Gold One reiterates 2011 target

[miningmx.com] — GOLD One International on Monday confirmed its 2011 production guidance at 120,000 gold ounces.

The company said it anticipates improving on its current annualised levels of 90,000oz, by producing 25,000oz in the March quarter, 28,000oz in the June quarter, 34,000oz in the September quarter and 33,000oz in the December quarter.

Cash costs are forecast to average $417/oz for 2011.

The group further anticipates to reach a 150,000oz target in 2012.

Capital expenditure for Modder East is expected to be $42m, equating to a capital cost of $350/oz for 2011. Capital costs over the life of the mine remain unchanged at approximately $100/oz.

Included in the total capital cost is $21m of development capital. Total costs will therefore be $767/oz.

The group is also expecting earnings of $59m in 2011, based on consensus broker views of the gold price and exchange rates of $1,234/oz and R7.69/$ respectively.

With 806.9 million shares in issue, Gold One forecasts $0.07 earnings per share.

“The extensive planning and budgeting process that has been completed at Modder East has incorporated experience gained over the past 18 months of production, providing a confident growth plan for the next 24 months,” said Gold One CEO Neal Froneman.

“Gold One already has the lowest cash costs out of South African producers, which is all the more pleasing as it is being achieved at only 30% of designed tonnage throughput.”