| Mon 31 Jan 2011, 7:06 | | GDO - Gold One International Limited - Press Release: December 2010 Quarterly |
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GDO
GDO
GDO - Gold One International Limited - Press Release: December 2010 Quarterly
Results
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")
December 2010 Quarterly Results
- Quarterly gold production targets achieved with production increasing to
21 480 ounces
- Modder East cash costs maintained at US$ 467/oz (ZAR 104 049/kg)
- Net cash flow from operations increased by 70% to US$ 8.35 million (ZAR
57.86 million)
- Cash and gold receivables balance increased by 26% to US$ 11.55 million
(ZAR 76.77 million)
- US$ 18 million (ZAR 132.12 million) profit before tax for the 2010
financial year, based on unaudited financials
- 63% increase in Modder East mine life to 13 years total life (until
2022)
- Substantial increase in group mineral resources to 21.71 million ounces,
including a 96% increase in measured and indicated resources and a 41%
increase in inferred resources
- Excellent 2010 safety performance resulting in a progressive LTIFR of
0.48 per 200 000 hours
- Convertible bondholders unanimously confirm that they will not exercise
their once-off put option to redeem their bonds for cash
JOHANNESBURG - 31 January 2011. Gold One (ASX and JSE: GDO) is pleased to
report that during the quarter under review the company produced 21 480
ounces, a 10% increase relative to the September quarter and in line with
production guidance. Given that the company`s operations ceased for the
festive break on 23 December, these production results were achieved with
only 91% of the quarter being available for production. Total gold
production for 2010 amounts to 66 445 ounces.
December quarter cash costs of US$ 467/oz (ZAR 104 049/kg) were achieved in a
strong exchange rate environment of ZAR 6.93 / US$ 1. For the 2010 year, gold
was produced at an average cash cost of US$ 484/oz (ZAR 114 216/kg) given an
average exchange rate of ZAR 7.34 / US$ 1. Adjusting actual cash costs using
the budgeted exchange rate of ZAR 8.41 / US$ 1, the average cash cost for
2010 equates to US$ 423/oz (ZAR 99 822/kg). This was negatively affected by
the April strike month and if this period is excluded, the annual cash cost
for the balance of 2010 equates to US$ 410/oz (ZAR 96 754/kg) (at budgeted
exchange rates), compared to guidance of US$ 400/oz.
2010 represented Modder East`s first full year of commercial production,
during which Gold One achieved its maiden annual net profit before tax of US$
18 million (ZAR 132.12 million), based on the unaudited financial statements.
The full audited annual financial statements will be released toward the end
of February 2011. The lower cash costs and higher production levels in the
December quarter resulted in net cash flow from operations of US$ 8.35
million (ZAR 57.86 million), a 70% increase relative to the September 2010
quarter. Gold One increased its cash on hand and gold receivables by 26% to
US$ 11.55 million (ZAR 76.77 million) during the December quarter, compared
to an end of September 2010 quarter cash on hand and gold receivables balance
of US$ 9.2 million (ZAR 64.33 million).
The final quarter of the 2010 financial year featured continued build up in
production levels at Modder East. An increase of on-reef development meant
that, at the end of December 2010, sufficient reserves had been opened up to
support the planned production profile for a period in excess of six months
should no further development take place. This level of flexibility,
combined with the continuous build up, underpins the company`s confidence in
achieving the 2011 March quarter`s guidance of 25 000 ounces.
Importantly, these achievements were made without compromising our strong
safety record, with the 2010 total lost-time injury frequency rate per 200
000 hours (LTIFR) of 0.48, better than the Australian industry benchmark of
one LTIFR against which Gold One is measured.
The December 2010 quarter also saw an update of the company`s mineral
resources and ore (mineral) reserves at Modder East, Ventersburg, and
Megamine. Gold One`s total resource base now stands at 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 ore reserves have increased to 1.53
million ounces at 4.0 grams per tonne, resulting in an additional five years
being added to the mine life for Modder East (a detailed breakdown of the
updated mineral resources and reserves is available on the Gold One website).
Gold One President and CEO Neal Froneman comments, "I am delighted with the
positive operational and financial performance of the company during the
fourth quarter of 2010, which has provided us with a solid foundation as we
enter the new year. Our primary focus for 2011 will be on maintaining the
production build up at Modder East and cementing our position as one of the
lowest cost gold producers in the industry. In addition, the continued
advancement of our exploration projects aims to ensure a sustainable pipeline
of production for future growth. Over the past years, Gold One`s focus has
primarily been on successfully bringing Modder East into production. With
the solid operational base that has been established the company is now in a
position to dedicate resources to focus on external, value accretive growth
opportunities."
(Average exchange rate of ZAR 6.93 / US$ 1 for the quarter, exchange rate for
balance sheet date of 31 December 2010 of ZAR 6.6468 / US$ 1)
ENDS
Issued by Gold One International Limited
Website: www.gold1.co.za
Parktown, Johannesburg
31 January 2011
JSE SPONSOR
Macquarie First South Advisers (Pty) Limited
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 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 buildup 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
807,080,905 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 Senior Vice
President: 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 ASX
Company Announcements Platform and the Stock Exchange News Service (SENS) on
11 October 2010 (Megamine), 7 December 2010 (Ventersburg), and 15 December
2010 (Modder East).
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: 31/01/2011 07:06:02 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.
