Gold One

Modder East Gold Mine

Modder East is the first new mine built on the East Rand in 28 years.   On 21 July 2009 Gold One announced that it had poured its first 240 ounces of gold from underground Modder East ore, well ahead of schedule, following on from the successful commissioning of the Modder East plant in June 2009 using low grade third party surface material.  Continuous and Commercial production was declared on 1 December 2009.

The Modder East mine is situated on the East Rand in the Gauteng Province of South Africa, approximately 30km to the east of Johannesburg, and is located in one of South Africa's richest historic gold mining districts. The project consists of the Modder East and UC Prospect areas, where the Black Reef and the UK9a Kimberley Reef have been identified.

The Modder East mine encompasses a shallow underground mine (300 metres to 530 metres below surface) with a dedicated gold treatment facility with a production capacity of 100,000 tonnes per month.  Mining at Modder East will employ a conbination of conventional and mechanized mining techniques.  Access to the ore body is via a trackless decline from surface to the footwall of the reef horizons.  The decline serves as a roadway for vehicles to transport material into the mine and rock out of it.  Additionally, a vertical shaft has been sunk and will be used to transport personnel in and out of the mine and to provide ventilation.

Feasibility Study Results

In August, 2006 Aflease Gold released the results of the feasibility study conducted by Turgis Consulting and audited by SRK Consulting for Modder East. The project was shown to be economically robust and technically viable. Highlights from the feasibility study include:

• Production at steady state (2010 to 2015) is expected to average approximately 110,000 ounces of gold per annum
• Average cash operating costs over the life of the project of US$217 per ounce
• Phase I of Modder East has a life of 10 years
• Start-up capital expenditures total US$108 million (including working capital and pre-production mine development)

Gold One International Consolidated Resource Statement

South African Operations  - January 2009

Geology and Mineralization

Modder East is located in the East Rand Basin of South Africa, which lies in the northeastern quadrant of the Witwatersrand Basin. Most gold mineralization in the East Rand is hosted in quartz-pebble conglomerate beds or reefs.

The Black Reef is the principal target at Modder East and dips shallowly at approximately 3° to the south. It contains three distinct facies. At the top is the Buckshot Pyrite Leader Zone ("BPLZ"), which averages 0.5 metres in width and is the primary mining target. The BPLZ is a placer deposit, with gold present within a heavy mineral suite dominated by pyrite and hosted within a conglomerate. The BPLZ overlies the Blanket Facies, a 1.3 metre thick quartzite which has relatively low gold grades and is not a principal target at Modder East. At the base of the Black Reef is the Channel Facies, a 3 metre thick, erosional feature.

The UK9A and UK5A Reefs dip shallowly to the south between 6° and 12° with mineralization contained within sedimentary channel features. These channels range from several tens of metres to hundreds of metres in width. At the Modder East gold project, the UK9A and UK5A Reefs have been drilled and evaluated between 290 metres and 530 metres below surface.

Mining Method

Mining at Modder East employs a combination of conventional and mechanized mining techniques. Access to the orebody is by trackless decline from surface to the footwall of the reef horizons. The decline serves as a roadway for vehicles to transport rock and material into and out of the mine. Additionally, a vertical shaft has been sunk and is used to transport personnel in and out of the mine and to provide ventilation.

Support of the development and stopes is based on a pillar system which protects the surface from any impact due to mining. It also ensures a safe and stable mining environment underground. Rock bolting and timber support is used where necessary for additional safety.

The mining method employed is conventional narrow reef mining as practiced widely throughout the South African mining industry. Though the mining is serviced by a trackless infrastructure, all access to the reefs and all on-reef workings are being mined in the conventional manner. Mined material from the reefs will be cleaned with scraper winches and fed into ore passes to be loaded into 30 tonne low profile underground haulage trucks. Material is then be transported to a central silo system, while dedicated 50 tonne haul trucks transport the ore to surface for processing.

Processing Method

The Modder East mine utilizes a brand new carbon-in-leach ("CIL") plant to process Black Reef and Kimberley ores. The plant will comprises a single stage semi-autogenous (SAG) mill, operating in closed circuit with hydrocyclones, CIL adsorption, elution, electrowinning and smelting.

The plant currently has a design capacity of 100,000 tonnes per month to match life of mine requirements. Recovery rates are expected to average 88% for the Black Reef and 95% for the UK9A Reef.