Gold One International Limited (ASX: GDO) is a gold producer listed on ASX and JSE. Its flagship operation is the Modder East mine, also owning the nearby existing Sub Nigel mine, which is used primarily as a training centre in the build-up of Modder to full production. Its other projects and targets include Ventersburg the Free State goldfields and the Tulo concession in Mozambique. Production for 2010 is targeted at between 100,000 and 120,000 ounces of gold at a cash cost of less than US$400/ounce. Reserve base of 1.36 million gold ounces and a total resources base of 13.66 million gold ounces. Gold One International (ASX: GDO) ticked an important milestone during the quarter as it moved from a developer to a gold producer during the March 2010 quarter and expanded its communication strategy aimed at increasing visibility of Gold One as an investment proposition. Key takeway points for the quarter included: - Gold One booked a 21% increase in gold output with 13,208 ounces of gold produced. - Modder East achieved average cash costs of US$ 480/oz, in a strong South African Rand environment. Allowing for this, cash costs for Modder East would have been US$ 430/oz based on budgeted exchange rates which is in line with the guidance provided. - Revenue for the Company for the quarter was US$ 14.4 million, and cash operating costs were US$ 7.1 million, resulting in operating cash flow of US$ 7.3 million. - Operating cash flow of US$ 7.3 million. Development and capital expenditure for the quarter across the Modder East and Sub Nigel projects was US$ 5.6 million. - Cash on hand at the end of the quarter was US$ 8.9 million, compared to an end of December 2009 quarter cash balance of US$ 13.4 million. - The Company paid US$ 4.2 million to redeem convertible bonds while also paying interest on the bonds for the quarter of around US$ 1.3 million. - Gold One was cash flow positive during the quarter, excluding the payments made in respect of the convertible bonds. - Average gold price received was US$ 1,107/oz. - Gold recoveries increased by 4.3% to 96% for the quarter. - Zero lost time injuries for the quarter. In his review of the quarter, CEO Neil Froneman said ramp up at Gold One's flagship Modder East operation continued during the quarter, of which 12,583 ounces were sold within the quarter ending on 31 March 2010. Inventory on hand at the end of the quarter of 625 ounces was dispatched to the refinery on the 6th of April 2010, following the Easter long weekend. These achievements should be viewed in the context of the distractions around wage negotiations and the resultant industrial action experienced at Modder East from the 23rd of March 2010 onwards. The increase in gold production was primarily as a result of a 29% increase in volume mined (total of 79,176 tonnes) and a 9% increase in volume treated, which totalled 72,800 tonnes made up of 56,409 tonnes from Modder East, 4,387 tonnes from low grade Modder East development ore and 12,004 tonnes from Sub Nigel. As a result of further plant optimisation, gold recoveries have increased from 92% to 96%. The increase in gold production was primarily as a result of a 29% increase in volume mined (total of 79,176 tonnes) and a 9% increase in volume treated, which totalled 72,800 tonnes made up of 56,409 tonnes from Modder East, 4,387 tonnes from low grade Modder East development ore and 12,004 tonnes from Sub Nigel. There was a consistent recovered grade of 6.86g/t for Modder East. The quality of the orebody continued to be reflected in the high on reef development grades. During the quarter, a total of 99.6 metres of on reef development was completed with 71 metres having been sampled. Over the 71 metres, the average Buckshot Pyrite Leader Zone (BPLZ) thickness is 75 centimetres at an average grade of 1,239 cmg/t (or 16.5 g/t over the in-situ reef width, equating to 12.4 g/ton over a 100 centimetre mining width). Two banks were shortlisted to provide US$ 65m credit facility to redeem convertible bonds. One South African bank and one international bank have been shortlisted to finalise and implement a facility on a syndicated basis, and it is anticipated that final credit committee approved term sheets will be in place by the end of May 2010. There was a positive outcome to the Ventersburg Scoping Study which demonstrated an 11 year mine life peaking at 157,000 ounces per annum. Drilling at Ventersburg has since re-commenced. Neil Froneman said he was pleased to advise that Gold One is covered and researched by 5 analysts and brokers, each with a buy or outperform recommendation. Gold One is planning to build up to full production in 2011 at our flagship Modder East mine and management remains confident on its ability to deliver on its plans. Industrial action being experienced will have an impact on the June quarter's production, which will be clarified once there is certainty regarding the conclusion of the impasse.

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