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AFO
AFO
Aflease Gold - Results of feasibility study on its Modder East Project
Aflease Gold Limited
Share code: AFO
ISIN: ZAE000075867
News release
August 16, 2006
Aflease Gold Announces Results of Feasibility Study on its Modder East
Project
Johannesburg, South Africa - Aflease Gold Limited ("Aflease Gold") today
announced the results of the Modder East Gold Project ("Modder East")
feasibility study conducted by Turgis Consulting (Pty) Ltd.
("Turgis") and independently audited by SRK Consulting South Africa
(Pty) Ltd. ("SRK"). Modder East is located in the eastern section of
the Witwatersrand gold basin 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 per ounce
* 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 ZAR1.026 million (US$156.9 million) and an NPV at a
discount rate of 8% of ZAR484 million (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 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 Contained
Grade Grade Gold
(thousands) (cmg/t) (g/tonne) (koz)
Indicated
Black Reef (BPLZ) + BF(1) 5,720 167 6.07 1,120
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 3.31 050
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.
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 Contained
Grade 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 Board of Aflease Gold decided to fast-track the project and the
initial stage of construction began on May 18, 2006. A budget
of ZAR20 million (US$3.04 million) was allocated to cover the
following activities:
* Site clearing and portal excavation
* Selection of basic services and surface infrastructure
* Acquiring 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 ZAR202.98 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
ZAR239.2 million. Conversion of the capitalized development
costs into an operating cost increases the average life of
mine cost to ZAR225.93 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 ZAR385.3 million. Working capital comprising of pre-
production costs and footwall development is ZAR269.1 million.
Contingencies catering for the construction capital
expenditure as well as the working capital expenditure total
ZAR55.7 million. In addition, the ongoing capital costs for
the life of mine have been estimated at ZAR42.6 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
requirement
s
Surface engineering (ZAR"000) 99,795 4,124 103,919
Capital Development (ZAR"000) 229,719 9,492 239,211
Mining equipment (ZAR"000) 58,325 2,410 60,735
Replacement equip (ZAR"000) 18,066 18,066
Shaft sinking (ZAR"000) 59,508 2,459 61,967
Underground engineering (ZAR"000) 12,444 514 12,958
Process Plant (ZAR"000) 126,711 5,236 131,947
Tailings dam (ZAR"000) 16,888 16,888
Preproduction costs (ZAR"000) 39,406 39,406
Environmental (Initial Sum) (ZAR"000) 2,279 2,279
Design (ZAR"000) 9,362 9,362
Contingencies (ZAR"000) 55,714 347 56,061
Total Modder East (ZAR"000) 710,152 42,647 752,799
Table 4: Modder East Project - estimated closure costs
Activities Cost
