| Mon 5 Mar 2012, 7:06 | | GDO - Gold One International Limited - Gold One to Acquire 100% of Ezulwini Mine |
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GDO
GDO
GDO - Gold One International Limited - Gold One to Acquire 100% of Ezulwini Mine
from First Uranium Significant Value-Unlock Expected by Combining Ezulwini and
Rand Uranium
Gold One International Limited
Registered in Western Australia under the Corporations Act, 2001 (Cth) with
registration number ACN: 094 265 746
(Registered in South Africa as an external company with registration number
2009/000032/10)
ISIN: AU000000GDO5
Share Code on the ASX/JSE: GDO
OTCQX International: GLDZY
("Gold One" or the "company")
Gold One to Acquire 100% of Ezulwini Mine from First Uranium
Significant Value-Unlock Expected by Combining Ezulwini and Rand Uranium
Highlights:
- Gold One to acquire 100% of gold and uranium producer Ezulwini Mine for US$
70 million
- New gold plant with nameplate capacity of 2.4 million tonnes per annum and
a new uranium plant in place with simple, proven uranium technology and
nameplate capacity of 1.2 million tonnes per annum
- Large scale, medium depth, gold and uranium resource
- Capital intensive projects totalling US$ 400 million substantially
completed which include shaft refurbishment and new gold and uranium plant
Gold One is pleased to announce that it has entered into a binding letter
agreement with First Uranium Corporation ("First Uranium") to acquire 100%
of the issued shares of, and all shareholders` claims against Ezulwini
Mining Company (Pty) Limited ("EMC"), held by First Uranium`s wholly owned
subsidiary First Uranium Limited (Cyprus) ("FUL"), for a total
consideration of US$ 70 million (ZAR 539.7 million )(1) (the "Letter
Agreement"). The Letter Agreement with First Uranium is subject to certain
terms and conditions precedent detailed below (the "Proposed Transaction").
(1) Based upon the exchange rate on the date the Letter Agreement from Gold One
was tabled: ZAR 7.71: US$ 1
The Ezulwini Mine ("Ezulwini") is located approximately 40 kilometers from
Johannesburg, South Africa in the West Rand Goldfield of the Witwatersrand
Basin and is contiguous to Gold One`s Cooke Operations.
Ezulwini is an underground mine that has two primary tabular ore bodies
which are approximately 400 metres apart. The Upper Elsburg ("UE") ore
body, where the majority of mining has been done to date, is primarily a
gold deposit. The Middle Elsburg ("ME") ore body is a gold and uranium
bearing deposit that has been less extensively exploited. The establishment
of Ezulwini was substantially completed during the last quarter of 2009,
including the rehabilitation and re-engineering of the main shaft through
the installation of a floating steel tower and the construction of a gold
plant with nameplate capacity of up to 200 000 tonnes per month and a
uranium plant with nameplate capacity of up to 100 000 tonnes per month.
With the capital intensive projects totaling approximately US$ 400 million,
including shaft refurbishment and construction of the gold and uranium
plant, substantially completed, Gold One`s immediate focus will be on
implementing a right sized operation, in line with the re-structuring
program currently being undertaken by Ezulwini, and reducing operating
costs through shared synergies with the Cooke underground operations. The
Company will also consider a focused underground development program to
ensure sustainable underground mining flexibility. Ezulwini represents an
attractive economic proposition in that it provides seamless regional
consolidation with Gold One`s Cooke Operations. The combination of Ezulwini
with the Cooke Operations available under the Proposed Transaction is
expected to provide:
- Immediate benefits in the realisation of uranium production from the
Cooke Operations. This dual commodity mix of gold, combined with high
grade uranium, is anticipated to allow for a flexible co-product
mining approach
- Seamless regional consolidation:
Shared senior management with Cooke 1-3, thereby reducing Cooke
Operations overhead structure;
- Immediate access to the Zuurbekom (2) ore body via development
and infrastructure from the Cooke Operations;
- Existing shaft management; and
- Cost reductions through shared services with the Cooke
Operations.
- Main shaft moiling and maintenance program to sustain a 20 year life
of mine
- Alternative gold plant for Cooke underground ore (allowing Cooke
surface operations to expand using the dedicated Cooke Gold plant),
enhancing operational efficiency by removing toll treating;
- Production expansion opportunities in the short term through the
implementation of a co-product mining strategy;
- Further potential medium term production expansion from Ezulwini SV4
project (3) and Cooke/Ezulwini Boundary Pillar project (4) ; and
- Longer term potential production expansion or extension from the
Zuurbekom project.
