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GBG
GBG
GBG - Great Basin - Unaudited interim consolidated financial statements for
the quarter ended march 31, 2007
GREAT BASIN GOLD LIMITED
(Incorporated in Canada and registered as an External Company in South
Africa)
(Registration No. 2006/021304/10)
Share Code: GBG & ISIN Number: CA3901241057
("Great Basin" or "the Company")
UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE QUARTER ENDED
MARCH 31, 2007
CONSOLIDATED BALANCE SHEETS
As at March 31, 2007 and December 31, 2006
(Expressed in Canadian Dollars)
March 31 December 31
2007 2006
$ $
Assets
Current assets
Cash and equivalents 29,167,695 33,964,436
Amounts receivable 292,162 426,349
Inventory 104,222 53,437
Due from related parties 344,057 173,455
Prepaid expenses 860,143 539,991
30,768,279 35,157,668
Equipment 1,422,605 1,472,501
Reclamation deposits 182,823 103,702
Available-for-sale financial 2,632,852 2,274,649
instruments
110,910,000 110,910,000
Mineral property interests
145,916,559 149,918,520
Liabilities and Shareholders`
Equity
Current liabilities
Accounts payable and accrued 3,296,769 1,330,823
liabilities
10,136 -
Due to related parties
3,306,905 1,330,823
Future income taxes 16,797,441 18,837,000
457,751 405,000
Site reclamation obligations
17,255,192 19,242,000
Shareholders` equity
Share capital 201,967,092 201,457,592
Warrants 1,252,000 1,252,000
Contributed surplus 8,514,240 7,863,472
Deficit (86,737,073) (81,227,367)
Accumulated other comprehensive
income 358,203 -
125,354,462 129,345,697
145,916,559 149,918,520
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
For the three months ended March 31, 2007 and March 31, 2006
(Expressed in Canadian Dollars)
Three months ended March
31
2007 2006
$ $
Expenses (income)
9,950 -
Accretion of reclamation obligation
- 719
Amortization
Conference and travel 216,201 199,749
5,109,551 639,508
Exploration (see exploration
expenses schedule)
Foreign exchange (gain) loss (533,197) 580,453
Interest and other income (351,940) (145,340)
Legal, accounting, and audit 148,694 106,203
Office and administration 1,251,062 569,604
Shareholder communications 61,307 88,883
Stock-based compensation - 214,482 136,390
exploration
Stock-based compensation - office 539,286 328,255
and administration
Trust and filing 92,513 86,357
Loss before the undernoted and 6,757,909 2,590,781
income taxes
Mark-to-market adjustments on - (202,000)
investments
Loss before income taxes 6,757,909 2,388,781
Future income tax recovery (1,248,203) -
Loss for the period 5,509,706 2,388,781
Other comprehensive income
Unrealized gain on available-for- (293,392) -
sale financial instruments
Other comprehensive income (293,392) -
Total comprehensive loss 5,216,314 2,388,781
Basic and diluted loss per share 0.05 0.03
Weighted average number of common 113,609,602 93,869,719
shares outstanding
CONSOLIDATED STATEMENTS OF SHAREHOLDERS`EQUITY AND DEFICIT
(Expressed in Canadian Dollars)
Three months ended Year ended
March 31, 2007 December 31, 2006
$ $
Common shares Shares Shares
Balance at 201,457,592 93,685,379 161,228,635
beginning of
period 113,411,713
Fair value of 103,000 - 753,849
options -
exercised
Private - 3,333,334 7,033,683
placement, net
of share issue -
costs
Shares issued - 11,200,000 23,058,915
for cash, net of
share issue -
costs
Share purchase 406,500 1,193,000 1,782,510
options 310,000
exercised
Shares issued - 4,000,000 7,600,000
for Burnstone
Gold Property,
July 2006 -
Balance at end 201,967,092 113,411,713 201,457,592
of the period 113,721,713
Share purchase Warrants
warrants Warrants
Balance at 1,252,000 - -
beginning of the
period 2,672,000
Warrants issued - 672,000 159,000
pursuant to
share issuance -
Warrants issued - 2,000,000 1,093,000
for Burnstone
Gold Property -
Balance at end 1,252,000 2,672,000 1,252,000
of period 2,672,000
Contributed
surplus
Balance at 7,863,472 5,007,211
beginning of the
period
Non-cash stock- 753,768 3,610,110
based
compensation
Share purchase (103,000) (753,849)
options
exercised,
credited to
share capital