Provision
(ZAR"000s
as at 2006)
Operational costs per annum
Proposed operational budget 390
from 2009 (environmental)
Annual provision for SLP initiatives 658
Ongoing capital costs
EMPR update, specialist studies 900
and water use licence application
Closure liability
Liability as determined by Study 12,842
SRK estimated additional liability 1,950
(post closure monitoring)
Total estimated closure liability 14,792
Provision for closure at end of 1,228
life of mine in Trust Fund
Outstanding provision to be 13,564
funded over life of mine
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 ZAR1.026 million and at a real
discount rate of 8%, the project is estimated to yield an
after-tax NPV of ZAR484 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
(1)
Project Year /Averages 1 2 3 4
Tonnes Milled (kt) 6,680 0 0 36 491
Head Grade (g/t) 5.0 0.0 0.0 13.6 8.0
Metallurgical (%) 88% 0% 0% 0% 87%
Recovery
Recovered (koz) 948 0 0 0 123
Gold
Gold Price (US$/oz) 721 629 642 654 667
Exchange Rate (ZAR:US$) 6.59 6.84 7.11 7.39
Sales Revenue (ZARm) 3,927.8 - - - 510.6
Sales Escalation (ZARm) 1,993.0 97.5
Less Mineral (ZARm) (273.7) - - - (21.7)
Royalties
Attributable (ZARm) 5647.1 586.4
Revenue
Total Working (ZARm) (2,253.7) - - (1.5)
Costs (158.9)
Mining (ZARm) (918.0) - - - (61.7)
Processing (ZARm) (282.4) - - - (22.2)
Administration (1) (ZARm) (246.1) - - (1.5) (15.2)
Operating Cost (ZARm) (805.1) - - - (18.9)
Escalation
Working Capital (ZARm) (2.1) - - - (40.9)
Changes
Operating Profit (ZARm) 3,393.4 - - (1.7) 427.6
Tax Deductible (ZARm) (894.7) (68.5)
Allowances (147.7) (280.6) (115.3)
Tax Liability (ZARm) (808.9) - - - -
Capital (ZARm) (894.7) (68.5)
Expenditure (147.7) (280.6) (115.3)
Project (ZARm) (710.2) (68.5) (95.1)
(139.4) (249.8)
Ongoing (ZARm) (42.6) - - - (1.7)
Capital (ZAR/oz) (141.9) - (8.4) (30.9) (18.5)
escalation
Final Net Free Cash (ZARm) 1,689.8 (68.5) 312.2
- Nominal (147.7) (282.3)
Final Net Free (ZARm) 1,025.8 (68.5) 262.1
Cash- Real (139.4) (251.3)
Cash Operating (ZARm) 1,524 - - - 804
Costs- Real
Financial Year Units Totals 2010 2011 2012 2013
Project Year /Averages 5 6 7 8
Tonnes Milled (kt) 6,680 767 845 834 832
Head Grade (g/t) 5.0 4.8 3.3 4.9 5.6
Metallurgical (%) 88% 87% 88% 88% 89%
Recovery
Recovered (koz) 948 102 78 112 133
Gold
Gold Price (US$/oz) 721 681 694 708 723
Exchange Rate (ZAR:US$) 7.68 7.98 8.29 8.62
Sales Revenue (ZARm) 3,927.8 424.5 324.7 465.9 551.0
Sales (ZARm) 1,993.0 111.4 109.8 195.0 277.5
Escalation
Less Mineral (ZARm) (273.7) (20.3) (17.4) (28.1) (37.4)
Royalties
Attributable (ZARm) 5647.1 515.7 417.1 632.8 791.2
Revenue
Total Working (ZARm) (2,253.7) (186.2) (248.5)
Costs (210.0) (256.0)
Mining (ZARm) (918.0) (97.2) (105.9)
(107.3) (106.0)
Processing (ZARm) (282.4) (31.2) (33.3) (31.8) (32.6)
Administration (ZARm) (246.1) (26.0) (23.4) (25.7) (23.4)
(1)
Operating Cost (ZARm) (805.1) (40.5) (55.5) (68.4) (81.6)
Escalation
Working Capital (ZARm) (2.1) 8.7 9.6 (16.8) (12.4)
Changes
Operating (ZARm) 3,393.4 329.4 207.1 384.3 535.1
Profit
