| Mon 2 Apr 2012, 7:05 | | GDO - Gold One International Limited - Gold One Signs Definitive Agreement for |
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GDO
GDO
GDO - Gold One International Limited - Gold One Signs Definitive Agreement for
Acquisition of Ezulwini Mine
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
ISIN: AU000000GDO5
OTCQX International: GLDZY
("Gold One" or the "company")
Gold One Signs Definitive Agreement for Acquisition of Ezulwini Mine
Gold One is pleased to announce that the company has signed a binding Sale of
Shares and Claims Agreement (the "Acquisition Agreement") for the acquisition
of 100% of the issued shares of, and all shareholders` claims against, First
Uranium Limited (Cyprus) ("FUL"), which holds 100% of the issued shares of,
and all shareholders` claims against, Ezulwini Mining Company (Pty) Limited
("EMC"), for a total consideration of US$ 70 million (ZAR 539.7 million(1))
from First Uranium Corporation ("First Uranium") (the "Proposed Transaction").
The Acquisition Agreement reflects the material terms and conditions outlined
in the Letter Agreement entered into by Gold One and First Uranium on 2 March
2012 and detailed in the Gold One`s announcement released on the same day.
The Acquisition Agreement is subject to the fulfillment or waiver, as the case
may be, of certain conditions precedent, which are customary for transactions
of this nature. These conditions are required to be fulfilled or waived on or
before 29 June 2012. Gold One considers all conditions precedent can be
achieved prior to that date. Such conditions precedent include, inter alia,
and to the extent required:
- All releases, consents, waivers and/or amendments to the security
documents, relating to the secured notes issued by First Uranium and one of
its group companies, necessary to release the shares in and claims against
FUL
and/or EMC;
- All encumbrances over the sale shares and sale claims being acquired by
Gold One being cancelled;
- All encumbrances over the assets of FUL and/or EMC other than the
liabilities in respect of their own assets and operations being cancelled;
- 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;
- The approval of the Proposed Transaction by the competition authorities
of the Republic of South Africa;
- All necessary consents, rulings and/or directives being obtained from the
Minister of the South African Department of Mineral Resources;
- First Uranium obtaining Franco Nevada (Barbados) Corporation`s consent
for the replacement of First Uranium by Gold One as guarantor for certain
obligations of EMC under an agreement previously concluded between EMC and
Franco Nevada (Barbados) Corporation;
- All necessary approvals being obtained from the ASX Limited, TSX
Incorporated, JSE Limited and any other regulatory body having jurisdiction
over the Proposed Transaction;
- Approval from the South African Reserve Bank.
(1) Based upon the exchange rate on the date the Letter Agreement from Gold
One was tabled: ZAR 7.71 : US$ 1
Gold One President and CEO Neal Froneman comments: "I am pleased that we have
been able to conclude the Acquisition Agreement in a timely and efficient
manner, allowing us to proceed with this transaction as quickly as possible. I
remain excited and highly confident that this acquisition will be
significantly value-enhancing for Gold One shareholders."
Overview of the Ezulwini Mine and Rationale for the Transaction
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 contains 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. Gold One will also consider a focused
underground development program to ensure sustainable underground mining
flexibility. Ezulwini represents an attractive economic proposition for Gold
One particularly in that it will allow seamless regional consolidation with
Gold One`s Cooke Operations. The combination of Ezulwini with the Cooke
Operations possible 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 through:
- 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;
- Sharing of 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 and flexibility by providing an alternative to
existing
toll treating arrangement;
- 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.
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 as:
- Ezulwini offers further tailings retreatment opportunities;
- Gold One will 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) 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
Johannesburg
2 April 2012
Transaction Sponsor and JSE SPONSOR
Macquarie First South Capital (Pty) Limited
For and on behalf of Gold One:
Corporate Advisor:
Qinisele Resources (Proprietary) Limited
Australian Corporate Advisor:
Hartleys Limited
South African Legal Advisor:
Edward Nathan Sonnenbergs
Australian Legal Counsel:
Ashurst Australia
Canadian Legal Counsel:
Stikeman Elliot
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 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.
No stock exchange, securities commission or other regulatory authority has
approved or disapproved the information contained herein.
Date: 02/04/2012 07:05:12 Produced by the JSE SENS Department.
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