| Fri 2 Feb 2007, 13:30 | | AFO - Aflease Gold - Provides Update on Operations |
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AFO
AFO
AFO - Aflease Gold - Provides Update on Operations and Management Changes
AFLEASE GOLD LIMITED
(Formerly Sub Nigel Gold Mining Company Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1984/006179/06)
Share Code: AFO & ISIN Code: ZAE000075867
("Aflease Gold")
Aflease Gold Limited
PO Box 262, Dunnottar
Gauteng 1590, South Africa
Trading Symbol: AFO - JSE Ltd (The Johannesburg stock exchange)
NEWS RELEASE
February 2, 2007
Johannesburg, Gauteng
Aflease Gold Provides Update on Operations and Management Changes
Johannesburg, South Africa - Aflease Gold Limited ("Aflease Gold") announced
today that Norman Schwab has been appointed Acting Chief Operating Officer
following the appointment of Robert van Niekerk as Executive Vice President,
Africa and Europe, at sxr Uranium One Inc.
Norman was previously Vice President, Mining and Projects, at Aflease Gold and
has over 23 years of mining experience encompassing both small and large
underground mines, where he oversaw activities ranging from exploration and
project work through to operation optimisation. Norman`s experience covers
hydrothermal vein mining through to fully mechanised massive mining methods.
Norman`s key project was the Target Gold Mine, where he worked from 2000 to
2004, rising to the position of General Manager. His work there encompassed all
the expertise required for mine design, systems integration, project
implementation and business management and optimisation.
Modder East (Phase I)
Aflease Gold is developing its Modder East Gold Project, which is a shallow
underground gold deposit located approximately 30 kilometres east of
Johannesburg, South Africa. Implementation of the Project commenced on May 18,
2006 and has advanced significantly with the entire mine infrastructure required
for development operations in place.
The portal of the decline was completed during the third quarter of 2006,
ensuring that the 40 metre deep mine entrance was completed before commencement
of the rainy season. Trackless decline development was initiated from the base
of the portal excavation and has advanced a total of 590 metres to date.
An amended environmental management program was completed and submitted to the
South African regulatory authorities in Q4 2006. The amendments reflect the
significant increases in the scope of the Project from the originally approved
environmental management program, as well as the conversion of the project`s
existing "old order" mining right to a "new order" mining right.
The Modder East Gold Project is expected to be completed on schedule, with the
first gold pour in the third quarter of 2009. N M Rothschild & Sons has been
appointed as exclusive financial advisor to Aflease Gold with respect to
securing approximately R300 million (approximately US$41 million) in project
finance to further fund development activities at Modder East.
Modder East (Phase II)
The revised reserve statement for Modder East announced in December 2006 shows a
reserve tonnage of 7.69Mt, grading 5.54g/t for 1.37 million contained ounces of
gold in the probable category. This represents a 28% increase in probable gold
reserves relative to the reserve estimate contained in the independent technical
report on the Modder East Gold Project prepared by SRK Consulting in August 2006
(utilizing the same cut-off grades, gold price (US$430/oz) and exchange rate
(US$1:R6.49)).
In addition, the revised statement shows a resource tonnage of 22.57Mt grading
3.31g/t for 2.40 million contained ounces of gold in the indicated category (a
19% increase from the 2.01 million ounces reported previously) and 13.32Mt
grading 2.31g/t for 0.99 million contained ounces of gold in the inferred
category (a 3% decrease from the 1.02 million ounces reported previously). The
indicated resource tonnage at Modder East has remained essentially unchanged
while the average grade has increased by 19% (from 2.79g/t to 3.31g/t).
In light of the increase in reserves at the Project, the August 2006 feasibility
study is currently being updated, with a view to determining the new value of
the Project. The study is being updated based on a significantly increased
production rate of approximately 100,000 tonnes per month and/or an extended
life of mine, with a minimal increase in capital expenditure and a significant
decrease in unit operating costs. The effect on permitting and environmental
issues is not anticipated to be significant. In addition, the access decline
will not require any alterations and only require additional trucks to transport
the increased production.
Ongoing exploration at Modder East during 2007 will test for extensions to the
BPLZ and UK9A orebodies, with a view to delineating additional increases in the
resource base. Should this year`s drilling program return positive results, the
feasibility study may again be revised in Q1 2008.
Sub Nigel
The Sub Nigel Gold Project is located approximately 35 kilometres east-southeast
of Johannesburg. The Project conforms to the profile of the asset base
assembled by Aflease Gold, namely assets which are shallow, high margin and low
technical risk.
In December 2006, Aflease Gold announced a revised resource estimate for the
Nigel Reef at Sub Nigel of 1.539Kt grading 4.14 g/t for 205,000 contained ounces
of gold in the indicated category and 139Kt grading 2.99 g/t for 13,000
contained ounces of gold in the inferred category. In light of the revised
estimate, Aflease Gold has commenced a pre-feasibility study on Sub Nigel, which
is expected to be completed during the first quarter of 2007. The study
considers a project with an independent metallurgical processing facility,
utilizing the current infrastructure at Sub Nigel (which is in excellent
condition) with access to stoping areas from existing development. Various
options are being evaluated in selecting the optimum tailings facility, with
three potential areas having been identified.