In addition to the existing gold operations, in Gold One`s view Ezulwini
provides further tangible upside potential that can be realised in the
short to medium term:
- Ezulwini offers further tailings retreatment opportunities;
- Gold One would secure a portion of a new and existing calcining stream
at the Nuclear Fuels Corporation of South Africa (Pty) Limited
("NUFCOR"), removing cost, time and construction risk for Gold One`s
uranium project;
- Significant upside exists in terms of focused and systematic
exploration potential to further increase or prolong planned
production profiles.
Gold One President and CEO Neal Froneman comments:
"I am delighted to announce that we have reached agreement with First
Uranium. This acquisition is aligned to our business strategy of value-
accretive growth and is a key component in the realization of synergies
across the Cooke Underground and Randfontein Surface Operations. With
immediate access to Ezulwini`s uranium processing facility, we can now look
towards unlocking the value of our joint undergroundresources and begin
capitalising on our gold and uranium co-product strategy in the near term.
The Zuurbekom downdip extension is expected to have a material impact on
the life of Cooke 1 shaft. Our Cooke Operations management team has
extensive knowledge of the Ezulwini orebody and, with their gold and
uranium mining experience, we are well placed to realise the inherent value
from the combination of these assets."
* Based upon the exchange rate on the date the Offer was tabled of ZAR 7.71 :
US$ 1
2) EMC holds the prospecting to the Zuurbekom property which is located
adjacent to the Cooke Operations
(3) The Ezulwini SV-4 project access the Upper Elsburgs but requires dewatering
and infrastructure; 4km South of main shaft
(4) Previously an agreement prevented mining 60m either side of a water pillar
boundary between the Cooke and Ezulwini lease areas; this area hosts
significant gold and uranium potential
** These projects are discussed in detail in the Terms Announcement, titled
"(Terms Announcement) Gold One to Acquire 100% of Ezulwini Mine from First
Uranium", released on the JSE News Service - SENS - and the ASX Market
Announcements Platform simultaneously with this release on 02 March, 2012.
Johannesburg
02 March 2012
Corporate Advisor:
Qinisele Resources (Proprietary) Limited
Australian Corporate Advisor:
Hartleys Limited
Transaction Sponsor and JSE Sponsor:
Macquarie First South Capital (Proprietary) Limited
South African Legal Advisor:
Edward Nathan Sonnenbergs
Australian Legal Counsel:
Ashurst Australia
Canadian Legal Counsel:
Stikeman Elliott
ENDS
Issued by Gold One International Limited
www.gold1.co.za
Neal Froneman
President and CEO
+27 11 726 1047 (office)
+27 83 628 0226 (mobile)
neal.froneman@gold1.co.za
Grant Stuart
Investor Relations
+27 10 591 5219 (office)
+27 82 602 5992 (mobile)
grant.stuart@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 dual listed mid-tier mining group with gold operations and gold
and uranium prospects across Southern Africa. Gold One remains focused on
developing and mining low technical risk, high margin precious metal resources
in diversified jurisdictions. The company`s flagship Modder East gold mine,
commissioned in 2009,distinguishes itself from most other gold mines in South
Africa owing to its shallow nature (300 to 500 metres below surface) and
continues to ramp up production, having produced 123,179 ounces in 2011.
At the beginning of 2012, the group expanded further with the acquisition of
Rand Uranium (Pty) Limited consisting of the Cooke Underground Operations and
the Randfontein Surface Operations located in the West Rand, 30 kilometres from
Johannesburg. The Cooke underground operations continue to deliver in line with
expectations and are currently the subject of a turnaround intervention.
Through Gold One`s purchase of Rand Uranium (Pty) Limited, the group has also
acquired one of the world`s most advanced uranium projects, which envisages
recovering uranium, gold and sulphur from the Cooke Tailings Dam and underground
ores.
The Gold One group is majority-owned by a consortium comprising Baiyin Non-
Ferrous Group Co. Limited, the China-Africa Development Fund, and Long March
Capital Limited and has an issued share capital of 1,415,302,711 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.
Date: 05/03/2012 07:06:01 Produced by the JSE SENS Department.
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