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SXR
SXR
Uranium One - Results of feasibility study on the Modder East project of its
Aflease Gold subsidiary
SXR Uranium One Inc
Share code: SXR
Isin: CA87112P1062
26 Wellington Street East, Suite 820
Toronto, Ontario M5E 1S2
Trading Symbol: SXR - Toronto Stock Exchange, Johannesburg Stock Exchange
NEWS RELEASE
August 16, 2006 Toronto, Ontario
Uranium One Announces Results of Feasibility Study on the Modder East Project
of its Aflease Gold subsidiary
Toronto, Ontario and Johannesburg, South Africa - sxr Uranium One Inc.
("Uranium One") reports that Aflease Gold Limited ("Aflease Gold") has
announced the results of the feasibility study conducted by Turgis Consulting
(Pty) Ltd ("Turgis") and independently audited by SRK Consulting (South Africa)
(Pty) Ltd ("SRK") on the Modder East Gold Project ("Modder East") of its
approximately 75% owned Aflease Gold subsidiary. Modder East is located
approximately 30km east of Johannesburg, South Africa.
Highlights of the Modder East feasibility study include:
* The project is financially robust and technically viable
* The first phase of Modder East will target a Probable Reserve estimated at
1.07 million ounces of gold contained within 6.68 million tonnes of ore at
an average head grade of 5.00g/t
* The first gold pour is scheduled for Q3 2009
* Production at steady state (2010 to 2015) is expected to average
approximately 110,000 ounces of gold per annum
* Average cash operating cost is US$217/oz
* The first phase of the project has an operational life of 10 years
* As at June 1, 2006, the pre-finance, after-tax project cash flows yield an
IRR of 31% and an NPV at a discount rate of 0% of US$156.9 million and an
NPV at a discount rate of 8% of US$74.0 million
* Project payback from commencement of mine construction is estimated to be
4.5 years and is expected to be less than 2 years from the start of on-
reef development.
The Modder East project encompasses a shallow underground mine with a dedicated
gold treatment facility with a production capacity of 70,000 tonnes per month.
The mine is expected to deliver 6.68 million tonnes of ore to the plant over a
10 year period at an average mill head grade of 5.00g/t of gold, producing
approximately 948,290 ounces of gold during this period. The mine plan has been
developed by applying a one metre mining cut to all areas. Mining will take
place between 300 metres and 530 metres below surface.
The feasibility study has used a base case gold price of US$629/oz and an
exchange rate of US$1.00: ZAR6.585. The analysis has been completed in real
terms, and the valuation date is June 1, 2006.
In light of the positive results of the feasibility study, the Aflease Gold
board has approved the full implementation of the project.
Neal Froneman, CEO of Aflease Gold, commented: "The results of the feasibility
study have confirmed the high margin nature of Modder East. The initial phase
of construction is proceeding well and we are looking forward to bringing the
mine into production. This is a significant commitment as it will be the first
new gold mine in the East Rand in 28 years. We will also continue to delineate
additional Kimberley Reef resources in the project area for phase 2 with a view
to either extending the life of the mine or increasing gold production."
Modder East Project Overview
The Modder East Project is located approximately 30 km East of Johannesburg in
the Gauteng Province, South Africa. Aflease Gold will mine the Black Reef at a
depth of 300 metres below surface and the UK9a Kimberley Reef at depths of
between 300 metres and 530 metres below surface.
The company completed a pre-feasibility study in January 2004, which returned
favorable results. Additional exploration was carried out in the project area
in 2004 and 2005. The full feasibility study was completed on May 19, 2006 and
revised in June/July 2006.
Mineral Resources and Reserves
Aflease Gold carried out an extensive exploration program in the project area.
From this comprehensive sampling base, a Mineral Resource Estimate was prepared
by Peter Camden-Smith of Camden Geoserve and Charles Muller of Global Geo
Services (Pty) Ltd. Peter Camden-Smith has been involved in the Modder East
Project since 2001 and Charles Muller has been involved in the project since
2003. All resources were subsequently audited by SRK. The estimates were based
on a three dimensional block model with grades interpolated using geo-
statistical methods.
