Wgr: Geotechnical drilling to locate shaft positioning has begun at Wits Gold's Dbm Project

Witwatersrand Consolidated Gold Resources Limited
(Incorporated in the Republic of South Africa)
Register Number 2002/031365/06
JSE Code: WGR
ISIN: ZAE000079703
TSX Code: WGR
CUSIP Number: S98297104

('Wits Gold' or 'the Company')

JOHANNESBURG, Oct. 31, 2012 /CNW/ - Wits Gold is pleased to announce that the Company has started with geotechnical drilling for the shaft positioning at its advanced DBM Project in the southern Free State goldfield.

The primary objective of the initial three borehole diamond drilling programme is to obtain information required to locate the site for the planned twin shaft system. This work precedes the appointment of shaft sinking and related infrastructure contractors which is anticipated to take place in early 2013. Development at the DBM Project is expected to commence during the 1^st half of 2014.

The purpose of this drilling programme is to:

1. Obtain geotechnical data with respect to the underground rock conditions through which the planned shafts will have to traverse.
2. More accurately define the reef subcrop positions which will assist in the optimal positioning of the shafts in order to allow for quick access to reef, without sterilising any of the shallow Mineral Resources.
3. Determine potential water influx rates as well as the water quality analyses from both the Karoo and Witwatersrand-age aquifers.
4. Obtain information on the potential existence of any flammable gas that could influence shaft sinking operations so that the necessary precautions can be put in place well ahead of the time.

The drilling is expected to be completed during December 2012.

Wits Gold CEO Philip Kotze said: "We are making good progress at our advanced DBM Project, which remains on track both in terms of cost and timing.  This mine will create more than 1 000 new employment opportunities for people in the region, giving a new lease of life to this renowned gold mining district and deliver great returns for shareholders. The Wits Basin remains the world's premier gold location, and we are here to stay."

Background to the DBM Project

The DBM Project area comprises a triangular block measuring some 22km², located between the main Welkom goldfield to the north and the Beatrix and Joel gold mines to the south, which are operated by Gold Fields and Harmony respectively. The DBM Project area contains four gold bearing conglomerates. These comprise the Beatrix, Kalkoenkrans, B and Leader Reefs, all of which occur at the relatively shallow depths of between 480m and 1 250m below surface and which are all well understood as a result of previous mining within the regional area.

Following the completion of the Pre-feasibility Study (PFS) in July 2012, Wits Gold announced that international consultant Turgis Consulting, now Royal Haskoning DHV (RHDHV) and MDM Engineering were appointed to complete the final Feasibility Study for the DBM Project. RHDHV will be responsible for the detailed engineering and mine designs, while MDM Engineering will focus on the metallurgical plant and related design aspects. The detailed Study is expected to be completed during the third quarter of 2013.

DBM will be a shallow underground mine comprising a vertical twin shaft system to 660 metres, with average gold production expected to be 200 000oz/year over an 18 year life-of-mine. Production is expected to peak at 246 777oz at 5.5g/t during year 9, and first gold production is expected 47 months after shaft sinking commences. The PFS estimates production cash costs of US$628/oz with peak capital funding of ZAR2.37 billion (US$296 million at ZAR8/US$). At a gold price of ZAR R400 000/kg (US$1 555/oz & ZAR8/US$), DBM has a pre-tax NPV(5%) of ZAR7.3 billion (US$909 million) and an IRR of 28.0%. The Feasibility Study will further refine certain aspects identified in the PFS that will aim to improve mining efficiencies by introducing safer, semi-mechanised mining equipment and down-dip mining methodologies. The PFS showed that the semi-mechanised option increases IRR to 30.9% (at the above prices) and the pre-tax NPV (5%) to ZAR 10.2 billion (US$1.3 billion).

For more detailed information on the results of the PFS, please consult the Wits Gold website at www.witsgold.com. The Technical Report on the PFS by Turgis, dated 26 July 2012 is available on the Wits Gold website and at www.sedar.com. The PFS was completed under the guidelines of the South African Code for Reporting of Mineral Resources and Mineral Reserves ("SAMREC Code") as well as the Canadian National Instrument 43-101, and was undertaken by the independent consultants, Jim Pooley and Jon Hudson ("the Qualified/Competent Persons"), from Turgis Mining Consultants ("Turgis") and independent of Wits Gold. These independent Qualified/Competent Persons have approved the technical contents of the news release pertaining to the PFS results.

Johannesburg

31 October 2012

FORWARD LOOKING STATEMENTS

Certain statements in this news release may constitute forward-looking information within the meaning of securities laws.  In some cases, forward-looking information can be identified by use of terms such as "may", "will", "should", "expect", "believe", "plan", "scheduled", "intend", "estimate", "forecast", "predict", "potential", "continue", "likely", "anticipate" or other similar expressions concerning matters that are not historical facts.  Forward-looking information may relate to management's future outlook and anticipated events or results, and may include statements or information regarding the future plans or prospects of the Company.  Without limitation, statements about the final Feasibility Study and development of the mine at the DBM Project, the timing of drilling and shaft sinking, the required capital expenditures, the time required for the mine at the DBM Project to enter production, the length of time the mine at the DBM Project will operate at full production, the number of employment opportunities created by the DBM Project, the annual production of gold at the DBM Mine and other related statements concerning development, operations and production at the DBM Mine are forward-looking information.

Forward-looking information involves known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company to be materially different from the future results, performance or achievements expressed or implied by such forward looking information.  Such risks, uncertainties and other important factors include among others: economic, business and political conditions in South Africa; decreases in the market price of gold; hazards associated with underground and surface gold mining; the ability to attract and retain qualified personnel; labour disruptions; changes in laws and government regulations, particularly environmental regulations and mineral rights legislation including risks relating to the acquisition of the necessary licences and permits; changes in exchange rates; currency devaluations and inflation and other macro-economic factors; risk of changes in capital and operating costs, financing, capitalization and liquidity risks, including the risk that the financing required to fund all currently planned exploration and related activities may not be available on satisfactory terms, or at all; the ability to maximize the value of any economic resources.  These forward-looking statements speak only as of the date of this document.

You should not place undue importance on forward-looking information and should not rely upon this information as of any other date.  The Company undertakes no obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events except where required by applicable laws.

SOURCE Wits Gold