Gold One to buy Rand Uranium for US$250m

Finance

Publishing Date: 28 Apr 2011 12:51pm GMT
Author: Mining Journal

Gold One International Ltd, the South African gold miner, has announced the acquisition of Rand Uranium Ltd for US$250 million.

The deal will initially more than double Gold One’s annual production to over 250,000oz and also add a uranium project to the portfolio.

Gold One says it has secured a US$210 million underwritten facility from an unnamed financial institution. The company is entitled to issue shares to pay the balance.

Only a few days ago, Gold One announced that it is in talks for both an acquisition and a takeover, and revealed that China’s Bayin Nonferrous Group had become a 17.67% shareholder.

Rand Uranium was formed in 2008 when Harmony Gold Mining Ltd sold a 60% stake in the Cooke sections of its Randfontein Estates gold mine to Pamodzi Resources Fund backed by private equity players. The stake was sold for US$209 million, valuing the entire business at US$348 million.

Rand Uranium produced 163,000oz of gold at a cost of fully US$1,222/oz in 2010. The company has a total underground resource of 10.36Moz of gold at a grade of 3.54g/t, with nearly 2Moz in the reserve category. There is a surface resource of 3.1Moz at 0.3g/t.

A detailed engineering design for a uranium project is 70% complete. Currently the study suggests steady state production of 2.3Mlbs/y of U3O8.