Johannesburg - 31 January 2011.(MineWeb) Gold One International...

Johannesburg - 31 January 2011.
(MineWeb)
Gold One International Limited (ASX and JSE: GDO) is pleased to report that during the quarter under review the company produced 21480 ounces, a 10% increase relative to the September quarter and in line with production guidance. Given that the company's operations ceased for the festive break on 23 December, these production results were achieved with only 91% of the quarter being available for production. Total gold production for 2010 amounts to 66 445 ounces.

December quarter cash costs of US$ 467/oz (ZAR 104 049/kg) were achieved in a strong exchange rate environment of ZAR 6.93 / US$ 1. For the 2010 year, gold was produced at an average cash cost of US$ 484/oz (ZAR 114 216/kg) given an average exchange rate of ZAR 7.34 / US$ 1. Adjusting actual cash costs using the budgeted exchange rate of ZAR 8.41 / US$ 1, the average cash cost for 2010 equates to US$ 423/oz (ZAR 99 822/kg). This was negatively affected by the April strike month and if this period is excluded, the annual cash cost for the balance of 2010 equates to US$ 410/oz (ZAR 96 754/kg) (at budgeted exchange rates), compared to guidance of US$ 400/oz.

2010 represented Modder East's first full year of commercial production, during which Gold One achieved its maiden annual net profit before tax of US$ 18 million (ZAR 132.12 million), based on the unaudited financial statements. The full audited annual financial statements will be released toward the end of February 2011. The lower cash costs and higher production levels in the December quarter resulted in net cash flow from operations of US$ 8.35 million (ZAR 57.86 million), a 70% increase relative to the September 2010 quarter. Gold One increased its cash on hand and gold receivables by 26% to US$ 11.55 million (ZAR 76.77 million) during the December quarter, compared to an end of September 2010 quarter cash on hand and gold receivables balance of US$ 9.2 million (ZAR 64.33 million).

The final quarter of the 2010 financial year featured continued build up in production levels at Modder East. An increase of on-reef development meant that, at the end of December 2010, sufficient reserves had been opened up to support the planned production profile for a period in excess of six months should no further development take place. This level of flexibility, combined with the continuous build up, underpins the company's confidence in achieving the 2011 March quarter's guidance of 25000 ounces.

Importantly, these achievements were made without compromising our strong safety record, with the 2010 total lost-time injury frequency rate per 200 000 hours (LTIFR) of 0.48, better than the Australian industry benchmark of one LTIFR against which Gold One is measured.

The December 2010 quarter also saw an update of the company's mineral resources and ore (mineral) reserves at Modder East, Ventersburg, and Megamine. Gold One's total resource base now stands at 21.71 million ounces of gold, including 8.60 million ounces in the measured and indicated resource category (88.09 million tonnes at 3.03 grams per tonne) and 13.11 million ounces in the inferred category (103.06 million tonnes at 3.95 grams per tonne).
The company's proved and probable ore reserves have increased to 1.53 million ounces at 4.0 grams per tonne, resulting in an additional five years being added to the mine life for Modder East (a detailed breakdown of the updated mineral resources and reserves is available on the Gold One website).

Gold One President and CEO Neal Froneman comments, "I am delighted with the positive operational and financial performance of the company during the fourth quarter of 2010, which has provided us with a solid foundation as we enter the new year. Our primary focus for 2011 will be on maintaining the production build up at Modder East and cementing our position as one of the lowest cost gold producers in the industry. In addition, the continued advancement of our exploration projects aims to ensure a sustainable pipeline of production for future growth. Over the past years, Gold One's focus has primarily been on successfully bringing Modder East into production.

With the solid operational base that has been established the company is now in a position to dedicate resources to focus on external, value accretive growth opportunities."