Aflease Gold published a revised Mineral Resource for the Modder East project
on February 13, 2006, declaring a gold resource of 2.01 million ounces of gold
in the indicated category and 1.02 million ounces of gold in the inferred
category. Table 1 below summarizes the previously released resource estimate by
category as audited by SRK. The Mineral Resources were determined using a gold
price of US$430/oz and an exchange rate of US$1.00: ZAR6.49.
Table 1 - SRK Audited Mineral Resource Estimate for Modder East (February 13,
2006)
MINERAL RESOURCES
Tonnage Cut-off Au Grade Contained
Grade Gold
(thousands) (cmg/t) (g/tonne) (koz)
Indicated
Black Reef (BPLZ) + 5,720 167 6.07 1,120
BF(1)
Channel Facies 15,200 379 1.32 650
Kimberley UK9a Reef 1,350 199 5.47 240
Total Measured & 22,270 2.79 2,010
Indicated Resources
Inferred
BPLZ + BF (1) 470 167 3.31 50
Kimberley UK9a Reef 2,500 199 5.00 400
Kimberley UK5a Reef 9,700 496 1.82 570
Total Inferred 12,670 2.50 1,020
(1) BPLZ - Buckshot Pyrite Leader Zone/BF-Blanket Facies
Notes:
1. The Mineral Resources have been reported in accordance with the
classification criteria of the South African Code for Reporting of Mineral
Resources and Mineral Reserves (the SAMREC Code).
2. The Mineral Resources were estimated by Mr. Charles Muller of Global Geo
Services (Pty) Ltd. and reported to a cut-off grade of 167 cmg/t (in the
case of the BPLZ and Blanket Facies), 379 cmg/t (in the case of the
Channel Facies, 199 cmg/t (in the case of the UK9a) and 496 cmg/t (in the
case of the UK5). The Resource was audited by Dr Mike Harley of SRK.
3. Mineral Resources are not Mineral Reserves and do not have demonstrated
economic viability.
4. The Indicated Resources detailed in Table 1 have been converted into a
Probable Reserve, as shown in Table 2, through a process of mine planning,
economic modeling and the application of appropriate modifying factors and
is reported as delivered to the plant.
Table 2 - SRK Audited Mineral Reserve Estimate for Modder East (June 1, 2006)
PROBABLE MINERAL RESERVES
Tonnage Au Grade Contained
Gold
(thousands) (g/t) (koz)
Probable
BPLZ Mining 5,150 5.28 890
Kimberley UK9a Reef 1,420 3.97 180
Total Reserves 6,680 5.00 1,070
Notes:
1. The Mineral Reserve was estimated by Andrew Pooley of Turgis and audited
by HG (Wally) Waldeck of SRK.
2. Tonnes and grade are stated on the basis of delivery to the plant.
3. Mineral Reserves are included in Mineral Resources
Reconciliation of Reserve Estimates
In its News Release of February 13, 2006, Aflease Gold had presented Probable
Mineral Reserves for the Modder East project of 10.1Mt at an average grade of
4.02g/t. The reduction in Mineral Reserves as presented in this News Release
is based on a different mining philosophy which incorporates greater confidence
in the geological block model, modifying factors used to convert Mineral
Resources to Mineral Reserves, the level of accuracy of the feasibility study
and engineering assumptions made. SRK is satisfied that this reduction in
Mineral Reserves, given the changed mining philosophy and greater confidence
associated with the feasibility study, is reasonable.
Mine Design
The reefs will be accessed by a decline from surface, developed into the
footwall of both horizons and will be developed using trackless drilling,
loading and hauling. Mine personnel will access the workings via a vertical
ventilation shaft. The mining method will be traditional South African narrow
reef breast mining with face cleaning using scraper winches. Thirty tonne haul
trucks will be used to transport ore, loaded from stope chutes, to a central
silo system. Dedicated fifty tonne haul trucks will transport the ore to
surface.