The Sub Nigel exploration program is focused on three targets, namely the Nigel
Reef, the Main Reef on Spaarwater mine and the Erosion Channel located along the
boundary between the two properties. Exploration programs, designed to bring
all three targets into production (in 2007, 2008 and 2009, respectively) are
currently underway.
Other Exploration Activities
The Ventersdorp asset is being modelled in three dimensions to assist with the
structural interpretation of the `A` Reef and facilitate drillhole placement.
Drilling will commence at Ventersburg in April 2007. Assay and mining layout
data of the New Kleinfontein/Turnbridge and Holfontein assets are being captured
digitally and the properties are being re-evaluated. The Etendeka stream
sediment data has been interpreted. Anomalous gold values obtained during the
survey pointed to a number of potentially mineralised areas. The values are
being integrated with geophysical data and target areas are being prioritised.
Permitting
The application for the Sub Nigel 8 prospecting right was submitted to the
Department of Minerals and Energy (DME) in August 2006. The processing of the
prospecting right by the DME is expected to be finalised by the end of Q3 2007.
The Ventersburg prospecting right in the Free State was executed on November 15
2006. Consequently, exploration activities at Ventersburg have commenced. With
the exception of the Sub Nigel 8 application, all prospecting rights applied for
have been awarded.
Trinity Share Swap
On June 23, 2006 Aflease Gold concluded a share swap agreement with Trinity
Asset Management (Proprietary) Limited and Trinity Holdings (Proprietary)
Limited (collectively, "Trinity"). Under this agreement, Aflease Gold will
acquire from Trinity not less than 7,500,000 and not more than 13,000,000
ordinary shares of Randgold and Exploration Limited ("Randgold"), in exchange
for Aflease Gold shares. This agreement was subject to a number of conditions
precedent, including the settlement of claims between Randgold and JCI in a fair
and equitable manner. The share swap will proceed once the JCI and Randgold
settlement has been reached.
Black Economic Empowerment
On August 22, 2006 Aflease Gold announced the conclusion of empowerment
transactions with two BEE consortia covering the Corporation`s South African
assets. These follow the model of the BEE transaction initiated by the
Company`s major shareholder, sxr Uranium One, at its Dominion Uranium Project.
Under the terms of the agreement, the empowerment consortia will acquire 26% of
the South African assets through a deferred payment agreement, which will
require them to pay market value for their share of the Company`s gold projects
at the time of each instalment. The composition of each consortium is as
follows: 30% held by a workers` trust, 30% by a community trust and the
remaining 40% being held by a series of entrepreneurial groupings.
About Aflease Gold
Aflease Gold is a South African gold resource company listed on the JSE Limited
(the Johannesburg stock exchange). The Company owns the Modder East Gold
Project, currently under construction, as well as the Sub Nigel, New
Kleinfontein, Turnbridge and the Holfontein Gold Projects, all on the East Rand;
the Ventersburg Gold Project in the Free State gold field; and the Etendeka Gold
Project in Namibia. Aflease Gold was formed in January 2006 through the reverse
takeover of Sub Nigel Gold Mining Company by New Kleinfontein Mining Company, a
wholly-owned subsidiary of sxr Uranium One Inc. The Company is currently owned
as to approximately 71.4% by sxr Uranium One and has a market capitalization in
excess of R1.4billion.
For further information, please contact:
Neal Froneman Norman Schwab
Chief Executive Officer Acting Chief Operating Officer
Aflease Gold Limited Aflease Gold Limited
Tel +27 11 482-3605 Tel + 27 11 814-4290
Cautionary Statement
This News 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 Aflease Gold are forward-looking statements (or
forward-looking information) that involve various risks and uncertainties. There
can be no assurance that such statements will prove to be accurate and actual
results and future events could differ materially from those anticipated in such
statements. Important factors could cause actual results to differ materially
from Aflease Gold`s expectations. Such factors include, among others, the actual
results of exploration activities, actual results of reclamation activities, the
estimation or realization 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 new deposits, availability
of capital required to place Aflease Gold`s properties into production,
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,
Aflease Gold`s hedging practices, currency fluctuations, title disputes or
claims limitations on insurance coverage, Although Aflease Gold 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.
There can be no assurance that such statements will prove to be accurate as
actual results and future events could differ materially from those anticipated
in such statements. Accordingly, readers should not place undue reliance on
forward-looking statements. Aflease Gold does not undertake to update any
forward-looking statements that are included herein, except in accordance with
applicable securities laws.
In addition, this news release uses the terms "indicated resources" and
"inferred resources" as defined in accordance with the SAMREC Code (South
African Code for Reporting of Mineral Resources and Mineral Reserves prepared by
the South African Mineral Resource Committee) (SAMREC) under the auspices of the
South African Institute of Mining and Metallurgy effective March 2000 or as
amended from time to time.
A mineral reserve 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 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 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 fossilized 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 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.
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 the Corporation 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: 02/02/2007 13:30:01 Produced by the JSE SENS Department.
