[miningmx.com] — GOLD One International on Monday bucked the prevailing negative mood on the JSE after posting positive production figures for its December-quarter.
Gold One, often criticised for regular downward revisions of its production forecast, said it produced 21,480oz for the three month period, in line with earlier guidance of between 20,000oz to 22,000oz. The figure equates to full-year production of 66,445oz.
The company’s original target for 2010 has been revised several times, down from an original 100,000oz at the beginning of last year to 85,000oz in May following a five-week strike at its flagship Modder East mine.
After achieving production of 13,208oz in the first quarter, 12,287oz in the second and 19,470oz in the third, Gold One revised its target down one more time in November, saying output for the full-year would be between 65,00oz and 67,000oz.
Gold One President and CEO Neal Froneman on Monday reiterated the group’s 2011 target of 120,000oz, with 25,000oz output predicted for the first quarter.
“Modder East’s continued production improvement is a result of an increasing number of mining panels that have transitioned from ledging to full stoping operations,’ said Froneman. “Management has established a solid foundation to ensure that we achieve our 2011 production guidance of 120,000oz.’
Gold One’s shares were trading 233c at 11:00 on Monday, up 1.75% for the day. Gold traded largely unmoved at $1,372.73/oz while the All Share-index was down 0.49% at 31 772.26 points.
In October, RBC Capital Markets analyst Leon Esterhuizen said although Gold One continues to ramp up production and generate positive cash flows, the stock was undermined by the company’s constant pullback in guidance.
He said the latest update was good news for Gold One, despite the earlier downward revisions. However, a better indication would be if Gold One delivered on the quarterly targets set for 2011.
RBC has given Gold One an outperform rating with a share price target of A$0.40, a premium of 17% on its current trading price in Australia of A$0.34.