The gold plant planned for Modder East is based on a standard carbon-in-leach
gold recovery process. The plant is designed to treat 840,000 tonnes of ore per
annum, yielding approximately 110,000 oz of gold annually at steady state. The
planned metallurgical recoveries are 88% for the Black Reef (BPLZ facies) and
95% for the UK9a Reef.
Project Status
The Boards of Uranium One and of Aflease Gold decided to fast-track the project
and the initial stage of construction began on May 18, 2006. A budget of
US$3.04 million (ZAR20 million) was allocated to cover the following
activities:
- Site clearing and portal excavation
- Selection of basic services and surface infrastructure
- Acquisition of trackless equipment
- Selection and training of workers
The portal excavation and dam construction are well advanced and the areas for
the offices, workshops, stores and waste dump have been prepared. The trackless
equipment has been secured. The supply of water to the mine has been sourced
from the local municipality. The development team and associated support team
have been recruited and training is in progress.
The project is on schedule for the commencement of gold production in Q3 2009.
Operating Costs
The operating costs have been prepared using zero-based costing techniques
(i.e. without factoring-in historical costs) assuming reasonable consumable
consumption levels and are in January 1, 2006 money terms.
The average operating cost for the life of mine is US$30.82 per tonne of ore
milled in real terms including rehabilitation costs and excluding envisaged
royalties and tax, reflecting the low cost nature of this shallow mine. In line
with the company"s accounting policy all footwall development and associated
infrastructure has been capitalized at an amount of US$36.3 million. Conversion
of the capitalized development costs into an operating cost increases the
average life of mine cost to US$34.31 per tonne of ore milled, which is
reasonable when compared to other narrow reef operations.
Capital Costs
Capital costs have been estimated at the appropriate level with the back up of
budgetary quotes from major equipment suppliers. The capital estimate for the
plant is based on the use of new equipment. The capital costs were estimated in
South African Rand on January 1, 2006, and converted to US dollars at
US$1.00=ZAR6.585. The project construction capital expenditure totals US$58.5
million. Working capital comprising of pre-production costs and footwall
development is US$40.9 million. Contingencies catering for the construction
capital expenditure as well as the working capital expenditure total US$8.5
million. In addition, the ongoing capital costs for the life of mine have been
estimated at US$6.5 million. The data is shown in Tables 3 and 4 below:
Table 3: Modder East Project - capital expenditure estimates
Capital Item Units Project Ongoing Total
Capital Capital Capital
requirements
Surface engineering (US$"000) 15,155 626 15,781
Capital Development (US$"000) 34,885 1,441 36,327
Mining equipment (US$"000) 8,857 366 9,223
