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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (29391)	11/24/2008 9:20:31 AM
From: LoneClone	Read Replies (1) \| Respond to of 193021

Aflease In Australian Merger By Charlotte Mathews 21 Nov 2008 at 10:32 AM GMT-05:00 resourceinvestor.com Link-up with BMA Gold will form medium-sized group with easier access to funds. The merger plans and new name, Gold One International, recall a similar strategy by Aflease Gold CEO Neal Froneman when he headed Uranium One. JOHANNESBURG (Business Day) -- Junior gold miner Aflease Gold plans to merge with Australian-listed BMA Gold to create a new dual-listed, medium-sized gold group better able to raise funding. Uranium One emerged from the splitting of Aflease Gold into a gold- focused company and a uranium company called Uranium Resources. Uranium Resources later merged with Toronto-listed Southern Cross Resources to create a dual-listed company called SXR Uranium One. SXR Uranium One went on an acquisition spree from 2005 to last year as the uranium price started to soar, but lost its impetus last year partly on failing to achieve production targets. Froneman left Uranium One in February to head Aflease Gold. Yesterday he said Gold One was not meant to be a link to the Uranium One name, but it was the same type of branding. The difference was Gold One’s primary focus would not be on external, but on organic growth. He said the uranium price had been easier to forecast than gold because it was driven by supply and demand factors. But he believed the gold price could exceed $1,000/oz within the next six months as investors realised the inflationary effects of governments’ rescue packages for the banks, and sought to preserve their wealth in gold. Gold One will have a single producing mine when Modder East pours its first gold towards the end of next year, and a portfolio of exploration properties in South Africa, Namibia, Mozambique and Australia. The total gold resource will be about 15-million ounces. After Modder East, Gold One’s focus would be on developing its pipeline of projects, especially the Ventersburg property in South Africa, Froneman said. Gold One’s target was to be producing 500000oz of gold a year within about five years. About 180,000 oz a year would come from Modder East and another 100,000 oz from Sub-Nigel, where infrastructure was being refurbished. The Ventersburg project could produce about 200,000-300,000 oz a year, from a shallow mine which would be relatively quick to build, once resources were proven, he said. The merger of the two companies would occur through BMA Gold consolidating its share capital on a 20:1 basis, taking over Aflease Gold, and each Aflease Gold shareholder receiving one share in the new merged entity for each share they hold. BMA Gold’s share price was $A0.005 on ASX this week, about 66c in South African currency after a 20:1 consolidation and exchange rate conversion, compared with Aflease’s 114c. This suggested Aflease was offering a substantial premium for a company with minor exploration assets. BMA Gold has a gold resource of about 195000oz compared with Aflease’s 12,07-million ounces, and a net A$1m (R6,6m) in cash compared with Aflease’s R331m. “We agreed to a 34% premium,” Froneman said. “Their assets are very small compared to ours, so we are not buying them for their assets. “It is a strategic transaction for us, repositioning the company to access capital for our pipeline of projects. We will have an Australian listing and a JSE listing and will be one of the first companies to have a dual primary listing, which is important.” Gold One would be the fifth-largest gold producer listed in Australia.