Gold One International to grow its surface business with Gold Fields partnership

Gold One International (ASX: GDO, JSE: GDO) and Gold Fields (JSE: GFI, NYSE: GFI, NASDAQ: GFI, Dubai: GFI) have entered a memorandum of understanding to investigate the viability of concurrently reprocessing their combined surface tailings deposits in South Africa.

Gold One and Gold Fields currently operate mines in the West Rand, a region in South Africa’s Witwatersrand Basin with a long history of gold and uranium mining.

Gold One International chief executive officer Neal Froneman said economic recovery of gold and uranium from historical tailings deposits has been successfully demonstrated in other districts of the Witwatersrand Goldfields.

“The combination of our extensive technical studies and the quality of assets that would be pooled into the partnership presents an exciting prospect for the joint venture and growth of Gold One’s surface business,” he said.

“Importantly, the economically sustainable retreatment of the existing tailings deposits will also have a positive environmental impact, benefiting all stakeholders in the district in which we operate.”

Under the agreement, the companies will jointly investigate the feasibility of establishing a joint venture into which both parties will contribute surface assets for retreatment.

These assets are expected to comprise in excess of 700 million tonnes and represent over 60% of the total tailings material in the region.

A detailed Scoping Study is first on the agenda for the joint venture which will be completed by mid-2012, following which a decision will be made on whether to progress the study to a Feasibility level.

If the joint venture goes ahead, Gold One and Gold Fields will reclaim and retreat the historical tailings material and current tailings to recover residual gold, uranium and sulphur.

A key objective of the project will be to address the re-deposition of the residues in accordance with modern sustainable deposition practices, ultimately supporting mine closure in an environmentally sustainable manner.

In 2010, Gold Fields completed extensive economic studies on its Tailings Treatment Project, which is a low-grade gold and uranium recovery project focusing on the existing tailings storage facilities and the current underground mining horizons of the company’s West Rand operations, Kloof Driefontein Complex and South Deep.

In December 2010, Gold Fields declared a Resource of 475.6 million tonnes at its tailings storage facilities, which includes gold Resources of 4.5 million ounces and uranium Resources of 53.6 million pounds.

Gold Fields chief executive officer Nick Holland said, “Gold Fields already has projects in place to retreat our tailings and the MoU with Gold One allows us to further explore a relatively low risk opportunity to extract value from Gold Fields’ surface resources that is not inherent in our share price.”


Rand Uranium Acquisition

Earlier this month Gold One completed the US$250 million acquisition of Rand Uranium.

The takeover provides Gold One with the change of control of the mineral rights associated with Rand Uranium, which has a large resource base on the West Rand of South Africa, 30 kilometres from Johannesburg.

The company took over daily management of Rand’s Cooke underground operations and Randfontein surface operations during September 2011.

The Randfontein surface operations are currently processing around 300,000 tonnes of tailings material per month through the Cooke Gold Plant.

Gold One has also begun a review of its Cooke Uranium Project. Rand Uranium earlier completed a comprehensive Definitive Feasibility Study on the processing of the Cooke Tailings Deposit for the extraction of both gold and uranium, including 70% of detailed and already completed engineering design.

The primary focus of the Feasibility Study is the construction of a uranium metallurgical plant to treat the Cooke Tailings Deposit.

In addition, during the December 2011 quarter, Gold One began assessing the potential treatment of several other surface tailings deposits that exist on the mining and prospecting licences acquired from Rand Uranium.

Importantly, the acquisition of Rand Uranium not only presents Gold One with the opportunity to investigate the possibility of reprocessing the combined tailings deposits, but the company could log overall gold production of 300,000-350,000 ounces of gold in 2013.

The transaction now allows the company to fast track the turnaround of the Radfontein Surface and Cooke Underground operations.

The deal has also been bolstered by the substantial increase in the gold price since Gold One signed the Rand Uranium sale agreement in late May.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/24453/gold-one-international-to-grow-its-surface-business-with-gold-fields-partnership--24453.html