Replacement equip (US$"000) 0 2,743 2,743
Shaft sinking (US$"000) 9,037 373 9,410
Underground engineering (US$"000) 1,890 78 1,968
Process Plant (US$"000) 19,242 795 20,037
Tailings dam (US$"000) 2,565 0 2,565
Preproduction costs (US$"000) 5,984 0 5,984
Environmental (Initial Sum) (US$"000) 346 0 346
Design (US$"000) 1,422 0 1,422
Contingencies (US$"000) 8,461 53 8,513
Total Modder East (US$"000) 107,844 6,476 114,320
Table 4: Modder East Project - estimated closure costs
Activities Cost
provision
(US$"000s
as at 2006)
Operational costs per annum
Proposed operational budget from 2009 (environmental) 59
Annual provision for SLP initiatives 100
Ongoing capital costs
EMPR update, specialist studies and water use licence 137
application
Closure liability
Liability as determined by Study 1,950
SRK estimated additional liability (post closure monitoring) 296
Total estimated closure liability 2,246
Provision for closure at end of life of mine in Trust Fund 186
Outstanding provision to be funded over life of mine 2,060
Financial Evaluation
The project has been valued in real terms as at June 1, 2006. As at that date
the pre-finance after-tax cash flows yield an IRR of 31%. At a real discount
rate of 0% the project is estimated to yield an after-tax NPV of US$156.9
million and at a real discount rate of 8%, the project is estimated to yield an
after-tax NPV of US$74.0 million. Project payback from commencement of mine
construction is estimated to be 4.5 years and is expected to be less than 2
years from the start of on-reef development. Table 5 below summarizes the
results of the feasibility study:
Table 5: Modder East Project - nominal cash flow model
Financial Year Units Totals 2006 2007 2008 2009 2010 2011
(1)
Project Year /Averages 1 2 3 4 5 6
Tonnes Milled (kt) 6,680 0 0 36 491 767 845
Head Grade (g/t) 5.0 0.0 0.0 13.6 8.0 4.8 3.3
Metallurgical (%) 88% 0% 0% 0% 87% 87% 88%
Recovery
Recovered Gold (koz) 948 0 0 0 123 102 78
Gold Price (US$/oz) 721 629 642 654 667 681 694
Exchange Rate (ZAR:US$) 6.59 6.84 7.11 7.39 7.68 7.98
Sales Revenue (US$m) 596.5 - - - 77.5 64.5 49.3
Sales (US$m) 87.6 4.8 5.3 5.1
Escalation
Less Mineral (US$m) (31.2) (2.9) (2.6) (2.2)
Royalties
Attributable (US$m) 652.9 79.4 67.2 52.2
Revenue
Total Working (US$m) (256.7) - - (0.2)
Costs (21.5) (25.9) (26.2)
Mining (US$m) (139.4) - - - (9.4)
(14.8) (16.3)
Processing (US$m) (42.9) - - - (3.4) (4.7) (5.1)
Administration (US$m) (37.4) - - (0.2) (2.3) (4.0) (3.6)
(1)
Operating Cost (US$m) (35.0) - - - (0.9) (1.9) (2.6)
Escalation
Working (US$m) (2.1) - - - (5.5) (0.5) 1.3
Capital
Changes
Operating (US$m) 397.6 - - (0.2) 58.0 41.4 26.2
Profit
Tax Deductible (US$m) (121.0) (4.9)
Allowances (10.4) (21.6) (39.5) (15.6) (10.2)
Tax Liability (US$m) (88.9) - - - - - (4.7)
Capital (US$m) (121.0) (4.9)
Expenditure (10.4) (21.6) (39.5) (15.6) (10.2)
Project (US$m) (107.8) (9.1) (4.0)
(10.4) (21.2) (37.9) (14.4)
Ongoing (US$m) (6.5) - - - (0.3) (0.4) (0.4)
Capital (US$m) (6.7) - (0.4) (1.5) (0.9) (0.8) (0.5)
escalation
Final Net Free (US$m) 186.3 42.2 31.1 16.5
