| Wed 15 Dec 2010, 7:11 | | GDO - Gold One - Modder East Resource and Reserve upgrade |
|
GDO
GDO
GDO - Gold One - Modder East Resource and Reserve upgrade
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")
Modder East Resource and Reserve Upgrade
- Modder East resources increase by 18%
- Modder East reserves increase by 13%
- Additional reserves and updated production profile extend Modder East life
of mine by five years to 2022
- Recent high grade drill results not included in updated resources and
reserves
- Shoreline extension exploration to continue during first quarter of 2011
Gold One is pleased to announce updated mineral resources and ore (mineral)
reserves for its flagship Modder East gold mine in Gauteng, South Africa. As
tabled below, measured and indicated mineral resources at Modder East have
increased by 19% from 2.63-million ounces (including 28.83-million tonnes at
2.84 grams per tonne) to 3.13-million ounces (including 46.12-million tonnes at
2.11 grams per tonne). Inferred mineral resources at Modder East have increased
by 16% from 1.04-million ounces (14.98-million tonnes at 2.16 grams per tonne)
to 1.21-million ounces (20.73-million tonnes at 1.81 grams per tonne).
Total ore (mineral) reserves at Modder East have increased by 13% from 1.36-
million ounces (7.65-million tonnes at 5.51 grams per tonne) to 1.53-million
ounces (11.93-million ounces at 4.0 grams per tonne). As a result of the
updated production profile and increases in reserves, the mine life at Modder
East has been extended by five years to a total life of 13 years. The updated
resources and reserves have been audited by SRK Consulting (SA) (Proprietary)
Limited.
Modder East Mineral Resources
Mineral resources have been updated for the Buckshot Pyrite Leader Zone (BPLZ)
and Channel Facies of the Black Reef considering additional information obtained
from underground mining, reduced cut-off grades due to increased gold prices,
and the results of the first three boreholes (DD65 to DD67) drilled during the
2010 surface exploration programme. Boreholes DD65, DD66 and DD67 have been
discussed in the company`s announcements made on 10 and 29 November 2010. The
UK9a Kimberley Reef has been updated for changes in cut-off grades associated
with higher gold prices and a geological loss factor of 5%, to account for
faulting which may impact on mining. The UK5a Kimberley resources have remained
unchanged. The updated resources have accounted for mining depletion up to 30
June 2010. All resources have been quoted over a minimum mining width of 100
centimetres.
The 18% increase in the total resource base has been largely the result of the
application of decreased cut-off grades. At comparative cut-off grades to
previous resource estimations, the measured and indicated BPLZ resources have
increased marginally by 3%, while changes to the indicated Channel Facies
resources have been negligible (1% increase). These changes reflect the
additional BPLZ resources defined during the 2010 exploration drilling
programme, which have replaced resources depleted through mining until 30 June
2010.
Decreased cut-off grades are the result of higher gold prices and exchange
rates. A gold price of US$1,090 per ounce and an exchange rate of ZAR8.30 per
US$1 were considered for this 2010 resource estimation, compared to previous
estimates of US$720 per ounce and an exchange rate of ZAR7.10 per US$1. The
increases in both the US dollar gold price and ZAR/US$ exchange rates have
resulted in lower grade resources becoming economically viable to mine. These
additional resources require little additional capital and are mined at the end
of the mine`s life, resulting in higher overall net present values of the
project underpinning the commercial rationale to lower the cut-off grade. The
lower grade resources are the down-dip extensions to the high grade BPLZ
Shoreline Facies of Modder East. The inclusion of the lower grade resource has
resulted in the total resource grades on both the BPLZ and Channel Facies
decreasing.
