Johannesburg, 2 February - Aflease Gold (JSE code AFO) said today it had made significant progress towards building the company into an international business
with the capacity to become a substantial mid-tier gold producer.

Chief executive Neal Froneman noted that last week's first ore hoist at its successfully recommissioned Sub-Nigel mine, coupled with the on-track development of the Modder East project which is scheduled to pour its first gold in the fourth quarter of this year, had confirmed the company's status as a near-term producer.

"While our primary focus is on the successful completion of our flagship Modder East project we are also continuing to develop other growth opportunities in our portfolio. In addition, we are only a few weeks away from achieving our other major strategic objective, which is the externalisation of the business through the creation of Gold One International," he said.

Aflease Gold shareholders have unanimously approved the transaction in terms of which the Australian company BMA Gold will, after its inward listing on the JSE, acquire all the shares in Aflease Gold through a scheme of arrangement. The combined business will be known as Gold One International and will have a dual primary listing on the Australian Stock Exchange and the JSE. One of the last material conditions precedent outstanding for the transaction is Aflease Gold's bondholder approval, which will be sought at a meeting to be convened in due course.

Froneman also said the company was planning to raise a total of R120 million by the middle of 2009 to fully fund its current projects. It has already raised R38 million of this amount, at a premium to its current share price, through the first tranche of an innovative share acquisition arrangement with Trinity Asset Management.
 

With the imminent start up of the Modder East processing facility later this year, Johann Mouton has been appointed as vice president metallurgy and Mike Phillips as metallurgical manager.

Johann is a qualified metallurgist with over 20 years' experience who previously held senior management positions at Harmony and more recently Uranium One. Mike has a higher national diploma in extraction metallurgy and holds a BCom from Unisa. He has extensive gold plant experience for both surface tailings reclamation operations and underground hard rock gold plants.

With development on track to expose the first reef at Modder East Mike Baynes has been appointed as mineral resource manager - Modder East. Mike holds an honours degree in geology and has 20 years' experience in both gold and platinum exploration and operations. He has spent the past six years on the East Rand basin, where he gained experience in reef types similar to the ones to be mined at Modder East.
 

Modder East gold project
Access development
A significant milestone was achieved with the successful completion of the development of all three of the main access ends (Main Decline, Return Airway and Decline West) through the water bearing dolomites. During the last week of December 2008, all three ends intersected the quartzite layer at the expected elevation, which led to a significant reduction in the time required to probe the rock ahead of the face for the presence of water. All three main access ends are now fully into the quartzite layer.

Since January 2008, 5 700m of coverdrilling has been done in the main decline, 4 484m in the Return Airway and 3 800m in the Decline West. A total of 458 water intersections was encountered, three of which were in excess of 70 000 litres per hour. During this period, 1 800 tonnes of cement and 207 tonnes of chemical grout were injected to seal these intersections, at a total cost of R13.9 million.

As a result of the water intersections, 314 full production days were lost in the Main Decline, and 248 days were lost in the Return Airway, while 165 days were lost in the Decline West.

Thanks to the amelioration initiatives that management put in place, and the successful development through the dolomites, mine startup has largely been unaffected with the first gold pour expected to take place in Q4 2009. The rate of production build up has however been slowed and still as reported earlier, annual production during 2009 will be 20 000oz and 140 000oz in 2010 with steady state production of 180 000oz being achieved by 2011.

Not a single water intersection took place uncontrolled, and at no stage was there a risk of flooding of the underground workings.

The trackless decline development has now advanced a total of 1 866m since the start of the project and is only 187m from the first footwall drive.

The dedicated Return Airway which is on the critical path to the position from where the first reef raise will be developed, has advanced to a position approximately 18m above the reef horizon, which equates to less than 100m of development to the position of the first reef raise.

The Decline West, which was started in June 2008 to provide contingency and flexibility following the delays experienced as a result of the water intersections, has advanced faster than expected, and a total of 324m has been developed since July 2008.


Wide Reef resource
The company continues to explore the possibility of mining the much wider reefs of the blanket- and channel faces, dubbed the Wide Reefs, by means of trackless mining methods. Minxcon is undertaking an extensive study to confirm the feasibility of this project.

The blanket and channel faces are positioned just below the BPLZ and can therefore be accessed from the existing footwall development to deliver tonnage in addition to what was forecast in the bankable feasibility study.


