[miningmx.com] — GOLD One International on Thursday reported a record output for the September 2010 quarter with group production amounting to 19,470 ounces – a 58% improvement on the previous quarter’s 12,287 ounces.
Revenue for the quarter increased by 59% to $23.5m and group cash operating costs were $10.1m, resulting in a 63% increase in operating cash flow of $13.4m.
Development and capital expenditure for the quarter across the Modder East and
Sub Nigel projects was $8.5m, resulting in a net $4.9m positive cash flow.
Gold One ended the quarter to end September 2010 with $9.2m of cash on
hand and receivables, compared to cash and receivables of $8.6m at the end of June 2010 quarter.
Looking to the December quarter, the company expects build up in production
levels to continue, and after due consideration for the disruptive December festive
season, quarterly production is estimated at between 20,000 and 22,000 ounces.
“Not only has production from Modder East undergone a quantum leap in the third
quarter, but the company has also made significant strides in terms of advancing our exploration projects, commencing the implementation of our Megamine strategy in the form of Goliath Gold, and receiving Absa and BNP Paribas credit committee
approval for a $65m debt facility to refinance Gold One’s convertible bonds,” said Gold One president and CEO Neal Froneman.
Gold One announced the establishment of Goliath Gold, a new medium-depth gold
exploration and development company, last week.
Goliath Gold will be created through a reverse takeover of investment holding
company White Water Resources (WWR).
Gold One said it planned to acquire control of White Water through the sale of its
Megamine assets. White Water would then be renamed Goliath Gold with Gold One
holding a 74% stake and existing White Water shareholders holding 26%.
Megamine, located east of Johannesburg, comprises Gold One’s operating Sub Nigel mine and the Vlakfontein, West Vlakfontein and Spaarwater prospecting areas.
Froneman said Goliath Gold would therefore house the Megamine assets – a 12 million ounce gold resource on the East Rand – as well as some of White Water’s properties, which offer potential additional ounces contiguous to Megamine.
He said the creation of the new company allows Gold One to ringfence its shallow
low-cost ounces and strong operational cash flows while unlocking value in Gold
One’s deeper resources.
Gold One expects to conclude the transaction by the end of the first half of 2011.