Modder East Consolidated Mineral Resource Table1
Tonnes Grade Gold Content
(Mt) (g/t) (Moz)
Measured BPLZ + Channel Facies2,6 0.29 16.25 0.15
Total Measured:3 0.29 16.25 0.15
Indicated BPLZ + Channel Facies2,6 9.19 4.56 1.35
Black Reef Channel 33.19 1.11 1.18
Facies3
UK9a4,6 3.45 4.03 0.45
Total Indicated:3 45.83 2.02 2.98
Total Measured and 46.12 2.11 3.13
Indicated:
Inferred BPLZ + Channel Facies2 2.62 1.85 0.16
Black Reef Channel 4.73 0.73 0.11
Facies3
UK9a4 3.97 3.03 0.39
UK5a5 9.41 1.82 0.55
Total Inferred:3 20.73 1.81 1.21
Total Resource:7 66.85 2.02 4.34
1 Signed-off by Minxcon (Proprietary) Limited, independent resource
consultants to Gold One, audited by SRK Consulting (SA)
2 Quoted at a cut-off of 122 centimetre grams per tonne
3 Quoted at a cut-off of 260 centimetre grams per tonne
4 Quoted at a cut-off of 119 centimetre grams per tonne
5 Quoted at a cut-off of 496 centimetre grams per tone
6 Mineral resources are quoted inclusive of ore (mineral) reserves
7 Mineral resources are reported in accordance with SAMREC guidelines
(estimates would be identical if reported in accordance with JORC
standards)
Modder East Consolidated Ore (Mineral) Reserve Table1
Tonnes Grade Gold Content
(Mt) (g/t) (Moz)
Proved BPLZ + Channel Facies2 0.24 10.90 0.08
Total Proved: 0.24 10.90 0.08
Probable BPLZ + Channel Facies2 8.35 4.00 1.07
UK9a3 3.34 3.50 0.37
Total Probable: 11.69 3.86 1.45
Total Resource:4 11.93 4.00 1.53
1 Signed off by Turgis Consulting (Proprietary) Limited, independent
resource consultants to Gold One, audited by SRK Consulting (SA)
2 Quoted at a cut-off of 149 centimetre grams per tonne
3 Quoted at a cut-off of 146 centimetre grams per tonne
4 Ore (Mineral) Reserves are reported in accordance with SAMREC
guidelines (estimates would be identical if reported in accordance with
JORC standards)
Due to the channelised nature of the UK9a orebody, the impact of reduced cut-off
grades on the indicated resources has been negligible. The inferred UK9a
resources, where modeled channels are less constrained, are more sensitive to
changes in cut-off grades. The UK9a inferred resources have increased by 22%
from 0.32-million ounces (2.77-million tonnes at 3.58 grams per tonne) to 0.39-
million ounces (3.97-million tonnes at 3.03 grams per tonne).
A potential extension to the high grade BPLZ shoreline has been identified in
boreholes DD68 and DD69 (refer to company`s announcements made on 10 and 29
November 2010). The results of these two boreholes have not been incorporated
into the resources reported in this update. Drilling to confirm and delineate
the shoreline extension will commence in the first quarter of 2011 and the
results will be included in subsequent resource estimations for Modder East.
Gold One President and CEO Neal Froneman comments: "After more than a year of
mining, it is satisfying that extensive underground sampling and mining to date
has confirmed our initial geological modelling and demonstrated the continuous
and robust nature of the Black Reef orebody. I look forward to the results of
our continued exploration programme and the impact this may have on our current
resources."
Modder East Ore (Mineral) Reserves
The BPLZ proved and probable reserves have increased by 10% to 1.16-million
ounces (including 8.58-million tonnes at 4.19 grams per tonne). The UK9a
reserves have increased by 24% to 0.37-million ounces (including 3.34-million
tonnes at 3.5 grams per tonne).
Similar to the updated resources, increased reserves have resulted mainly from
the use of decreased cut-off grades associated with higher gold prices and
exchange rates. A gold price of US$990 per ounce and an exchange rate of
ZAR8.30 per US$1 were used for reserve estimation purposes, based on consensus
analyst forecasts. Previous reserve estimates had considered US$629 per ounce
and an exchange rate of ZAR6.59 per US$1. At the same cut-off grades used in
the previous reserve estimation, the BPLZ reserves reduced by approximately 3%
and the UK9a reserves remained unchanged.
In addition to the lowered cut-off grades, dilution and the mine call factor for
the BPLZ have also been revised since the previous reserve estimation. These
revisions have been made on the basis of experience gained over the past 18
months of mining. In-stope dilution on the BPLZ has been increased by 5% and
additional dilution to account for gullies and winch beds has remained at 8%.
The mine call factor has been reduced by 5% from 95% to 90% i.e. a 5% increase
in gold loss during the mining process. In addition, metallurgical recoveries
for the BPLZ have increased from 88% to 95% on the basis of consistent
metallurgical recoveries ranging between 95% and 96% to date. Reserves are
reported as a head grade to the metallurgical plant and, as a result, changes to
the metallurgical recoveries do not impact on the reserve grade. Changes to
metallurgical recoveries do, however, impact on forecast gold produced over the
mine life.
(For the release with the schematics relating to the additional reserves as a
result of the lowered cut-off grade, please refer to the Company`s website:
www.gold1.co.za)
The revised production profile and additional reserves have resulted in a
significant extension to Modder East`s life of mine, with current reserves
modelled until 2022. Modder East`s total life of mine is now 13 years,
representing a five year increase over the previous life of mine of eight years.
At the metallurgical plant name plate capacity of 100,000 tonnes per month,
production between 2012 and 2015 is in excess of 150,000 ounces per annum.