Tax Deductible (ZARm) (894.7) (78.6) (39.2) (53.3) (47.2)
Allowances
Tax Liability (ZARm) (808.9) - (54.1) (110.2)
(165.2)
Capital (ZARm) (894.7) (78.6) (39.2) (53.3) (47.2)
Expenditure
Project (ZARm) (710.2) (59.6) (26.4) (26.2) (28.5)
Ongoing (ZARm) (42.6) (2.7) (2.9) (11.4) (2.9)
Capital (ZAR/oz) (141.9) (16.3) (9.9) (15.7) (15.8)
escalation
Final Net Free (ZARm) 1,689.8 250.8 113.8 220.7 322.7
Cash - Nominal
Final Net Free (ZARm) 1,025.8 198.7 85.0 155.6 214.6
Cash - Real
Cash Operating (ZARm) 1,524 1,506 2,093 1,452 1,218
Costs - Real
Financial Year Units Totals 2014 2015 2016 2017
Project Year /Averages 9 10 11 12
Tonnes Milled (kt) 6,680 794 840 658 431
Head Grade (g/t) 5.0 6.0 4.5 3.7 4.1
Metallurgical (%) 88% 88% 88% 88% 91%
Recovery
Recovered (koz) 948 138 107 69 52
Gold
Gold Price (US$/oz) 721 737 752 767 782
Exchange Rate (ZAR:US$) 8.96 9.31 9.67 10.05
Sales Revenue (ZARm) 3,927.8 570.9 444.0 284.0 214.5
Sales (ZARm) 1,993.0 339.0 306.1 224.6 192.7
Escalation
Less Mineral (ZARm) (273.7) (43.5) (23.2)
Royalties (38.0) (27.3)
Attributable (ZARm) 5647.1 866.3 712.1 481.2 384.0
Revenue
Total Working (ZARm) (2,253.7) (262.0) (241.7)
Costs (263.4 (266.8
) )
Mining (ZARm) (918.0) (105.9) (83.2)
(107.1 (105.2
) )
Processing (ZARm) (282.4) (32.5) (25.0)
(32.7) (32.4)
Administration (ZARm) (246.1) (22.7) (22.2)
(1) (24.4) (22.3)
Operating Cost (ZARm) (805.1) (95.6) (117.1)
Escalation (113.2 (126.5
) )
Working Capital (ZARm) (2.1) (5.4) 14.0 19.5 5.7
Changes
Operating (ZARm) 3,393.4 604.3 448.7 214.4 142.3
Profit
Tax Deductible (ZARm) (894.7) (30.1) (10.4)
Allowances (10.5) (10.9)
Tax Liability (ZARm) (808.9) (195.6) (41.3)
(148.3 (65.9)
)
Capital (ZARm) (894.7) (30.1) (10.4)
Expenditure (10.5) (10.9)
Project (ZARm) (710.2) (6.1) (3.2) (3.2) (3.2)
Ongoing (ZARm) (42.6) (12.8) (3.0) (2.9) (2.3)
Capital (ZAR/oz) (141.9) (11.2) (4.3) (4.8) (4.9)
escalation
Final Net Free (ZARm) 1,689.8 378.6 289.9 137.6 90.6
Cash - Nominal
Final Net Free (ZARm) 1,025.8 237.5 171.6 76.9 47.7
Cash - Real
Cash Operating (ZARm) 1,524 1,168 1,532 2,332 2,516
Costs - Real
The numbers in the above table have been rounded, and any resulting
discrepancies should not be regarded as material.
1 Includes a provision for separation benefits during the LoM of
R83million, which should be excluded from the calculation of
unit operating cost.
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 Factor NPV (ZARm)
Valuation Alternative Scenarios
Basis
(%) US$629/oz Au US$500/oz Au US$629/oz Au US$758/oz Au
ZAR6.585 ZAR7.00 ZAR7.00 ZAR7.00
=US$1.00 =US$1.00 =US$1.00 =US$1.00
0% 1,025.8 637.8 1,182.0 1,711.3
2% 851.4 514.6 986.5 1,443.9
4% 706.4 412.5 823.9 1,221.3
6% 585.4 327.6 688.1 1,035.3
8% 483.9 256.6 574.2 878.9
10% 398.5 197.2 478.2 746.9
12% 326.4 147.2 397.0 635.1
Table 7: Modder East Project - Real NPV, single parameter sensitivity
Sensitivity Range -30% -20% -10% 0%
- Revenue
Sensitivity Range -15% -10% -5% 0%
- Working Costs
Sensitivity Range -15% -10% -5% 0%
- Capital
Currency ZARm) ZARm) ZARm) ZARm)