Cash - Nominal (10.4) (21.6) (39.7)
Final Net Free (US$m) 156.9 39.8 28.7 14.9
Cash - Real (10.4) (21.2) (38.2)
Cash Operating (US$/oz) 231 - - - 122 229 318
Costs - Real
Financial Year Units Totals 2012 2013 2014 2015 2016 2017
Project Year /Averages 7 8 9 10 11 12
Tonnes Milled (kt) 6,680 834 832 794 840 658 431
Head Grade (g/t) 5.0 4.9 5.6 6.0 4.5 3.7 4.1
Metallurgical (%) 88% 88% 89% 88% 88% 88% 91%
Recovery
Recovered Gold (koz) 948 112 133 138 107 69 52
Gold Price (US$/oz) 721 708 723 737 752 767 782
Exchange Rate (ZAR:US$) 8.29 8.62 8.96 9.31 9.67 10.05
Sales Revenue (US$m) 596.5 70.8 83.7 86.7 67.4 43.1 32.6
Sales (US$m) 87.6 8.9 12.4 14.9 13.2 9.5 7.9
Escalation
Less Mineral (US$m) (31.2) (3.4) (4.3) (4.9) (4.1) (2.8) (2.3)
Royalties
Attributable (US$m) 652.9 76.3 91.8 96.7 76.5 49.8 38.2
Revenue
Total Working (US$m) (256.7)
Costs (29.8) (29.6) (29.1) (28.1) (27.4) (24.0)
Mining (US$m) (139.4)
(16.1) (16.1) (16.1) (16.3) (16.0) (12.6)
Processing (US$m) (42.9) (4.8) (4.9) (4.9) (5.0) (4.9) (3.8)
Administration (US$m) (37.4) (3.9) (3.6) (3.4) (3.7) (3.4) (3.4)
(1)
Operating Cost (US$m) (35.0) (3.1) (3.7) (4.2) (4.9) (5.3) (4.8)
Escalation
Working (US$m) (2.1) (1.9) (1.3) (0.4) 1.7 2.2 0.6
Capital
Changes
Operating (US$m) 397.6 46.6 62.4 67.8 48.6 22.5 14.4
Profit
Tax Deductible (US$m) (121.0) (6.4) (5.5) (3.4) (1.1) (1.1) (1.0)
Allowances
Tax Liability (US$m) (88.9) (6.9) (4.1)
(13.3) (19.2) (21.9) (16.0)
Capital (US$m) (121.0) (6.4) (5.5) (3.4) (1.1) (1.1) (1.0)
Expenditure
Project (US$m) (107.8) (4.0) (4.3) (0.9) (0.5) (0.5) (0.5)
Ongoing (US$m) (6.5) (1.7) (0.4) (1.9) (0.4) (0.4) (0.4)
Capital (US$m) (6.7) (0.7) (0.7) (0.5) (0.2) (0.2) (0.2)
escalation
Final Net Free (US$m) 186.3 26.7 37.5 42.4 31.3 14.3 9.1
Cash - Nominal
Final Net Free (US$m) 156.9 23.7 32.7 36.2 26.2 11.8 7.3
Cash - Real
Cash Operating (US$/oz) 231 221 185 177 233 354 382
Costs - Real
The administration cost includes a provision for separation benefits during the
life of mine of US$13 million, which should be excluded from the calculation of
unit operating cost. The cash operating costs would be US$217 per ounce
excluding the separation benefits of US$13 million.
The numbers in the above table have been rounded, and any resulting
discrepancies should not be regarded as material.
Sensitivity Analysis
The following tables show the NPV of the real cash flows as derived from the
financial model for the project. The tables illustrate that the project is
neither capital nor operating cost sensitive. In summary they include the
following:
- The variation in NPV with discount factors (Table 6)
- The variation in NPV based on single parameter sensitivities (Table 7).
The sensitivity of the project to changes in gold price or head grade can
be seen in the variation of revenue. The sensitivity to variations in
operating cost and capital expenditure is also presented
- The variation in NPV based on twin (revenue and operating expenditure)
sensitivities (Table 8)
- The variation in NPV based on twin (gold price and exchange rate)
sensitivities (Table 9).