Thereafter, gold production decreases to between 100,000 and 120,000 ounces per
annum until 2020 and then further decreases to 40,000 per annum until 2022,
during which time mining will only be undertaken on the UK9a Kimberley reef.
The decrease in gold production in the latter years is primarily due to lower
grade.
Although the total reserve grade has decreased, this has been primarily a result
of the inclusion of additional low grade reserves. These lower grade reserves
are mined in the latter half of the mine`s life and therefore have little impact
on the first five years of Modder East`s mine plan.
Gold One President and CEO Neal Froneman comments: "The nature of the BPLZ
orebody lends itself to increased reserves with improving gold prices through
the inclusion of down-dip lower grade resources. Importantly, we maintain a
steady state production in excess of 150,000 ounces in the short to medium term
with the increased reserves providing significant flexibility for the operation
in the longer term."
Gold One`s Total Resource and Reserve Statement
As tabled below, the increase in the Modder East resources and reserves has
increased Gold One`s total resource base to 21.71-million ounces of gold,
including 8.60-million ounces in the measured and indicated resource category
(88.09-million tonnes at 3.03 grams per tonne) and 13.11-million ounces in the
inferred category (103.06-million tonnes at 3.95 grams per tonne). The company`s
proved and probable reserves have increased to 1.53-million ounces at 4.0 grams
per tonne.
Gold One International Consolidated Mineral Resource Statement
Tonnes Grade Gold Content
Measured (Mt) (g/t) (Moz)
Modder East 1,2 0.29 16.25 0.15
Total Measured: 0.29 16.25 0.15
Indicated Modder East 1,2 45.83 2.02 2.98
Megamine 3 21.55 4.36 3.02
Ventersburg 4 20.42 3.70 2.45
Total Indicated: 87.80 2.99 8.45
Total Measured and Indicated: 88.09 3.03 8.60
Inferred
Modder East 2 20.73 1.81 1.21
New Kleinfontein and 4.27 6.00 0.83
Turnbridge 5
Ventersburg 4 13.44 3.31 1.44
Megamine 3 64.62 4.64 9.63
Total Inferred: 103.06 3.95 13.11
Total Measured, Indicated and Inferred: 6 191.15 3.53 21.71
1 Mineral Resources are quoted inclusive of ore reserves.
2 Signed-off by Minxcon, independent resource consultants to Gold One,
audited by SRK Consulting (SA).
3 Signed-off by Dr I.C. Lemmer and Minxcon, independent resource
consultants to Gold One, audited by SRK Consulting (SA).
4 Signed-off by Dr I.C. Lemmer, independent resource consultant to Gold
One, audited by SRK Consulting (SA).
5 Signed-off by Camden Geoserve Close Corporation, independent resource
consultants to Gold One, audited by SRK Consulting (SA).
6 Mineral Resources are reported in accordance with SAMREC guidelines
(estimates would be identical if reported in accordance with JORC
standards).
Gold One International Mineral (Ore) Reserve Statement1,2
Tonnes Grade Gold Content
Probable Modder East (Mt) (g/t) (Moz)
Proved Reserves 0.24 10.90 0.08
Probable Reserves 11.69 3.86 1.45
Probable and Proved Reserves 11.93 4.00 1.53
1 Signed off by Turgis Consulting, independent resource consultants to
Gold One, audited by SRK Consulting (SA).
2 Ore (Mineral) Reserves are reported in accordance with SAMREC
guidelines (estimates would be identical if reported in accordance with
JORC standards).
Issued by Gold One International Limited
www.gold1.co.za
Parktown, Johannesburg
15 December 2010
MACQUARIE FIRST SOUTH ADVISERS (PTY) LIMITED
JSE Sponsor
For further information contact:
Neal Froneman Ilja Graulich
President and CEO Investor Relations
+27 11 726 1047 (office) +27 11 726 1047 (office)
+27 83 628 0226 (mobile) +27 83 604 0820 (mobile)
neal.froneman@gold1.co.za ilja.graulich@gold1.co.za
Carol Smith Derek Besier
Investor Relations Farrington National Sydney
+27 11 726 1047 (office) +61 2 9332 4448 (office)
+27 82 338 2228 (mobile) +61 421 768 224 (mobile)
carol.smith@gold1.co.za 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 kilometres 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 metres to 500 metres 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 806,875,987 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 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 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 Senior Vice President
of Business Development 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 and resource statements released by Gold One on the Stock
Exchange News Service (SENS) on 7 December 2010 concerning the company`s
Ventersburg project.
Date: 15/12/2010 07:11:51 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.
