JOHANNESBURG (miningweekly.com) – JSE- and ASX-listed Gold One would produce between 16 000 oz and 20 000 oz in 2009, and would increase output six fold in 2010, the company said on Wednesday.

Gold production would rise to between 100 000 oz and 120 000 oz in 2010, at an average cash cost of $330/oz.

In 2011, Gold One would boost output to 180 000 oz, at an average cost of $250/oz, the miner said in a statement announcing the commercial and continuous production at its flagship Modder East mine in South Africa.

The gold producer, led by CEO Neal Froneman, reported that production from Modder East had resulted in an operating profit for the maiden month of November.

The announcement of commercial production followed on from the successful commissioning of both the mine and the newly built metallurgical plant, which saw first gold poured during July, from underground ore.

To date, a total of 11 041 oz of gold had been produced, with cash on the balance sheet of A$17-million.

“All components of the project are operating well and in many cases exceeding the design parameters,” the company stated.

The production ramp-up has increased to about 1 000 t/d, which was the equivalent of a milling rate of around 30 000 t/m of ore. This throughput was about 43% of the targeted monthly throughput required by the end of 2010, providing significant confidence in the company’s guidance for the project.

Gold One reported that the achievement of continuous production was one of the conditions applicable to the $71,6-million five-year convertible bonds due in December 2012. The terms and conditions provided that unless continuous production was achieved on or before the end of March 2010, the conversion price would have to be reset in favour of the bondholders.

To subscribe to Mining Weekly's print magazine email subscriptions@creamermedia.co.za or buy now.