI`s per 200,000 hours worked. This is an excellent safety
achievement well ahead of the South African industry average for gold mines of
6.63 LTIFR per million man hours and improves even on the Australian benchmark
of one lost time injury per 200,000 man hours. Gold One will continue to adopt
the Australian benchmark which exceeds the South African 2013 tripartite
"Safety Targets and Milestones".
2.2. Modder East
2.2.1. Development
The Modder East project continues to make excellent progress with the project
now moving from development into production. During the quarter the project
achieved a number of milestones. The underground development is ahead of
schedule and in line with the budget. The project is now 95% complete and it
is anticipated that it will soon move into commercial production.
A major milestone was the return airway (RAW) moving onto the reef horizon as
planned and to date over 465 metres of on reef development has taken place.
For the release with pictures and schematics, please refer to the Company`s
website: www.gold1.co.za
Since initial intersection of the reef, sufficient face length has been
created for this year`s production. Management is also clearly focused on
ensuring that sufficient face is created on an ongoing basis for continued
production ramp up.
To verify the geological model the initial development has been targeted at
the area around borehole DD1. Both the BPLZ facies and the underlying Blanket
facies have been exposed. The average grade of the BPLZ facies over 465
metres of development is 13.5g/t over a channel width of 1.38 metres resulting
in a content of 1,863cmg/t. The Blanket facies in the vicinity of DD1 is 2.46
metres wide with a resulting average grade of 1.5g/t over 2.46 metres
resulting in a gold content of 371cmg/t. Reference to the feasibility study
will indicate that grades used in the geological modelling and planning of the
mine have been conservative relative to current underground sampled grade. As
a result current development and mining is delivering grades in excess of the
budget. Ongoing monitoring of in-situ grades intersected in the underground
development will continue and be incorporated in future resource and reserve
updates.
For the release with pictures and schematics, please refer to the Company`s
website: www.gold1.co.za
Due to the 1.38 metres wide BPLZ and 2.4 metres wide Blanket facies, on reef
development has taken place using mechanised mining methods. Initial planning
for on reef raise development in this area was based on conventional hand held
drilling at development rates of 40 metres per month. With the use of
mechanised mining methods the raise development has taken place at
approximately 120 metres per month. This has resulted in significant volumes
of ore from both the BPLZ and Blanket facies. The combination of a large
portion of lower grade Blanket facies combined with a higher portion of high
grade BPLZ has resulted in average mined grades of approximately 4g/t, in line
with the forecasted budgets for this area.
The graph below shows the tonnages mined at Modder East up to end September,
split between those generated by trackless mechanised reef development (TMM),
conventional or hand held hydropower development and, more recently, stoping
operations (which includes tonnages from ledging operations).
For the release with pictures and schematics, please refer to the Company`s
website: www.gold1.co.za
Both the Decline and the Decline West have been advanced to the footwall
elevation with the first footwall development to support the first raise line
now in place. The Decline West is now in a position to start the 2nd line of
footwall development for raise line 2.
Underground waste development at Modder continues, and the Decline West is
only 157 metres away from intersecting the development undertaken from the
vertical shaft during the sinking phase, with the expected date of
intersections being the end of November.
2.2.2. Vertical Shaft
Sinking of the vertical shaft was completed in the previous quarter. Equipping
is over 90% complete, the temporary headgear used for sinking has been
removed, the new permanent headgear has been erected, and the Koepe winder
placed in position. The shaft will now be commissioned and should become fully
operational during November. The timing is ideal, as the completion of the
vertical shaft will coincide with the completion of the underground shaft
access development, allowing our teams faster access to their working faces
resulting in higher productivity.
For the release with pictures and schematics, please refer to the Company`s
website: www.gold1.co.za
2.2.3. Ledging and Stoping
The success of the reef development operations has allowed ledging (the phase
of mining of ore prior to stoping operations) to commence earlier than
anticipated, this in turn has allowed the stoping buildup to start slightly
ahead of schedule. There is also clear evidence of the success of the training
initiatives developed and taught at Sub Nigel with the teams at Modder East
quickly able to achieve their targeted output. At the end of September, the
mine`s staffing complement totalled 585, including 50 in the the metallurgical
plant, 280 on development and 250 involved in stoping.