Table 6: Modder East Project - variation of Real NPV with discount factors
Discount NPV (US$m)
Factor
Valuation Basis Alternative Scenarios
(%) US$629/oz Au US$500/oz Au US$629/oz Au US$758/oz Au
ZAR6.585=US$1.00 ZAR7.00=US$1.00 ZAR7.00=US$1.00 ZAR7.00=US$1.00
0% 156.9 92.9 170.3 246.2
2% 130.2 75.1 142.2 207.8
4% 108.0 60.2 118.8 175.8
6% 89.5 47.9 99.3 149.1
8% 74.0 37.6 82.9 126.6
10% 61.0 28.9 69.1 107.6
12% 49.9 21.7 57.4 91.6
Table 7: Modder East Project - Real NPV, single parameter sensitivity
Sensitivity Range - -30% -20% -10% 0% 10% 20% 30%
Revenue
Sensitivity Range - -15% -10% -5% 0% 5% 10% 15%
Working Costs
Sensitivity Range - -15% -10% -5% 0% 5% 10% 15%
Capital
Currency (US$m) (US$m) (US$m) (US$m) (US$m) (US$m) (US$m)
Variation in NPV at 0%
DCF
Revenue 37.7 77.8 117.5 156.9 196.7 235.3 273.9
Total Working Costs 204.8 189.2 172.5 156.9 141.3 124.9 109.1
Capital 178.9 172.0 165.1 156.9 149.9 141.9 134.9
Variation in NPV at 8%
DCF
Revenue 3.7 27.6 51.0 74.0 97.2 119.3 141.5
Total Working Costs 100.8 92.2 82.7 74.0 65.3 56.1 47.2
Capital 92.8 86.9 80.9 74.0 67.9 61.1 54.7
Table 8: Modder East Project - Real NPV sensitivity, varying twin parameter at
8% discount
NPV (US$m) Revenue Sensitivity
-30% -20% -10% 0% 10% 20% 30%
-15% 18.0 41.5 64.7 87.3 110.1 132.2 154.4
-10% 13.5 37.1 60.3 82.7 105.8 127.9 150.1
-5% 8.9 32.7 55.4 78.4 101.5 123.6 145.8
TWC Sensitivity 0% 3.7 27.6 51.0 74.0 97.2 119.3 141.5
5% (1.2) 23.1 46.6 69.7 92.9 115.0 137.2
10% (6.2) 18.6 42.1 65.3 88.6 110.7 132.9
15% (11.3) 13.9 37.7 61.0 83.9 106.4 128.6
Table 9: Modder East - Real NPV sensitivity, varying twin parameter at 8%
discount
NPV (US$m) Gold Price Sensitivity
503 535 566 598 629
-20.0% -15.0% -10.0% -5.0% 0.0%
5.597 -15.0% 2.8 14.8 25.9 37.6 48.5
Exchange
Rate
Sensitivity
5.927 -10.0% 13.3 24.4 36.1 47.0 57.9
6.256 -5.0% 21.9 33.6 44.4 55.3 66.7
6.585 0.0% 29.9 41.1 52.0 63.3 74.0
6.914 5.0% 37.0 47.9 59.2 70.0 80.9
7.244 10.0% 43.2 54.6 65.3 76.1 87.4
7.573 15.0% 48.9 60.1 70.8 82.2 92.8
NPV (US$m) Gold Price Sensitivity
660 692 723 755
5.0% 10.0% 15.0% 20.0%
5.597 -15.0% 59.4 70.9 81.6 92.3
Exchange
Rate
Sensitivity
5.927 -10.0% 69.3 80.0 90.7 102.3
6.256 -5.0% 77.4 88.3 99.7 110.3
6.585 0.0% 85.0 96.2 106.8 117.4
6.914 5.0% 92.1 102.7 113.3 123.9
7.244 10.0% 98.0 108.6 119.2 129.8
7.573 15.0% 103.4 114.0 124.6 135.2
Mining Rights
Aflease Gold is in possession of an old order mining right (mining licence
ML15/2004), which is valid until April 29, 2009. Aflease Gold is compiling an
application for the conversion of its old order mining right to a new order
mining right in terms of the Minerals and Petroleum Resources Development Act
No 28 of 2002 ("MPRDA") and expects to submit that application before the end
of 2006. It is expected that the new order mining right will be granted within
the available time period.
A temporary water use licence has been approved for the development of the
portal. An application for the required permanent water use licence will be
submitted before the temporary water use licence expires.
The surface rights for the project have been secured and accommodate the Modder
East project as contemplated in the feasibility study.
Qualified Person
HG (Wally) Waldeck, a Partner with SRK, is the Qualified Person for the
purposes of NI 43-101 and has audited all information relating to the
feasibility study and has reviewed the contents of this news release.
