| Mon 5 Mar 2012, 7:05 | | GDO - Gold One International Limited - Gold One to Acquire 100% of Ezulwini |
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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").
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 underground resources 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."
(1) Based upon the exchange rate on the date the Letter Agreement from Gold
One was tabled: ZAR 7.71: US$ 1
1. Overview of the Ezulwini Mine and Proposed Transaction Rationale
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.
Ezulwini is a developing producer which sold 59,689 ounces of gold and
produced 31,407 pounds of uranium in 2011. In addition, previous work
suggests that the mine represents in excess of 13.2 million tonnes of
measured and indicated mineral resources containing 2.7 million ounces of
gold, 6.6 million pounds of uranium and 159 million tonnes of inferred
mineral resources containing 25.5 million ounces of gold and 189 million
pounds of uranium, as detailed below.
Ezulwini Mine: Summary of Mineral Resource Statement as at December 31, 2010
Grade Content
Category Reef Tonnes Gold U3O8 Gold U3O8
(t (g/t) (%) (`000 (lb 000s)
`000) oz)
Measured UE Shaft 1,732 8.39 467
Reef Pillar
Middle 1,131 6.03 0.067 219 1,671
Elsburg
Total 2,863 7.46 687 1,671
Indicated UE Shaft 3,348 6.31 679
Reef Pillar
UE Pillars 1 2,227 5.59 400
& 2(EC)
UE Pillars 1 521 5.14 86
& 2(ED)
UE Pillars 3 118 7.64 29
(MB)
UE Pillars 4 1,285 6.68 276
(ED)
Middle 2,873 5.39 0.077 498 4,876
Elsburg
(E9Ec)
Total 10,372 5.90 1,968 4,876
Measured UE Shaft 5,080 7.02 1,147
and Pillar
Indicated
Reef
UE Pillars 1 2,227 5.59 400
& 2(EC)
UE Pillars 1 521 5.14 86
& 2(ED)
UE Pillars 3 118 7.64 29
(MB)
UE Pillars 4 1,285 6.68 276
(ED)
Middle 4,004 5.57 0.074 717 6,546
Elsburg
(E9Ec)
Total 13,235 6.24 2,655 6,546
Inferred Upper 45,712 5.43 7,977
Reef Elsburg
UE Pillars 1 45 8.62 12
& 2(EC)
UE Pillars 1 112 12.50 45
& 2(ED)
Middle 7,737 6.43 0.088 1,599 15,006
Elsburg
(E9Ec)
Left below 105,07 4.70 0.075 15,878 173,689
2,500m 5
Total 158,86 5.00 25,512 188,695
1
As per updated Technical Report Preliminary Assessment for the Ezulwini Mine
prepared by Roscoe Postle and Associates Inc - February 2, 2011
Notes:
1. Canadian Institute of Mining Metallurgy and Petroleum (CIM), JORC and
SAMREC definitions were followed for mineral resources.
2. UE refers to the Upper Elsburg Reef horizon, which is mined for gold
only; ME refers to Middle Elsburg Reef horizon, which is mined for gold
and uranium.
3. Mineral resources were estimated at a cut-off grade of 4.0 g/t Au for
the UE and 3.0 g/t Au for the ME.
4. Mineral resources were estimated using an average long-term gold price
of US$775 per ounce, US$56 per pound U3O8, and a US$/R exchange rate of
1:7.
5. A minimum mining width of 1.0 m was used.
6. Rows and columns may not add exactly due to rounding
7. Mineral resources that are not mineral reserves do not have demonstrated
economic viability.
8. 2009 and 2010 production deducted as per First Uranium records.
9. The mineral resource estimates were updated in a Technical Report by
Roscoe Postle and Associates Inc. dated February 2, 2011. Roscoe Postle
and Associates has not updated the Technical Report to reflect any new
information since the date of the report. The mineral resource statement
has been reviewed and approved by D Bergen, P.Eng.; W Valliant, P.Geo.,
and D Ross, P.Geo. Please refer to the "Competent Persons" section of
this announcement for further details about the qualifications of these
persons and the basis on which these estimates are included in this
announcement.
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.
(2) EMC holds the prospecting right to the Zuurbekom property which is
located adjacent to the Cooke Operations
(3) The Ezulwini SV-4 project accesses 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
Ezulwini: Additional Opportunities
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.
2. The Proposed Transaction
First Uranium and Gold One have entered into the Letter Agreement for the
acquisition of all the issued shares of and all shareholders` and other First
Uranium group claims against EMC and/or FUL, for an aggregate consideration
of US$ 70 million (the "Purchase Price"). The Purchase Price is to be paid
in cash on the completion date (as defined below) of the Proposed
Transaction.
The final and conclusive terms of the Proposed Transaction, will be set out
in the definitive transaction agreements to be entered into between the
parties at a later date ("Transaction Agreements"). The Completion Date will
be defined in the Transaction Agreements, and is currently anticipated to be
no later than Friday, 29 June 2012, unless extended by mutual agreement
("Completion Date").