The first hydropower pumpstation at Modder East (which supplies the high
pressure water needed to operate the rockdrills on the reef horizon) has been
fully commissioned and is performing in accordance with its design parameters.
The successful commissioning of this pump station is partly as a result of the
Company utilising the same technology and pumping arrangement at its purpose
built training facility at Sub Nigel, where Hydropower has previously been
successfully commissioned by Gold One.
For the release with pictures and schematics, please refer to the Company`s
website: www.gold1.co.za
In total, the Modder East mine has established five stoping panels to date -
each 25 metres in length. Five panels have been ledged and a further five
panels will be ledged by the end of October. Five more panels will be ledged
in November, which means that all twenty panels required to meet the
production target for the year will have been established by early November.
Stoping widths range from one metre as anticipated in the Bankable Feasibility
Study to 1.8 metres, depending on the thickness and value of the reef. Optimal
stoping widths are determined through the interpretation of sampling results,
obtained from above average sampling frequencies.
For the quarter 52,255 tonnes have been developed and mined of which the plant
has so far milled 50,121 tonnes. Plant start up was slightly ahead of plan
while the total milled tonnes are well ahead of the budget.
2.2.4. Modder East Processing Plant
Gold One reported in the previous quarter that building of the brand new
Modder East processing plant was completed at a total cost of A$ 39.47 million
(R250 million, US$ 33.3 million), ahead of time and under the budget of A$
50.5 million (R320 million, US$ 42.6million), with the first gold from Modder
East underground ore poured on 21 July 2009.
Plant start-up went well and the plant is currently treating about 600 tonnes
of ore per day (18, 000 tonnes per month), from both Modder East and Sub-
Nigel, while design capacity is 100,000 tonnes per month. Gold is smelted and
poured on a weekly basis and dispatched to the world`s largest gold refinery,
the Rand Refinery Limited. This logistics process is running smoothly.
Since start-up, the plant has processed a total 91,531 tonnes of ore from
Modder East, Sub Nigel and from a low grade third party stockpile (which was
used for the initial commissioning of the plant). Modder East contributed
50,121 tonnes which produced 4,807 ounces at an average recovered grade of
2.98g/t, a total of 24,160 tonnes Sub Nigel ore was milled, which at a
recovered grade of 1.32g/t amounted to 1,022 ounces, with the 17,250 tonnes of
low grade stockpile treated yielding 362 ounces at a grade of 0.65g/t.
It is estimated that the plant has locked up approximately 1,600 ounces of
gold during the quarter or expressed differently decreased the recovered grade
by over half a gram per tonne. Most of the lock up can be attributed to the
higher grade Modder East ore. Recoveries have been above expectations and are
running at 93%. Life of mine feasibility recoveries for BPLZ were estimated at
87%, and during the June 2008 update, management adjusted recoveries downward
to 82% over the life of mine. Current recoveries exceed expectations mainly
due to higher residence times and finer grind as the plant has excess capacity
while volume throughput is still in the build-up phase. It is anticipated that
recoveries will decrease as throughput in the plant increases but will remain
at or above the 82% life of mine recovery.
Operating costs are R20/tonne below the feasibility study costs (adjusted for
volume). The Company continues to focus on efficiency and cost improvements at
the plant while all minor commissioning issues have been addressed and where
necessary, rectified. Gold One is working closely with a specialist
consultancy, to reduce the operating costs even further, by optimising
chemical consumptions and improving plant efficiencies.
It is particularly encouraging to note that reagent consumption is
consistently lower than what was suggested by the test work on which the
feasibility was based. Cyanide consumption for example, is approximately one
third of budgeted numbers.
The Company is well advanced with test work aimed at establishing the
feasibility of introducing a gravity circuit into the metallurgical plant.
The initial test work is encouraging and some of the benefits that could be
achieved are increased recoveries, reduced working cost resulting from the
freegold taken out of the circuit upfront and the reduction of gold lock up in
the milling circuit.
