JOHANNESBURG (miningweekly.com) – The JSE- and ASX-listed gold junior Gold One said on Wednesday that it had secured additional prospecting rights in Gauteng province's East Rand Basin, 30 km from Johannesburg, where there were gold-mining resuscitation opportunities.

Gold One CEO Neal Froneman told the Citi Global Resources Conference in London that the contiguous prospecting rights over 16 000 ha had an inferred resource of 5,2-million ounces of gold at a grade of 3,39 g/t and was separated from the East Rand and Central Rand water basin, where mining had to be accompanied by costly water pumping.

Froneman outlined that the project – dubbed Megamine – incorporated the consolidated areas in the vicinity of the three former gold mines of Spaarwater, Vlakfontein and West Vlakfontein.

He also drew attention to other shallow East Rand Basin resources that could deliver an additional 50 kg of gold a month to the company's new Modder East gold plant serving the company's Modder East gold mine, which was currently cash positive.

Modder East's depth of from 300 m to 500 m, he added, was a fraction of the South African average gold-mine depth of 3 000 m.

Froneman told the conference that the initial eight-year life-of-mine Modder East would produce from 10 000 oz to 120 000 oz of gold in 2010 and reach steady-state production of 180 000 oz a year from 2011.

He added that Modder East's cash costs were below $300/oz, and that costs were continuing to fall.

The unhedged company also had no bank debt, but a convertible bond that would absorb 142-million shares 805-million shares on offer.

The operating cost exposure of Modder East –  located close to an urban area with excellent infrastructure – to the new Eskom electricity tariffs was a moderate 7% in 2010, rising to 9% in 2012.

Froneman said that independent consultants had signed off an indicated and inferred code-compliant resource of 13-million ounces for the company's South African operations including Ventersburg in the Free State. Not included in the total were the Etendeka prospect in Namibia and the Tulo prospect in Mozambique.

The corporate head office of Gold One is in Sydney - where only 9,3% of its shareholding resides - and the operational office is in Johannesburg – where 30,9% of its shareholders are based.