As part of the Proposed Transaction, Gold One will make available to First
Uranium a loan facility in the amount of US$ 10 million ("The Loan Facility")
on, amongst other, the following terms:
- AngloGold Ashanti Limited entering into a definitive written
agreement with First Uranium or the applicable member of the First
Uranium Group to acquire First Uranium (Pty) Ltd and/or Mine Waste
Solutions (Pty) Ltd, and such acquisition being publicly announced;
- The Loan Facility will be available for draw down from the date of
closing of the loan agreement until the earlier of the date of
termination of, or the Completion Date of the Proposed Transaction;
and
- Will bear interest at the South African Prime Rate of interest,
nominal annual compounded monthly in arrears.
On completion of the Proposed Transaction, all loan amounts drawn under the
Loan Facility will be deducted from the Purchase Price or, in the event that
the Proposed Transaction does not proceed, will be repaid upon written demand
by Gold One.
The Loan Facility will be guaranteed by Main Street 789 Security SPV (the
security special purpose vehicle that has guaranteed payment when due of all
indebtedness of the First Uranium Group) so that the loan facility shall
share in the benefit of the securities held by the Security SPV
proportionally with the other First Uranium group creditors secured by the
Security SPV.
Management Control
First Uranium has undertaken to provide the Gold One management team with
management control over Ezulwini as soon as possible after the date of
signature of the Transaction Agreements and the approval of the Proposed
Transaction by the South African Competition authorities.
3. Conditions Precedent
The Letter Agreement and implementation of the Proposed Transaction are
subject to and conditional upon the fulfillment or waiver (if applicable) of,
inter alia, the following conditions precedent:
- Gold One completing to its satisfaction the outstanding aspects of
its due diligence in respect of the First Uranium group by March
12, 2012, such outstanding aspects being due diligence in respect
of:
* the constituting documents of FIU and FUL, to confirm
corporate existence and authorities to conclude and execute
the transaction;
* evaluating the financial statements and any taxation related
issues in regard to FUL;
- Gold One being provided with a 6 month planned budget ("the
Budget") for the period 1 January to 30 June 2012 in respect of
EMC`s operations and capital expenditure. Such budget shall be
approved by Gold One and will specifically provide for EMC having
sufficient cash resources on hand to meet the following
liabilities:
* the first third payment due in terms of the First Uranium
Retention Bonus for senior employees dated 24 October 2011;
* R20,000,000 for water use license and any outstanding
permitting related issues;
* R40,000,000 for additional rehabilitation obligations of
Ezulwini that have not currently been provided for.
- On the date that Gold One acquires management control and without
taking into account intercorporate debt among companies in the
First Uranium group of companies, being First Uranium and its
subsidiary and affiliated companies (the "First Uranium Group"),
the ratio of the current assets of EMC (being all assets classified
as such in accordance with IFRS) to the current liabilities of EMC
(being all liabilities classified as such in accordance with IFRS,
excluding the current portion related to the EMC gold stream
transaction liability) shall be one to one (1:1);
- All FUL`s and/or EMC`s guarantees (as may be applicable ) that
operate as security for the secured trust indentures being
released, as well as FUL`s and/or EMC`s guarantees (as may be
applicable) that operate as security for any other creditor that is
secured by means of the Main Street 789 (Pty) Limited structure
being released;
- All security over the sale shares and claims being acquired being
cancelled, as well as all security over the assets of FUL and/or
EMC ( as may be applicable) in respect of liabilities of the First
Uranium Group, save in respect of liabilities of FUL and/or of EMC
itself ( as may be applicable ) in respect of its own assets and
operations, being cancelled;
- Unless the debentures (as defined in the Debenture Indenture) are
fully paid by the Completion Date, the Debenture Trustee (as
defined in the Debenture Indenture) and the requisite majority of
the holders of debentures shall have agreed that the Purchaser
shall not be a "Successor Company" in terms of Article 14 of the
Debenture Indenture dated 3 May 2007 (the "Debenture Indenture");
- EMC has completed its restructuring in terms of Section 189 of the
South African Labour Relations Act, as publicly announced in
December 2011;
- Gold One and First Uranium negotiating in good faith and executing
the necessary Transaction Agreements, to give effect to the
Proposed Transaction, on terms mutually acceptable to the parties,
each acting reasonably, which shall contain all necessary
warranties and indemnities customary in agreements of this nature;
- The approval of the Transaction Agreements by Gold One`s and First
Uranium`s board of directors;
- The approval of the Proposed Transaction and passing of such
resolutions as may be required by First Uranium`s shareholders in a
general meeting, and/or by FUL`s shareholder, First Uranium, to the
extent required;
- The approval of the Proposed Transaction by the competition
authorities of the Republic of South Africa ("South Africa"), to
the extent required;
- All necessary consents, rulings and/or directives being obtained
from the Minister of Mineral Resources and/or the Department of