About sxr Uranium One
sxr Uranium One Inc. is a Canadian uranium and gold resource company with a
primary listing on the Toronto Stock Exchange and a secondary listing on the
Johannesburg Stock Exchange. The Corporation owns the Dominion Reefs Uranium
Mine in South Africa and the Honeymoon Uranium Project in South Australia, as
well as a number of exploration projects. The Corporation holds an approximate
75% interest in Aflease Gold Limited, which owns the Modder East Gold Project
in South Africa. Through a joint venture with Pitchstone Exploration Ltd., the
Corporation is also engaged in uranium exploration activities in the Athabasca
Basin of Saskatchewan.
About Aflease Gold
Aflease Gold Limited was formed on January 23, 2006 through the reverse
takeover of Sub Nigel Gold Mining Company Ltd. by New Kleinfontein Mining
Company Ltd. a wholly owned subsidiary of Aflease Gold and Uranium Resources
Ltd. The company is listed on the Johannesburg Stock Exchange and is owned as
to approximately 75% by sxr Uranium One Inc.
For further information please contact:
Neal Froneman Chris Sattler Robert van Niekerk
Chief Executive Officer Vice President, Investor Executive Vice President:
Tel: + 27 11 482 3605 Relations Aflease Gold
Tel: +1 416 350 3657 Tel: +27 11 814 4290
Forward-looking statements: Certain of the statements made herein, including
any information as to the Corporation"s future financial or operating
performance, may be forward-looking and subject to important risk factors and
uncertainties, many of which are beyond the Corporation"s ability to control or
predict. Forward-looking statements are necessarily based on a number of
estimates and assumptions that are inherently subject to significant business,
economic and competitive uncertainties and contingencies. Known and unknown
factors could cause actual results to differ materially from those projected in
the forward-looking statements. Such factors include, among others: gold price
volatility; impact of any hedging activities, including margin limits and
margin calls; discrepancies between actual and estimated production, between
actual and estimated reserves and resources and between actual and estimated
metallurgical recoveries; changes in national and local government legislation,
taxation, controls, regulations and political or economic developments in South
Africa or other countries in which the Corporation does or may carry on
business in the future; risks of sovereign investment; the speculative nature
of gold exploration and development, including the risks of obtaining necessary
licenses and permits; dilution; competition; loss of key employees; additional
funding requirements; and defective title to mineral claims or property. In
addition, there are risks and hazards associated with the business of gold
exploration, development and mining, including, among others, environmental
hazards, industrial accidents, unusual or unexpected formations, pressures,
cave-ins, flooding and gold bullion losses (and the risk of inadequate
insurance or inability to obtain insurance, to cover these risks).
Accordingly, readers should not place undue reliance on forward-looking
statements. The Corporation undertakes no obligation to update publicly or
release any revisions to forward-looking statements to reflect events or
circumstances after the date of this document or to reflect the occurrence of
unanticipated events. Investors are advised to refer to competent persons
reports on the Corporation"s material properties for detailed information with
respect to such properties, which information is subject to the qualifications
and notes set forth therein. This presentation uses the terms "indicated"and
"inferred"resources as defined in accordance with the SAMREC Code. United
States investors are advised that while these terms are recognized and required
by South African regulations, the SEC does not recognize them. Investors are
cautioned not to assume that all or any part of the mineral deposits in these
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 and it cannot be assumed that all or any part of
an inferred mineral resource will be ever be upgraded to a higher category.
Investors are cautioned not to assume that all or any part of an inferred
resource exists or is economically or legally mineable. Mineral resources are
not mineral reserves and do not have demonstrated economic viability.
Scientific and technical information contained herein has been reviewed by Mr.
H.G. (Wally) Waldeck (PrEng (ECSA), FSAIMM, AMAMMSA, BSc(Eng), (MBA), Partner
and Principal Mining Engineer with SRK.
Date: 16/08/2006 02:00:40 PM Produced by the JSE SENS Department