Vertical shaft
The 6.5m diameter vertical shaft, which is being sunk by Grinaker-LTA, experienced lower than expected advance rates, partly due to the cautious approach adopted to the possibility of water intersections. Commissioning of the shaft is scheduled for Q3 2009, and while this date is later than the original forecast, it will not have an adverse effect on the production buildup, since development of the shaft was started a year ahead of schedule.

The shaft has reached a depth of 247m from surface and will be 345m deep when completed. The shaft will be connected to the current decline development and will provide the primary access for personnel to the underground workings. It will also be used for downcast ventilation purposes.


Metallurgical processing plant and tailings disposal facility
Construction of the processing plant is well advanced and it is expected that the plant will be commissioned in April 2009 after which it will treat underground Sub-Nigel ore and other low grade surface sources until the startup of Modder East stoping.

Only one critical delivery is outstanding, namely the girthgear for the 5m diameter semi-autogenous mill. Delivery ex China is expected by end February 2009.

Construction of the tailings facility has started and satisfactory progress is being made. Recent inclement weather has affected the bulk earthworks and may impact on this facility.


Standby electricity generation capacity
The company has commissioned 3MVA of standby electricity generation capacity during January 2009. Modder East, being a shallow mine, has low energy requirements and the standby capacity is adequate to guarantee the safety of employees and equipment. The installed capacity is sufficient to keep the undergound workings ventilated and free from risk of flooding in the event of a total power interruption from the national grid.


Unit costs
Management remains vigilant in its endeavours to constantly find the best cost/benefit options, but the continuous escalations in prices cannot be escaped. As a consequence, the company regularly updates its working cost estimates and based on the latest price indications has as at December 2008 increased its working cost estimate from R244/tonne published in June 2008 to R255/tonne. This translates to a cost of R58 000 per kg of gold produced. At the assumed R/US$ exchange rate of R7.50/US$, this translates to less than US$250/oz.

Background information on Modder East can be obtained from the SRK Competent Person's Report dated October 2008 contained in the Gold One International pre-listing statement, a report titled An Independent Technical Report on the Modder East Gold Project, located near Springs, Gauteng Province, Republic of South Africa dated August 31, 2006 as amended October 26, 2006 compiled by SRK Consulting and a SENS announcement titled Aflease Gold Announces an Enlarged 180 000 Oz Per Annum Modder East Gold Project. Both the report and the announcement can be accessed via the Aflease Gold website (www.gold1.co.za.).

Sub-Nigel 1 Project
The Sub-Nigel mine has been successfully recommissioned, below budget and as scheduled.


Phase 1
On 18 June 2008 Aflease Gold approved the first phase of the recommissioning of Sub-Nigel at a capital cost of R28.9 million after a detailed study showed a reasonable return for a relatively small investment in infrastructure.

Phase 1 was officially completed on 27 January 2009, when the first ore was hoisted, with a saving of approximately R5 million of the budgeted cost. The relatively large saving was due to the innovative approach taken by the project team, which used to use available resources and infrastructure to complete the project. Production ramp-up will now take place as planned over a four month period, to produce 6 000 ounces of gold per annum from a production rate of 6 000 tonnes of ore per month at a steady state cash cost of R138 000 per kg.

The project utilises the current infrastructure at Sub-Nigel which is in excellent condition and access stoping areas from existing development. The ore from Sub-Nigel will initially be processed through the Modder East plant which will have excess capacity until the latter reaches full production in 2011.

The recommisioning of Sub-Nigel has also created the opportunity of establishing an underground training centre for the training of production teams which will later be deployed at Modder East. The establishment of the training centre is well underway, and screening of applicants will start shortly, with the first training crews expected to be introduced in May 2009, two months before the first ledging (the preparation for reef mining) is scheduled to start.


Phase 2
A second phase during which mine production will be increased to 12 000 tonnes per month will follow the successful implementation of Phase 1. Work on this phase is expected to start in the second half of 2009.

Management has sufficient confidence in the long term viability of the Sub-Nigel project area to have begun the procurement of some of the long lead time items for the metallurgical plant. In anticipation of delineating further resources and applying for regulatory approval, the mill for the proposed Sub-Nigel plant has been ordered. A third phase could potentially see run of mine production increase to 20 000 tonnes per month, and will follow the successful implementation of Phase 2.

