Aflease: don't forget gold GOLD
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In all the excitement about the company’s pending trans-formation into one which will have its primary listing on the Toronto Stock Exchange – with a secondary listing on the JSE – the fact that Aflease also has gold resources is being somewhat overshadowed.
In fact, the company’s current full name is Aflease Gold and Uranium Resources, and it owns gold assets that are considered primary gold assets, some with uranium by-products, as well as uranium assets that have gold as by-products.
By-product gold is, by its nature, lower-grade gold.
“Our strategy is to separate our pure gold assets from our uranium assets, but this will be done without turning our back on our promising gold portfolio,” asserts Aflease CEO Neal Froneman.
So, how great are the gold assets? The audited ore-reserve and min-eral-resource statement, contained in the company’s annual report for 2004, has a total measured and indicated mineral resource of 32 216 000 t of ore, with an average grade of 3 g/t of gold and a total of 3 131 000 oz of contained gold.
A further 93 036 000 t of inferred resource at a grade of 1,3 g/t, contain- ing 4 018 000 oz of gold, is included in the report – however, this is better understood when grouped in terms of primary gold reserves and gold derived as a by-product.
In assessing the company’s pri-mary gold resources only, it has a resource of 59 600 000 t of ore, with an average grade of 4,15 g/t of gold and a total of 7 946 000 oz of contained gold.
This includes the pending acquis-ition (from AngloGold Ashanti) of the Weltevreden gold-mine (unaud-ited) and other inferred resources, totalling 34 134 000 t of ore, with an average grade of 4,67 g/t and a total of 5 125 000 oz of contained gold.
(Weltevreden has an indicated gold resource of 3,2-million ounces.) Probable ore reserves total 8 440 000 t, with an average grade of 5,3 g/t and 1 433 000 oz contained gold; the reserves are located in the Bonanza South and Modder East deposits.
The primary gold deposits are Bonanza South, Modder East, Kleinfontein, Turnbridge and the Outer Basin.
The gold derived as a by-product of the uranium operations is con-tained in a resource of 86 604 000 t of ore, with an average grade of 0,86 g/t of gold and a total of 2 403 000 oz of contained gold.
The resources are essentially an inferred category in the Rietkuil and Dominion ore deposits, which will be the company’s lead South African uranium operation, planned to come into operation in 2007.
Bonanza South has proved and probable gold reserves of 414 000 oz, with an average grade of 5,5 g/t and a measured and indicated resource of 723 000 lb of uranium oxide.
Bonanza is categorised by the company as a gold-mine but will form part of its uranium portfolio once the gold assets have been spun off into a separately-listed subsidiary on the JSE.
Despite the decision – still to be ratified by shareholders – to merge Aflease with Canada’s Southern Cross Resources to form SXR Uranium One, gold will remain an important focus for Aflease.
“The feedback we are getting from shareholders suggests that, while all of them want to see a strong uranium focus, only a min-ority would wish us to see the total disposal of our gold assets,” reports Froneman.
Exactly how the company plans to separate its gold and uranium assets is not yet known, but it will be through a listing of the gold assets on the JSE, as a subsidiary of Aflease