2.3. Sub Nigel
The current focus at Sub Nigel remains on entrenching Gold One`s principles
around safe, quality mining. The innovative incentive scheme, aimed at
empowering teams to do their own planning and forecasting, while rewarding
safe, quality mining is fully operational.
While reef production buildup at Sub Nigel has been slower than scheduled, the
important training principles of safe, quality mining highlighted above have
not been compromised for the sake of meeting volume objectives. Of greater
importance is the steady rate of improvement in square metre output on a month
to month basis, with production expected to reach the steady state target of
2000m2 per month in the last quarter of 2009. 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. Ore from Sub Nigel is batch
treated when sufficient quantities have been delivered to Modder East.
First ore was hoisted in January this year and since then 1,022 ounces of gold
have been produced from 24,160 tonnes milled, resulting in a recovered grade
of 1.2g/t. While this number is below the pre-feasibility number of 3.2g/t,
the Company believes the higher grades are still achievable as new panels are
opened up. Currently only existing, previously developed panels are being
worked. Sub Nigel has produced 26,793 tonnes since January; the remainder of
the ore has been stockpiled to be batch treated at an appropriate time.
For the release with pictures and schematics, please refer to the Company`s
website: www.gold1.co.za
Sub Nigel is expected to contribute a further 1,000 ounces during the
remainder of the 2009 calendar year.
3. Business development and exploration review
As the Company continues to grow, Gold One deemed it prudent to strengthen the
project and exploration team with the appointment of Syd Caddy (60) as SVP -
Projects and Exploration and by Dr Richard Stewart (33) as VP - Geology.
3.1. Ventersburg
The Company continues to make good progress at its Ventersburg Project, with
four drill rigs currently in operation. The aim continues to be to define
another 1-million ounces of indicated resource to add to the existing 1.44
million ounces of indicated resource and further 1.84 million ounces of
inferred resource. A total of 5,276 metres of resource drilling has completed,
which is 776 metres in excess of budget and well on track for the 8,000 metres
that have been planned for this phase of the exploration drilling. The Company
has also contracted Turgis Consulting to complete a pre-feasibility report.
The first phase of the prefeasibility commences with a scoping study. The pre-
feasibility report should be completed by the end of 2010. Gold One is aiming
to release a revised resource update for Ventersburg early in 2010.
For the release with pictures and schematics, please refer to the Company`s
website: www.gold1.co.za
3.2. Tulo
At Tulo in Mozambique, good progress has been made in establishing logistics
routes. The project team has identified Lake Malawi as the most viable
logistics supply route and has recently taken delivery of a newly built barge
which will provide a reliable and steady source of consumables and equipment
to site. Access to Lichinga and Metangulu is available by tar road, where
after the acquired barge will ensure that access to site is available all year
round and not just in the dry season as would have been the case via the dirt
road infrastructure currently available. Permission has already been obtained
for the construction of a 20 kilometre access road from Savannah Bay to the
Tulo site, and is due to start shortly.
For the release with pictures and schematics, please refer to the Company`s
website: www.gold1.co.za
3.3. Twin Hills
The Company announced on July 1 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 4 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.
4. Financial Review
Gold One announced on 24 June 2009 that the Company had resolved to raise up
to A$37.5 (R237.5 million, US$31.6 million) from international institutional
and professional investors. This capital raising was successfully completed
and approved by shareholders on 26 August 2009. Subsequent to the completion
of the capital raising, the Company has engaged with its convertible
bondholders who have accepted an offer by Gold One to repurchase approximately
US$12 million of bonds. Once settled, this will reduce the convertible bond
from US$71.6 million to around US$60 million. As at 30 September 2009, Gold
One had cash of approximately A$30 million (R189 million, US$23.8 million)
prior to the repurchase of bonds.
Over A$7 million (R44 million, US$ 5.5 million) of gold revenue has been
received by Gold One in the September quarter and this revenue has been offset
against the capital cost of the Modder East development. Costs and revenue on
the project will continue to be capitalised until such time as the Modder East
project moves into commercial production. Management believes that commercial
production at Modder East is imminent.
The Company will release the quarterly "Appendix 5B" mid-October which will
provide further financial information on cash flows at Gold One for the
quarter.