Ventersburg project
In February 2008 Aflease Gold announced a new SAMREC (South African Code for Reporting of Mineral Resources and Mineral Reserves) compliant inferred mineral resource estimate for its Ventersburg 1 project, located approximately 25km southeast of Welkom in the Free State Goldfields. The Ventersburg 1 prospecting permit covers an area of approx-imately 9 760 hectares and is located 18km from Harmony Gold Mine # 2 shaft and 25km east of President Steyn Gold Mine # 2 shaft, both of which are currently mining the 'A' Reef.

In its update released in June 2008, Aflease Gold announced that the inferred resource had also been made Canadian National Instrument 43-101 (CI 43-101) compliant.

The company is now also declaring both a SAMREC and CI 43-101 compliant indicated resource of 8.73 million tonnes at a grade of 5.12g/t for an indicated resource of 1.437 million ounces, from its Ventersburg I Project, using a cut-off of 400cmg/t.

During 2009, the company will focus on further upgrading the inferred resource to indicated.

About Aflease Gold
Aflease Gold is a South African gold resource company listed on the JSE. The company owns the Modder East Gold project, currently under construction, as well as the Sub Nigel, New Kleinfontein, Turnbridge and the Holfontein Gold projects, all on the East Rand; the Ventersburg Gold project in the Free State Goldfields, the Etendeka Gold project in Namibia and the Tulo concession in Mozambique. Aflease Gold was formed in January 2006 through the reverse takeover of Sub Nigel Gold Mining Company Limited by New Kleinfontein Mining Company, then a wholly-owned subsidiary of Uranium One Inc.

Cautionary Statement
This News Release includes certain "forward-looking statements" and "forward-looking information". All statements other than statements of historical fact included in this release including, without limitation, statements regarding future plans and objectives of Aflease Gold are forward-looking statements (or forward-looking information) that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors could cause actual results to differ materially from Aflease Gold's expectations. Such factors include, among others, the actual results of exploration activities, actual results of reclamation activities, the estimation or realization of mineral reserves and resources, the timing and amount of estimated future production, costs of production, capital expenditures, costs and timing of the development of Modder East and new deposits, availability of capital required to place Aflease Gold's properties into production, the ability to obtain a listing in Europe, Australia or North America, conclusions of economic evaluations, changes in project parameters as plans continue to be refined, future prices of gold and other commodities, possible variations in ore grade or recovery rates, failure of plant, equipment or processes to operate as anticipated, accidents, labour disputes and other risks of the mining industry, delays in obtaining governmental approvals, permits or financing or in the completion of development or construction activities, Aflease Gold's hedging practices, currency fluctuations, title disputes or claims limitations on insurance coverage, Although Aflease Gold has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended.

There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Aflease Gold does not undertake to update any forward-looking statements that are included herein, except in accordance with applicable securities laws.

In addition, this news release uses the terms "indicated resources" and "inferred resources" as defined in accordance with the SAMREC Code (South African Code for Reporting of Mineral Resources and Mineral Reserves prepared by the South African Mineral Resource Committee) (SAMREC) under the auspices of the South African Institute of Mining and Metallurgy effective March 2000 or as amended from time to time and where indicated in accordance with the Canadian National Instrument 43-101 - Standards for Disclosure for Mineral Projects.

A mineral reserve is the economically mineable part of a measured or indicated resource demonstrated by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate at the time of reporting that economic extraction can be justified. A mineral reserve includes diluting materials and allows for losses that may occur when the material is mined. A proven mineral reserve is the economically mineable part of a measured resource for which quantity, grade or quality, densities, shape and physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters to support production planning and evaluation of the economic viability of the deposit. A probable mineral reserve is the economically mineable part of an indicated mineral resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters to support mine planning and evaluation of the economic viability of the deposit.

A mineral resource is a concentration or occurrence of natural, solid, inorganic or fossilized organic material in or on the earth's crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a mineral resource are known, estimated or interpreted from specific geological evidence and knowledge. A measured mineral resource is that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity. An indicated mineral resource is that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed. An inferred mineral resource is that part of a mineral resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited exploration and ! sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. Mineral resources which are not mineral reserves do not have demonstrated economic viability. Investors are cautioned not to assume that all or any part of the mineral deposits in the measured and indicated resource categories will ever be converted into reserves. In addition, "inferred resources" have a great amount of uncertainty as to their existence and economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will be ever be upgraded to a higher category. Under South African rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies or economic studies except under conditions noted in the SAMREC Code.

Investors are cautioned not to assume that all or any part of an inferred resource exists or is economically or legally mineable. Exploration data is acquired by the Corporation and its consultants under strict quality assurance and quality control protocols.

No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.