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Additional Information

Market:	ASX
Sector:	Gold Mining
EPIC:	GDO
Latest Price:	0.48 (0.00%)
52-week High:	0.56
52-week Low:	0.29
Market Cap:	388.32M

1 year chart

1 day chart

Gold One International Full Gold One International profile here

Gold One International (ASX: GDO, JSE: GDO) flagship operation is the Modder East mine, also owns the nearby existing Sub Nigel mine. The company's assets include a pipeline of Southern African projects comprising 21.71 million ounces.

Gold One is currently under a A$0.55 cash offer for a minimum 60% stake from a Chinese consortium.

Research house values Gold One International at $0.65 cps

Thursday, June 24, 2010

European research house Edison Investment Research has penned a research report on Gold One International (ASX: GDO), valuing Gold One at A$0.65.

Price A$0.28
Market Cap A$226m
Code GDO
Listing JSE/ASX
Sector Mining
Shares in issue 805.9m
52 week High Low
A$0.40 A$0.23

In addition to already producing mines in the Witwatersrand basin, Gold One has advanced the development of its assets by completing a positive independent scoping study on the Ventersburg project in South Africa’s Free State province.

Previously, we placed a value of 7.8 Australian cents per share (Acps) on Gold One’s non-producing assets including Ventersburg), based on the in-situ value of their resources.

However, an analysis of the cash flows accruing to shareholders as a result of the development of Ventersburg suggests these assets could now be valued at 20.15Acps, potentially rising to 25.93Acps in the event of future exploration success.

Potential for elevated grade at Modder East

Current operations at GDO’s main producing asset, Modder East on the East Rand, are situated very close to the shoreline where grades are higher than those originally envisaged in the geological model. As a result, the average grade mined was 9.16g/t in Q409 and 8.41g/t in Q110.

On-reef development sampling during the course of development along the Buckshot Pyrite Leader Zone in Q1, however, returned average values of 16.5g/t over the average 75cm thickness of reef, implying that a
grade of 12.39g/t is achievable when mined across a stope width of one metre. As such, it suggests that our forecast average mined grade for FY10 of 8.38g/t is eminently achievable.

Valuation: Discount nudging 60%

Adding our new valuation for Ventersburg to our adjusted valuation for its producing assets, Modder East and Sub Nigel, plus our estimate of the value of the company’s loans to its BEE partners, yields a total value for Gold One’s shares of 64.98Acps, potentially rising to 70.76Acps in the event that it is able to drill up an additional 1Moz of ‘indicated’ resources in the near future.

This compares to our previous valuation of 54.91Acps (or 60.31Acps in the event of exploration success), representing an increase of 18.3%. At 28Ac therefore, Gold One’s shares are trading at a 56.9% discount to our valuation of the assets, potentially rising to 60.4% in the event of near-term exploration success. NB: valuations are conducted at a long-term gold price of US$1,177/oz.

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