Mineral Resources ("DMR"), to the extent required;
- The withdrawal of the Section 47 Notice issued by the DMR in
respect of EMC`s mining right in March 2011;
- The requisite approval being granted to Gold One under the National
Nuclear Regulator Act, 1999, if required;
- First Uranium obtaining from Franco Nevada (Barbados) Corporation
("FNB"):
* such amendments to the gold stream agreements concluded by the
First Uranium Group with FNB as are required by Gold One;
* such consent for the Proposed Transaction as may be required
from FNB under the gold stream and any other applicable
agreement between FNB and the First Uranium Groups; and
* confirmation by FNB that it is aware of the Section 47 Notice
referred to in the paragraph above and is satisfied with the
action taken by EMC in response thereto;
- First Uranium obtaining from all other parties to the gold stream
agreements referred to in above and from all other parties with
which the First Uranium Group has contracted and who may be
affected by the Proposed Transaction, such consents to the Proposed
Transaction as may be required from them;
- The consent to the cession from First Uranium to Gold One of 25%
(550 tonnes per annum of uranium bearing material) of the capacity
of Stream 3 and related rights and obligations (including the
corresponding transportation, treatment and capital fees) under the
Toll Treatment Agreement, as amended from time to time, between
First Uranium and NUFCOR, for the continued processing of uranium
bearing material produced at EMC`s plants situated at number 2
Goudlaan, Westonaria, by NUFCOR.
- All necessary approvals being obtained from the ASX, TSX, JSE and
any other regulatory body having jurisdiction over the Proposed
Transaction, to the extent required;
- Approval from the South African Reserve Bank, to the extent
required;
- In the event that the Company acquired in terms of the Proposed
Transaction is FUL, that the Transaction Agreements contain such
terms to the satisfaction of Gold One, acting reasonably, with
regard to governing law (and the proof thereof in the event of a
dispute, should such law be Cypriot law), jurisdiction and dispute
resolution;
- That there be no material adverse change with regard to the Company
and/or its business affecting the Company and/or its business from
the date of acceptance in writing of the Letter Agreement to the
date of fulfillment or waiver by the Purchaser of all the
conditions precedent applicable to the Proposed Transaction.
Gold One is of the opinion that the conditions precedent contained above can
be fulfilled in a timely and efficient manner.
4. Exclusivity Period
Gold One has been granted exclusivity by First Uranium until Monday, 12 March
2012 to conduct its outstanding legal and financial due diligence, and
Friday, 16 March 2012 5:00pm Central African Time to negotiate the definitive
Proposed Transaction Agreements. In the event of the board of directors of
First Uranium resolving not to proceed with the Proposed Transaction or Gold
One terminating the Letter Agreement or the Proposed Transaction due to any
material breach by First Uranium, Gold One will be entitled to a break fee of
US$2,500,000.
Should an unsolicited superior proposal be received by First Uranium, Gold
One will be granted five business days` notice of such proposal to enable
Gold One to amend the terms of the Proposed Transaction in a way that would
enable the parties to proceed with the transaction as amended, should it
elect to do so.
05 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.
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 mineral resource estimates were updated in a Technical Report by Roscoe
Postle and Associates Inc. dated February 2, 2011. The mineral resource
statement included in this announcement has been reviewed and approved by D
Bergen, P.Eng.; W Valliant, P.Geo., and D Ross, P.Geo.; each of whom is a
"qualified person" under NI 43-101 with regard to these resources.
Similarly, and 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), the information in this announcement that relates to Mineral
Resources is based on information compiled by D Bergen, P.Eng.; W Valliant,
P.Geo., and D Ross, P.Geo, each of whom is a member of National Instruments
43-101 and is employed by Scott Wilson Roscoe Postle Associates Inc.
Each of the above persons:
has sufficient 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 as
defined in both the JORC Code and the SAMREC Code; and
consents to the inclusion of the information in this announcement that
relates to Mineral Resources in the form and context in which it
appears.
Gold One has not undertaken (either on its own accord, or through a third
party on its behalf) any independent investigation, verification or analysis
of the mineral resource estimates prepared by Roscoe Postle and Associates
Inc. Accordingly, to the extent noted above, Gold One:
is relying on the mineral resource estimates prepared by Roscoe Postle
and Associates who was engaged by First Uranium; and
makes no representation or warranty as to the adequacy or accuracy of
the estimates, and disclaims to the maximum extent permitted any
liability for any direct, indirect or consequential loss or damage
suffered by any person or persons as a result of relying on these
estimates.
Gold One intends to undertake a review of these mineral resource estimates
when it is in a position to do so.
SAMREC, CANADIAN NI 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.
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approved or disapproved the information contained herein.
Date: 05/03/2012 07:05:15 Produced by the JSE SENS Department.
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