Hi all, Found this interview on Mining Weekly. Has some interesting points that some may not be aware of.
JOHANNESBURG (miningweekly.com) – Gold junior Gold One, which on Monday clinched the first-ever dual primary Johannesburg and Sydney stockexchange listings, now has its eye on Toronto, Gold One CEO Neal Froneman told Mining Weekly Online on Monday.
Froneman described the simultaneous ASX/JSE listings as the first step in a strategy that includes other international listings “and the most obvious one is the Toronto Stock Exchange (TSX)”.
Gold One is currently fully funded, having raised more than R120-million for the completion of its Modder East gold project in difficult markets.
On Monday, Gold One saw its ASX share price rise in Sydney from A 22c a share to A 38,5c a share, with its JSE price rising from R1,90 a share to R2,20 a share.
One ASX trade was at A 98c share, which is the equivalent of R6,60 a share in South African currency.
“For now, we are fully funded. Clearly, it’s not smart to raise money when you expect your share price to rerate, so we’ll be watching that carefully. We would like to improve our balance sheet and we also have some other opportunities in the pipeline for which we would like to have a war chest.
“We’ll be working towards improving exposure in Australia and perhaps even consider placing some more shares there, but that is a decision we still have to take.
“We’re going to be sensitive towards dilution. We have 660-million shares issued, which is a large number, and perhaps consideration should be given to a consolidation, but we certainly have access to shares that we can issue, and that will be something that we’ll consider as we see a rerating of our share price,” Froneman told Mining Weekly Online.
Gold One owns the small Twin Hills gold mine in Australia and Froneman sees it as appropriate that any TSX listing should come with the acquisition of North American assets, “so you can guess where we’re also looking”.
Gold One’s production target is 500 000 oz/y of gold by 2014/15.
“We have the assets in Southern Africa that can produce that number of ounces, but I have also always said that it would probably be appropriate to see that 500 000 oz target with some external growth as well. It’s a tough target, but I am confident that we can get there within five years,” Froneman told Mining Weekly Online.
The dual primary ASX/JSE listings have come about as a result of a new JSE stipulation, which declares a listing as primary once the JSE holds more than one half of the shares traded.
“Dual primary listing does require very strict corporate governance, and I’m very pleased that we have been entrusted with the opportunity to set the standard,” Froneman said.
Gold One’s first South African gold project is a far cry from South Africa’s usual “deep, dark and dangerous” gold mines, the shallow Modder East being more in the Australian and North American mould.
“We’ve built a company based on a very different business model. We have focused on assets that are shallow and medium grade. Because they are shallow, they are generally of lower technical risk.
“They’re certainly a lot safer, and when you combine that with medium grade, you end up with assets that are probably highmargin as well, which is very much a North American- and Australian-type profile, and that’s why the asset base that we’ve built up in South Africa fits so well into Australia, and has created the excitement that it has,” Froneman added.
In Southern Africa, Gold One has the Ventersburg gold prospect in South Africa’s Free State province, Etendeka in Namibia, and Tulo in Mozambique. The development of the Twin Hills asset in Australia is not a priority on the Gold One project schedule. The primary reason for the BMA transaction was to acquire the ASX vehicle and its existing retail shareholder base.
On Gold One’s intention to list on the TSX, Froneman told Mining Weekly Online: “South Africa is unfortunately, not a great place to develop a junior mining company. The Australians and the Canadians understand the risks associated with junior mining companies and love the risk-reward relationship.”
Johannesburg would become a secondary listing if the JSE share balance falls below 50%: “I do think that there’ll be a transition from a majority of our shares being traded in South Africa to the majority starting to move across to Australia.”
Gold One International has been created out of a reverse takeover of the ASX-listed BMA Gold and the changing of the JSE’s Aflease Gold into Gold One.
“Our focus was the listed vehicle in Australia. There’s a far larger retail shareholder base in Australia than there is in South Africa. South Africa still has the big mining-house syndrome. Retail shareholders are few and far between and institutional shareholders tend to look towards major mining houses.
“We also look forward to growing internationally as well as in South Africa, and we certainly have to the platform to do that,” he said.
Ninety-five per cent of the new company represents the existing Aflease Gold shareholder base, with the new 5% on the ASX coming in from BMA. Of that base, 20% are American Depository Receipts (ADRs) on the New York ADRs exchange, with the balance traded on the JSE.
