JOHANNESBURG (miningweekly.com) – JSE-listed Gold One on Wednesday reported a second consecutive quarter of record gold production, with 71 740 oz having been produced in the three months ended September 30, reflecting a 5% quarter-on-quarter increase.

The company’s Cooke underground and Randfontein surface operations exceeded gold production guidance by 5% and 3% respectively, while the Modder East operation’s production remained consistent with the previous quarter, albeit below guidance and despite a significant increase in underground tonnages.

“The sustained focus on quality mining and the productivity improvements at the Cooke underground operation have been pleasing. The benefits of the turnaround strategy and focus on mining above the pay limit have resulted in a 12.3% increase in gold produced, resulting in a record high of 35 660 oz despite a three-day strike during the quarter,” Gold One said. 

The company added that it was estimated that about 1 550 oz of production had been lost as a result of the strike. Adjusting for this lost production the Cooke operations would have achieved 37 210 oz, which would have been 9.4% above guidance and represented a 17% quarter-on-quarter improvement.

Further, Gold One stated that the Randfontein surface operation performed well, with the September quarter’s production amounting to 9 054 oz. During the quarter, production at the Randfontein operation benefited from the successful commissioning of the hydraulic reclamation of slimes.

“The introduction of the hydraulically reclaimed slime has resulted in a 5% increase in tonnes milled from 860 272 t to 907 211 t. The recovered grade remained stable at 0.31 g/t, while metallurgical recoveries increased from 71% to 72%.”

Meanwhile, the company also reported a 15% quarter-on-quarter increase in revenue to $91.4-million, while group cash operating costs improved 3% on the previous quarter.

“This decrease in cash operating costs is especially pleasing considering that the quarter included higher-than-average electricity costs relating to annual increases and higher winter tariffs, as well as annual wage increases, which applied to all employees at the Cooke underground and Randfontein surface operations,” the company stated. 

Wages increased by 8% for Category 3 and 4 employees and rock-drill operators and 7.5% for all other employees with effect from July 1, 2013.

Further, during the quarter, Gold One also announced the planned merger of the Cooke underground and Randfontein surface operations into Sibanye Gold for a 17% interest in Sibanye.

“The integration of Gold One’s West Rand assets with Sibanye will allow for regional operating synergies to be realised in both the underground operation and the surface operation where the West Rand tailings retreatment project joint feasibility study is already under way,” the company explained.

Gold One also, on Wednesday, announced that it had received all necessary Chinese regulatory approvals for this transaction.

A consortium of Chinese shareholders, comprising Baiyin Nonferrous Metal Group, the China-Africa Development Fund, Long March Capital and CITIC Kingview Capital Management Company held a 90% shareholding in Gold One.

“I am pleased with the progress we are making in closing the transaction with a number of the conditions precedent to the transaction having been fulfilled. The Chinese regulatory approvals demonstrate strong support for both Gold One and Sibanye’s business strategies.

“Sibanye shareholders will meet on November 5 to approve the transaction, after which only the South African regulatory approvals remain as material conditions precedent,” Gold One CFO and acting CEO Christopher Chadwick said.