Balance at end 8,514,240 7,863,472
of the period
Deficit
Balance at (81,227,367) (69,610,556)
beginning of the
period
Net loss for the (5,509,706) (11,616,811)
period
Balance at end (86,737,073) (81,227,367)
of the period
Accumulated
other
comprehensive
income
Adjustment to 64,811 -
opening balance
- change in
accounting
policy
Unrealized gain 293,392 -
on available-for-
sale financial
instruments
Balance at end 358,203 -
of the period
TOTAL 125,354,462 129,345,697
SHAREHOLDERS`
EQUITY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended March 31, 2007 and March 31, 2006
(Expressed in Canadian Dollars)
Three months ended March
31
2007 2006
$ $
Operating activities
Loss for the period (5,509,706) (2,388,781)
Items not involving cash
Amortization 85,754 1,271
Future income tax recovery (1,248,203) -
- (202,000)
Mark-to-market adjustment on
investments
753,768 464,645
Non-cash stock-based compensation
expense
(801,306) 600,000
Unrealized foreign exchange (loss)
gain
9,950 -
Accretion reclamation obligation
Changes in non-cash operating
working capital
Amounts receivable 134,187 76,047
Inventory (50,785) -
(320,152) 11,201
Prepaid expenses
Accounts payable and accrued 1,965,946 (127,911)
liabilities
52,751 -
Reclamation obligation
Cash used in operating activities (4,927,796) (1,565,528)
Investing activities
Purchase of equipment (35,858) (27,402)
Reclamation deposits (79,121) (254)
Cash used in investing activities (114,979) (27,656)
Financing activities
406,500 529,079
Common shares issued for cash, net
of cash issue costs
Advances to related parties (160,466) (198,967)
246,034 330,112
Cash provided by financing
activities
Decrease in cash and equivalents (4,796,741) (1,263,072)
33,964,436 17,516,909
Cash and equivalents, beginning of
period
Cash and equivalents, end of period 29,167,695 16,253,837
Supplementary information
Taxes paid - -
Interest paid - -
Interest received 351,683 145,340
Non-cash financing and investing
activities
Fair value of stock options 103,000 238,390
transferred to share capital on
options exercised from contributed
surplus
CONSOLIDATED SCHEDULE OF EXPLORATION EXPENSES
For the three months ended March 31, 2007 and March 31, 2006
(Expressed in Canadian Dollars)
Mineral Property Interests Three months ended March 31
2007 2006
$ $
Burnstone
Assays and analysis 51,228 9,770
Amortization 85,013 51
Drilling 692,709 -
Engineering 22,203 209,711
Environmental, socio-economic and 4,227 37,282
land
Equipment rental 3,212 3,429
Geological 58,036 78,425
Graphics 73 1,652
Property fees and exploration 5,839 87,844
option payments
Site activities (78,241) 36,367
Transportation - 1,006
Exploration expenses before the 844,299 465,537
following
Stock-based compensation 35,441 99,287
Exploration expenses incurred 879,740 564,824
during the period
Cumulative exploration expenditures 24,327,572 21,523,977
beginning of year
Cumulative exploration
expenditures, end of period 25,207,312 22,088,801
Burnstone Bulk Sampling and
Hollister development
Establishment work 158,058 -
Equipment rental and services 612,701 -
Surface infrastructure 732,800 -
Portal construction 83,229 -
Underground access and 1,099,257 -
infrastructure
Operational costs 1,213,957 -
Property fees 3,648 -
Exploration expenses before the 3,903,650 -
following
Stock-based compensation 163,863 -
Exploration expenses incurred 4,067,513 -
during the period
Cumulative exploration expenditures 3,302,211 -
beginning of year
Cumulative exploration 7,369,724 -
expenditures, end of period
Hollister
Assays and analysis 14,039 207
Amortization 741 -
Drilling 162,129 -
Engineering 4,113 19,282
Environmental, socio-economic and 80,878 7,282
land
Geological 49,614 8,915
Graphics 14,818 5,047
Property fees and exploration (39,246) 1,376
option payments
Site activities 5,969 3,794
Transportation 10,823 520
Exploration expenses before the 303,878 46,423
following
Stock-based compensation 12,756 9,901
Exploration expenses incurred 316,634 56,324
during the period
Cumulative exploration expenditures 25,192,512 23,300,423
