| Thu 28 Oct 2010, 7:18 | | GDO - Gold One International Limited - September 2010 quarterly results |
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GDO
GDO
GDO - Gold One International Limited - September 2010 quarterly results
Gold One International Limited
Registered in Western Australia under the Corporations Act, 2001 (Cth)
Registration number ACN: 094 265 746
Registered as an external company in the Republic of South Africa
Registration number: 2009/000032/10
Share code on the ASX/JSE: GDO
OTCQX International: GLDZY
ISIN: AU000000GDO5
("Gold One" or the "company")
SEPTEMBER 2010 QUARTERLY RESULTS
19,470 OUNCES PRODUCED, A 58% INCREASE ON THE JUNE 2010 QUARTER
OPERATING CASH FLOW OF US$13.4-MILLION
RESOURCE UPGRADED TO 20.42-MILLION OUNCES
Gold One is pleased to announce record output for the September 2010 quarter
with group production amounting to 19,470 ounces, a 58% improvement on the
previous quarter`s 12,287 ounces.
The group production is in line with the quarterly forecast and was achieved
without compromising Gold One`s excellent safety record, which is currently at
a progressive lost-time injury frequency rate (LTIFR) of 0.35 per 200,000
hours, well below the Australian gold mining industry`s LTIFR benchmark of
one.
Despite a 5% strengthening of the South African rand to ZAR7.33/US$1, Modder
East`s cash costs have remained steady for the third quarter at US$483/oz
(compared to US$488/oz for the second quarter). At budgeted exchange rates of
ZAR8.41/US$1 cash costs would have been US$ 419/oz, which is marginally higher
than the company`s target of $400/oz for this year.
Gold One President and Chief Executive Officer Neal Froneman comments, "Not
only has production from Modder East undergone a quantum leap in the third
quarter, but the company has also made significant strides in terms of
advancing our exploration projects, commencing the implementation of our
Megamine strategy in the form of Goliath Gold, and receiving ABSA and BNP
Paribas credit committee approval for a US$65-million debt facility to
refinance Gold One`s convertible bonds."
Revenue for the quarter increased by 59% to US$23.5-million and group cash
operating costs were US$10.1-million, resulting in a 63% increase in operating
cash flow of US$13.4-million. Development and capital expenditure for the
quarter across the Modder East and Sub Nigel projects was US$8.5-million,
resulting in a net US$ 4.9-million positive cash flow.
Gold One has ended the third quarter of 2010 with US$9.2-million of cash on
hand and receivables (received from the Rand Refinery on 1 October 2010),
compared to an end of June 2010 quarter cash on hand and receivables balance
of US$8.6-million. The quarterly interest payment of US$1.27-million on the
company`s 501 convertible bonds was made last month.
Build up in production levels is anticipated to continue into the fourth
quarter of 2010, and after due consideration for the disruptive December
festive season quarterly production is estimated at between 20,000 and 22,000
ounces.
Goliath Gold
In addition to the increased production levels at Modder East, this month Gold
One also announced the creation of Goliath Gold Mining Limited, thus
commencing with the company`s stated strategy of spinning out its Megamine
assets. Gold One will acquire control of investment holding company White
Water Resources through the sale of Megamine to White Water Resources,
creating Goliath Gold. The immediate implication of this acquisition is the
crystallisation of over A$38-million (ZAR260-million) in value for Gold One
from the Megamine assets. In addition, these resources will be fully
developed through Goliath Gold without detracting from Gold One`s future
strong cash flow status and stated strategy of developing shallow projects.
Following completion of the quarter, Gold One further announced a resource
upgrade of the Megamine portfolio. Indicated resources have increased from
0.31-million ounces (2.98-million tonnes at 3.21 grams per tonne), to 3.02-
million ounces (21.55-million tonnes at 4.36 grams per tonne), while inferred
resources have increased from 5.58-million ounces (50.64-million tonnes at
3.46 grams per tonne) to 9.63-million ounces (64.62-million tonnes at 4.64
grams per tonne). This means that Gold One`s total resource base has increased
to 20.42-million ounces, including 7.08-million ounces (59.11-million tonnes
at 3.73 grams per tonne) in the indicated category and 13.34-million ounces
(97.34-million tonnes at 4.26 grams per tonne) in the inferred category.
Froneman comments," With continuing ramp up in production, progressing of
thedebt facility, and the anticipation of updated resources for Modder East
(and associated reserves) and Ventersburg, the final quarter of 2010 promises
to be a strong one for Gold One."
(Average exchange rate of ZAR7.33/US$1)
Issued by Gold One International Limited
www.gold1.co.za
Parktown, Johannesburg
28 October 2009
MACQUARIE FIRST SOUTH ADVISERS (PTY) LIMITED
JSE Sponsor
Neal Froneman President and CEO
+27 11 726 1047 (office) +27 83 628 0226 (mobile)
neal.froneman@gold1.co.za
Ilja Graulich Investor Relations
+27 11 726 1047 (office) +27 83 604 0820 (mobile)
ilja.graulich@gold1.co.za
Carol Smith Investor Relations
+27 11 726 1047 (office) +27 82 338 2228 (mobile)
carol.smith@gold1.co.za
Derek Besier Farrington National Sydney
+61 2 9332 4448 (office) +61 421 768 224 (mobile)
derek.besier@farrington.com.au
About Gold One
Gold One is a gold producer listed on the financial markets operated by the
ASX Limited and the JSE Limited, issuer code GDO. Its flagship operation is
the newly built shallow Modder East mine on the East Rand, some 30 km from
Johannesburg.
Modder East is the first new mine to be built in the region in 28 years and
distinguishes itself from most of the other gold mines in South Africa owing
to its shallow nature (300 m to 500 m below surface). To date Modder East has
provided direct employment opportunities for over 1,100 people. Gold One also
owns the nearby existing Sub Nigel mine, which is used primarily as a training
centre in the build-up of Modder East to full production. Gold One`s other
projects and targets include Ventersburg in the Free State Goldfields, the
Tulo concession in Mozambique and the Etendeka greenfield project in Namibia.
Gold One has an issued share capital of 806,268,333 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 PERSON
The information in this release that relates to exploration results, mineral
resources or ore reserves is based on information compiled by 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 the vice president
of geology for Gold One, with which he is a full-time employee. He has 10
years` experience which is 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 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). Dr Stewart consents to the inclusion in this release of the
matters based on information compiled by Gold One employees and it`s
consultants in the form and context in which they appear. 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 by Gold One on the Stock Exchange News Service (SENS) on
11 and 13 October 2010 concerning the company`s Megamine and Goliath Gold
Mining Limited respectively.
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: 28/10/2010 07:18:16 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.