Variation in
NPV at 0% DCF
Revenue 237.2 504.5 766.3 1,025.8
Total Working Costs 1,336.2 1,233.8 1,131.4 1,025.8
Capital 1,170.9 1,123.6 1,076.3 1,025.8
Variation in
NPV at 8% DCF
Revenue 19.6 178.4 332.7 483.9
Total Working Costs 655.9 599.3 542.7 483.9
Capital 606.8 566.5 526.3 483.9
Sensitivity Range 10% 20% 30%
- Revenue
Sensitivity Range 5% 10% 15%
- Working Costs
Sensitivity Range 5% 10% 15%
- Capital
Currency ZARm) ZARm) (ZARm)
Variation in
NPV at 0% DCF
Revenue 1,282.9 1,536.8 1,790.8
Total Working Costs 918.4 815.4 709.3
Capital 972.9 924.5 869.5
Variation in
NPV at 8% DCF
Revenue 632.1 778.2 924.2
Total Working Costs 423.5 366.0 306.5
Capital 439.0 397.0 350.4
Table 8: Modder East Project - Real NPV sensitivity, varying twin
parameter at 8% discount
NPV (ZARm) Revenue Sensitivity
-30% -20% -10% 0%
-15% 111.2 266.6 418.9 571.0
-10% 81.0 237.2 390.2 542.7
-5% 50.7 207.8 361.4 514.4
TWC 0% 19.6 178.4 332.7 483.9
Sensitivity
5% (12.5) 149.0 300.6 452.3
10% (49.0) 115.3 271.0 423.5
15% (83.4) 83.9 241.6 394.8
NPV (ZARm) Revenue Sensitivity
10% 20% 30%
-15% 717.0 863.1 1,009.1
-10% 688.7 834.8 980.8
-5% 660.4 806.5 952.5
TWC Sensitivity 0% 632.1 778.2 924.2
5% 603.8 749.8 895.9
10% 575.5 721.5 867.6
15% 547.2 693.2 839.3
Table 9: Modder East - Real NPV sensitivity, varying twin parameter at
8% discount
NPV (ZARm) Gold Price Sensitivity
503 535 566 598 629
-20.0% -15.0% -10.0% -5.0% 0.0%
5.597 -15.0% 9.8 73.9 140.0 202.2 263.9
Exchange
Rate
Sensitivity
5.927 -10.0% 70.2 140.0 205.9 271.1 339.0
6.256 -5.0% 131.1 202.2 271.1 342.6 410.0
6.585 0.0% 191.4 263.9 339.0 410.0 483.9
6.914 5.0% 249.4 328.4 402.9 479.9 556.0
7.244 10.0% 308.3 388.7 467.8 549.0 625.9
7.573 15.0% 367.4 449.1 535.0 615.4 695.8
NPV (ZARm) Gold Price Sensitivity
660 692 723 755
5.0% 10.0% 15.0% 20.0%
5.597 -15.0% 328.4 388.7 449.1 514.1
Exchange
Rate
Sensitivity
5.927 -10.0% 402.9 467.8 535.0 597.9
6.256 -5.0% 479.9 549.0 615.4 681.8
6.585 0.0% 556.0 625.9 695.8 765.6
6.914 5.0% 629.4 702.8 776.1 849.5
7.244 10.0% 702.8 779.6 856.5 933.4
7.573 15.0% 776.1 856.5 936.9 1,017.2
Inferred Resources in LoM Plan
It is common in the normal practice of mining that certain blocks of
ground classified as Inferred Resources may be mined along
with reserve blocks to maintain continuity in mining and
mining layouts. In the life of mine plan developed in the
Feasibility Study, some 0.46 million tonnes of Inferred
Resources were included in the mine plan. The effect of this
is to increase the NPV at a real discount rate of 8% to ZAR539
million, an increase of ZAR55 million.
Mining Rights
Aflease Gold is in possession of a used 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 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 JSE Ltd and is owned as to approximately 75% by sxr
Uranium One Inc.
For further information please contact:
Neal Froneman Robert van Niekerk
Chief Executive Officer COO
+27 11 482 3605 +27 11 482 3605
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 02:00:20 PM Produced by the JSE SENS Department
