Gold One is raising capital

Allan Seccombe | Mon, 15 Jun 2009 15:54
[miningmx.com] -- GOLD One’s shares are suspended on the JSE and ASX until it has made an announcement on a capital raising exercise to shore up the company’s balance sheet.

The money is not for the 110,000 oz/year Modder East project near Johannesburg, South Africa, which is fully funded and which will have its first gold pour in the third quarter of 2009.

Gold One, which comprises the former Aflease Gold and Australia’s BMA Gold, has raised capital via a variety of methods and by the end of May had a cash balance of R200m, enough to complete the Modder East mine.

Gold One wants to raise more money to put towards its other prospects as well as bolster its balance sheet. CEO Neal Froneman is on a road show in Australia and some Far East countries.

Gold One has started talks to raise capital and if it reaches a funding agreement it could have a “material effect” on the company’s shares.

Gold One asked for its shares to be halted on the JSE and ASX until it tells the market what arrangement has been reached.

“It’s a fairly common practice in Australia. We should have an announcement out early next week,” said company spokesman Ilja Graulich.

“It’s not to fund Modder. That’s done. We have a strong pipeline of projects that we need money for and this goes towards that. It won’t hurt us to strengthen the balance sheet either. We don’t know yet how much money we’ll be raising,” he said.

There are no immediate acquisitions on the cards for which Gold One needs the money, he said.

Gold One has the Sub Nigel mine in South Africa, which is providing ore to the Modder plant for the commissioning process. This mine is earmarked to step up production.

Gold One has an exploration project at Ventersburg in South Africa for which it will soon begin a pre-feasibility study. It also has exploration plays in Namibia and Mozambique.

There has been speculation the group could look at acquiring the East Rand assets near Modder East from the provisional liquidators of junior gold producer Pamodzi Gold.

The Pamodzi assets don’t fit the profile Gold One wants of being low cost, shallow mines and Graulich has ruled out any chance of it bidding for the properties.