5. Outlook
Two weeks into the last quarter of 2009 and the Company continues to be
confident in its production forecasts. At Modder East the better than
expected grade and wider than modelled channels underpin this confidence. The
high quality Modder East resource together with Modder East`s shallow depth
and low technical risk attributes provide a solid foundation to build a
quality gold company.
Gold One`s growth projects are taking shape and we will ensure that our
shareholders are aware of any significant developments. The Company is also in
the process of updating its reserves and resources which will take higher gold
prices into consideration. The last declared reserve estimates were calculated
at a gold price of US$629/oz and exchange rate R6.59/US$, equivalent to
R133,200/kg. Gold prices are currently R245,000/kg.
6. Capital Structure
As at 30 September 2009, the Company had 804,966,816 shares in issue, of which
611,540,473 (75.97%) were held on the SA register and 193 426 343 (24.03%) on
the Australian register. Importantly during the quarter under review Uranium
One disposed of its last block of shares removing a share price overhang.
During the quarter management completed a number of marketing activities
primarily focusing on improving liquidity and the makeup of the shareholder
base. The recent capital raise was primarily targeted at institutions in
Australasia. The net result is that 65% of the new shares were placed in
Australasia, 17% in Hong Kong and Singapore and 18% internationally, 72% of
the total was placed with institutional investors. Gold One`s top 30
shareholders make up 65.02% of the company`s register.
ASX trading statistics for the quarter ended 30 September 2009
For the release with pictures and schematics, please refer to the Company`s
website: www.gold1.co.za
JSE trading statistics for the quarter ended 30 September 2009
For the release with pictures and schematics, please refer to the Company`s
website: www.gold1.co.za
Issued by Gold One International Limited
Website : www.gold1.co.za
Parktown, Johannesburg
12 October 2009
MACQUARIE FIRST SOUTH ADVISERS (PTY) LIMITED
Sponsor
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
About Gold One:
Gold One International Limited is an Australian and African gold producer
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
Sydney Head Office Johannesburg Corporate Office
Level 3, 100 Mount Street 45 Empire Road, First Floor
North Sydney NSW 2060 Parktown, 2193
PO Box 1244 North Sydney NSW 2059 Gauteng, South Africa
Telephone: +61 2 9963 6400 Telephone: +27 11 726 1047
Fax: +61 2 9963 6499 Fax: +27 11 726 1087
Issued capital
804,966,816 shares in issues
Options (listed and unlisted: 51,612,353)
ADR ratio 1:10
Stock Exchange Listings
ASX /JSE Limited: GDO
OTCQX International: GLDZY
Directors
NJ Froneman (President and CEO)
CD Chadwick (Chief Financial Officer)
MK Wheatley (non-executive Chairman)
BE Davison (non-executive Director)
KV Dicks (non-executive Director)
WB Harris (non-executive Director)
S Swana (non-executive Director)
KJ Winters (non-executive Director)
PB Kruger (Company Secretary)
Registrars
Registries Limited
Level 7
207 Kent Street
Sydney
NSW
Australia
2000
Tel: +61 2 9290 9600
South African Transfer Secretaries
Computershare Investor Services
70 Marshall Street
Johannesburg
2001
Level 1 ADR sponsor
The Bank of New York Mellon
Depositary Receipts Division
101 Barclay St, 22nd Floor
New York, New York 10286 USA
Tel: +1 212 815 3700
Fax: +1 212 571 3050
Web site: www.adrbny.com
Auditors
PricewaterhouseCoopers
201 Sussex Street
Sydney, New South Wales 1171
Australia
Telephone: +61 2 8266 0000
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 presentation that relates to exploration results,
mineral resources or ore reserves is based on information compiled by Dr.
Richard Stewart, PhD, Pr.Sci.Nat., Vice President, Geology, Gold One, who is a
Member of the Geological Society of South Africa. Dr Stewart is a full-time
employee of Gold One. He has 10 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`. Dr
Stewart consents to the inclusion in this presentation of the matters based on
information compiled by Gold One employees 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: 12/10/2009 07:44:01 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.