beginning of year
Cumulative exploration 25,509,146 23,356,747
expenditures, end of period
Other
Assays and analysis - (1,226)
Amortization - 501
Engineering 21,281 -
Environmental, socio-economic and 1,087 130
land
Equipment rental 1,779 7,211
Geological 30,446 61,683
Graphics 925 -
Property fees and exploration 630 201
option payments
Site activities 302 56,560
Transportation 1,274 2,488
Exploration expenses before the 57,724 127,548
following
Stock-based compensation 2,422 27,202
Exploration expenses incurred 60,146 154,750
during the period
Cumulative exploration expenditures 1,431,474 334,221
beginning of year
Cumulative exploration 1,491,620 488,971
expenditures, end of period
Total exploration expenses before 5,109,551 639,508
the following
Stock-based compensation 214,482 136,390
Total exploration expenses incurred 5,324,033 775,898
during the period
Cumulative exploration expenditures 54,253,769 45,158,621
beginning of year
Cumulative exploration 59,577,802 45,934,519
expenditures, end of period
1. NATURE OF OPERATIONS
These interim consolidated financial statements are prepared in
accordance with Canadian generally accepted accounting principles.
They do not include all the disclosures as required for annual
financial statements under generally accepted accounting principles.
These interim consolidated financial statements should be read in
conjunction with the Company`s annual consolidated financial
statements which are available through the Internet on SEDAR at
www.sedar.com.
Operating results for the three month period ended March 31, 2007 are
not necessarily indicative of the results that may be expected for the
full year ending December 31, 2007.
2. SIGNIFICANT ACCOUNTING POLICIES
These interim consolidated financial statements follow the same
accounting policies and methods of application as the Company`s most
recent audited annual financial statements, except for the changes
described in note 3.
3. CHANGES IN ACCOUNTING POLICIES
Effective January 1, 2007, the Company adopted the following new
accounting standards issued by the Canadian Institute of Chartered
Accountants ("CICA") relating to financial instruments. These new
standards have been adopted on a prospective basis with no restatement
to prior period financial statements.
(a) Financial Instruments - Recognition and Measurement (Section
3855)
This standard sets out criteria for the recognition and
measurement of financial instruments for fiscal years
beginning on or after October 1, 2006. This standard
requires all financial instruments within its scope,
including derivatives, to be included on a Company`s balance
sheet and measured either at fair value or, in certain
circumstances when fair value may not be considered most
relevant, at cost or amortized cost. Changes in fair value
are to be recognized in the statements of operations and
comprehensive income (loss).
All financial assets and liabilities are recognized when the
entity becomes a party to the contract creating the item. As
such, any of the Company`s outstanding financial assets and
liabilities at the effective date of adoption are recognized
and measured in accordance with the new requirements as if
these requirements had always been in effect. Any changes to
the fair values of assets and liabilities prior to January
1, 2007 are recognized by adjusting opening deficit or
opening accumulated other comprehensive income (loss).
All financial instruments are classified into one of the
following five categories: held for trading, held-to-
maturity, loans and receivables, available-for-sale
financial assets, or other financial liabilities. Initial
and subsequent measurement and recognition of changes in the
value of financial instruments depends on their initial
classification:
- Held-to-maturity investments, loans and receivables,
and other financial liabilities are initially measured
at fair value and subsequently measured at amortized
cost. Amortization of premiums or discounts and losses
due to impairment are included in current period net
earnings.
