[miningmx.com] — GOLD One International has declared better than forecast production figures, staying on track to avoid invoking a “claw back’ clause in its buyout transaction with a Chinese consortium.
Reporting a production update on Thursday, Gold One said it produced 28,511 ounces during the quarter to end-June, exceeding previous guidance of 28,000 oz for the period. Total production for the first half therefore amounts to 54,699 oz as the ramp-up of its Modder East gold mine continued.
Gold One CEO Neal Froneman said the group would however not raise its full-year guidance of 120,000 oz.
“The figure is an important aspect of our agreement with the Chinese,’ Froneman said, referring to the company’s deal with China’s Baiyin Nonferrous Group to acquire at least 60% in Gold One.
According to the structure of the deal, should Gold One not reach its production target for the year, the bidders would be offered a “claw back’ comprising a placement of new shares up to 492 million shares.
The Baiyin-led consortium, which seeks to own at least a 60% to 75% in Gold One following the transaction, has already secured a 17.7% stake in April.
Froneman said Baiyin was still waiting for the conclusion of administrative processes at state level in China to proceed with the next step of the transaction, which would consist of the placement of 375 million shares at A$0.40 (about R2.97; Gold One’s primary listing is in Australia) each in exchange for A$150m.
In the following phase, the consortium would make an offer for 100% of Gold One’s remaining shares at A$0.55 (R4.08). Should it not reach the 60% threshold following the cash offer, more shares would be issued at A$0.53 each.
The deal was now expected to be concluded by end-October, a month later than anticipated earlier.
Gold One’s shares have traded in a band between around R3.50 and R3.65 on the JSE since announcing the Baiyin deal.
“We’re now half-pregnant with two significant deals,’ said Froneman, referring also to the group’s proposed takeover of Rand Uranium. “Our share price is not so much guided on the performance of Modder East any more.’
He said the $250m Rand Uranium transaction was progressing according to schedule, with the parties now waiting for the department of mineral resources to transfer the mining rights.
