Neal Froneman,
Chief Executive,
Aflease Gold
 
Johannesburg, South Africa — MININGREVIEW.COM — 21 November 2008 – The combination of South Africa’s Aflease Gold and Australia’s BMA Gold is to create an attractive international gold business with a new mine on the brink of production and a portfolio of growth prospects.

Announcing this in a press release issued here and in Sydney, the two companies pointed out that the proposed transaction, which is supported by the boards of both companies, is subject to various conditions, including shareholder and regulatory approvals.

The release revealed that the new company – to be known as Gold One International – would be listed on the Australian and Johannesburg stock exchanges. Its assets would include Aflease Gold’s new Modder East mine, on the Witwatersrand near Johannesburg, which was on track to pour its first gold towards the end of 2009; a gold resource of more than 15 million ounces; and a number of gold exploration and development projects in Queensland, South Africa, Namibia and Mozambique.

It added that the proposed transaction would involve the inward listing of BMA on the JSE, and the subsequent acquisition by BMA of all the issued ordinary shares in Aflease Gold by way of a scheme of arrangement. BMA would complete a 20:1 share consolidation, and Aflease Gold shareholders would then receive one BMA ordinary share for each Aflease Gold ordinary share, and would consequently hold 95.6% of Gold One.

“Thereafter, the enlarged BMA will be renamed Gold One International. Aflease Gold chief executive Neal Froneman will become Gold One’s chief executive, and BMA Gold chief executive Mark Wheatley will be the new company’s non-executive chairman,” the release continued. “The completion of the scheme is expected in February 2009.”

The South African Reserve Bank has indicated that it is agreeable to BMA’s inward listing on the JSE, its subsequent acquisition of Aflease Gold, and the subsequent de-listing of Aflease Gold from the JSE.

Froneman said in Johannesburg that the enlarged company’s primary focus was to complete the Modder East project. Its longer term strategic vision would be to grow into a geographically diversified mid-tier gold producer with an annual production of 500 000 ounces and a premium market rating.

Aflease Gold currently has cash resources of R331 million which will be used to develop Modder East and progress its exploration assets. In addition Gold One will be looking to raise R120 million before June 2009.

“Our priorities will be to complete the development of the shallow, high-margin Modder East mine on schedule, to advance our other low-risk, near-surface assets, and to generate a cash flow capable of sustaining growth through organic expansion, as well as value-accreditive acquisitions,” Froneman said.

Speaking in Sydney, Wheatley said that given the current difficult environment, a broadened investor base and direct access to the Australian and South African capital markets would provide a number of funding options for the growth-orientated Gold One.

“There are few near-term gold development companies with such an attractive growth profile anywhere in the world and this – along with Gold One’s substantial resource base and strong, highly experienced management team – should attract significant interest from institutional and other investors, particularly on the ASX,” Wheatley said.