- Available-for-sale financial assets are measured at
fair value. Revaluation gains and losses are included
in other comprehensive income until the asset is
removed from the balance sheet.
- Held for trading financial instruments are measured at
fair value. All gains and losses are included in net
earnings in the period in which they arise.
- All derivative financial instruments are classified as
held for trading financial instruments and are measured
at fair value, even when they are part of a hedging
relationship. All gains and losses are included in net
earnings in the period in which they arise.
In accordance with this new standard, the Company has classified
its financial instruments as follows:
- The Company`s investment in Kryso Plc. shares are
classified as available-for-sale financial instruments.
Such instruments are measured at fair market value in
the consolidated financial statements with unrealized
gains or losses recorded in comprehensive income
(loss). At the time the investment is disposed of,
gains or losses are included in net earnings (loss).
(b) Hedging (Section 3865)
This new standard specifies the circumstances under which hedge
accounting is permissible and how hedge accounting may be
performed. The Company currently does not have any hedges as it
has a policy of non-hedging.
(c) Comprehensive Income (Section 1530)
Comprehensive income is the change in shareholders` equity during
a period from transactions and other events from non-owner
sources. This standard requires certain gains and losses that
would otherwise be recorded as part of net earnings to be
presented in other "comprehensive income" until it is considered
appropriate to recognize into net earnings. This standard
requires the presentation of comprehensive income, and its
components in a separate financial statement that is displayed
with the same prominence as the other financial statements.
Accordingly, the Company now reports a consolidated statement of
comprehensive income (loss) and includes the account "accumulated
other comprehensive income" in the shareholders` equity section
of the consolidated balance sheet.
11. SUBSEQUENT EVENTS
Subsequent to March 31, 2007,
(a) the Company completed a public offering of 57.5 million units at
a price of $2.60 per unit, raising gross proceeds of $
149,500,000. Each unit consisted of one common share and one-half
of a common share purchase warrant of the company. The common
shares and warrants comprising the units have separated
immediately upon the closing of the transaction.
Each whole purchase warrant entitles the holder thereof to
purchase one common share of the company at a price of $ 3.50 per
share until April 20, 2009.
(b) the Company completed the financing of the agreement to purchase
Hecla`s 50% earn-in rights and certain tangible assets in the HDB
for a total cash consideration of US$45 million, raised through
the public offering noted above as well as a share settlement to
the value US$15 million (7,930,214 shares) on April 19, 2007.
(c) the Company has entered into a framework agreement whereby
Tranter Gold (Pty) Ltd will purchase approximately 19.94 million
shares ("the BEE Shares") in Great Basin for ZAR 260 million
(approximately US$37 million), which will represent approximately
14.5% of the common shares in the Company (prior to above share
issuances), and thereby acquire a qualifying indirect interest in
the Burnstone Gold Project as required under South Africa`s broad-
based black economic empowerment act.
(d) the Company granted 3,994,000 options on April 18, 2007 with an
exercise price of $2.68 per common share and expiry dates of
April 18, 2010 (2,662,000 options) and April 18, 2012 (1,332,000
options).
The full set of financial statements and Management Discussion and Analysis
are available on Great Basin`s website: www.greatbasingold.com
Approved by the Board of Directors
Ferdi Dippenaar Ronald W Thiessen
Director Director
4th Floor, 138 West Street 1020 - 800 West Pender Street
Sandown, Johannesburg Vancouver, BC Canada V6C 2V6
South Africa Tel 604 684?6365
Tel 011 884 1610 Fax 604 684?8092
Fax 011 884 1826 Toll Free 1 800 667?2114
www.greatbasingold.com
16 May 2007
Johannesburg
Sponsor
Nedbank Capital
Date: 16/05/2007 11:08:01 Produced by the JSE SENS Department.
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