| Tue 1 Apr 2008, 14:35 | | GBG - Great Basin Gold Reports Increase In Losses As Capital Expenditure On |
|
GBG
GBG
GBG - Great Basin Gold Reports Increase In Losses As Capital Expenditure On
Growth Projects Increases
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")
GREAT BASIN GOLD REPORTS INCREASE IN LOSSES AS
CAPITAL EXPENDITURE ON GROWTH PROJECTS INCREASES
April 1, 2008, Vancouver, BC - Great Basin Gold Ltd. (TSX: GBG; AMEX: GBN; JSE:
GBG) ("Great Basin" or the "Company") announces that for the year ended December
31, 2007, the Company incurred a loss of 31 cents per share as compared to a
loss of 11 cents per share in fiscal 2006. The increase in the loss is due
mainly to higher exploration and development costs incurred advancing its two
growth projects. In addition the Company incurred 100% of the costs with regard
to the development of the Hollister Project, following the acquisition of Hecla
Mining Company`s 50% earn-in rights in the Hollister Development Block ("HDB").
The rise in expenditures at HDB as well as the additional development and
exploration activities at the Burnstone project increased the total exploration
and development costs to $42.0 million compared to $8.0 million in 2006.
At the Hollister Property, exploration costs increased to $8.4 million (2006 -
$1.7 million). During the third quarter of 2007, a decision was made to expedite
exploration within the HDB area as well as other surface target areas. Good
progress is being made with these activities, with initial results expected
during the second quarter of 2008.
The development cost of $17.9 million incurred at the Hollister Property
consists of mainly equipment rental and services, surface infrastructure,
underground infrastructure and general site activities, and based on its current
permit provisions, is in line with the Company`s plan to produce approximately
80,000 ounces in 2008.
Exploration costs for the Burnstone Property increased to $3.3 million (2006 -
$2.5 million), mainly due to an increase in drilling activities during the year.
This expenditure is in line with the Company`s focus on expanding its mineral
reserves and resources. In February 2008 Great Basin announced that following
work done in 2007 and a database of 245 holes, total gold contained in the
measured and indicated resources increased by 41% to approximately 11 million
ounces1. Approximately 2.0 million ounces have been added to the inferred
resources, increasing to a total of 2.4 m million ounces. In 2008, work will be
directed toward Area 4 that could be mined from the infrastructure currently
being developed.
At the Burnstone Property, in addition to further exploration to expand and
upgrade the mineral resources, construction of the decline and surface
infrastructure for the bulk sampling program and future mining activities was
advanced. For the year ended December 31, 2007, total costs of $10.8 million
were incurred (2006 - $2.9 million). Construction of the vertical shaft and
design of the metallurgical plant commenced during the fourth quarter of 2007.
As at 31 March 2008, the decline had progressed to some 1,534 metres from the
portal entrance, and it is expected to reach the first breakaway to the reef
structure that hosts the mineral reserves at the beginning of the June 2008
quarter.
In addition to activities at Burnstone and Hollister, a further $1.1 million
(2006 - $1.0 million) was incurred on other exploration activities in Alaska
(Ganes Creek), Mozambique (Tsetsera project) and in respect to the farms
Roodepoort 598IR, Rietfontein 561IR and Rietbult Estates 505IR that are outlying
portions within the greater option area of the Burnstone Property.
General office and administration costs increased to $17.7 million in 2007
compared to $7.3 million in 2006, mainly due to additional administrative
activities required to support the increased exploration and development
activities at Burnstone as well as the management of the Nevada operations that
were taken over from Hecla. The increase in staff also had the result that the
Company recognized $5.6 million in stock-based compensation expense during 2007
compared to $3.6 million in 2006.
-2-
Interest and other income increased to $3.7 million in 2007 (2006 - $1.3
million) mainly due to the impact of higher cash balances on hand after the
capital raising.
Other income to the amount of $2.7 million was earned from the treatment of bulk
samples from the Hollister property.
At December 31, 2007, Great Basin had working capital of approximately $78.2
million, as compared to $33.8 million at the end of 2006. The Company has a
strong balance sheet, has no debt and has project funding of US$57.0 million
available with no hedging commitments.
As at 31 December 2007, the Company had 203,395,902 common shares issued and
outstanding.
Ferdi Dippenaar, President and CEO commented: "Great Basin Gold is at an
interesting and exciting phase of its development as it is in the process of
transformation an advanced explorer to a junior producer. Good progress is
being made in all areas of the business and we are looking forward to 2008, as
we plan to deliver ounces from production at Hollister and bulk sampling at
Burnstone.
Focused exploration programs are currently underway at a number of sites,
notably the Hollister Property from which we can expect to see initial results
in the next quarter. Following our successful capital raising in April to
finance the acquisition of Hecla`s 50% interest in the HDB, the Company remains
well financed to bring its project into production."
Ferdi Dippenaar
President and CEO
For additional details on Great Basin and its gold properties, please visit the
Company`s website at www.grtbasin.com or contact Investor Services:
Tsholo Serunye in South Africa 27 (0) 11 884 1610
Melanee Henderson in North America 1 800 667-2114
Barbara Cano at Breakstone Group in the USA (646) 452-2334
No regulatory authority has approved or disapproved the information contained in
this news release.
Cautionary and Forward Looking Statement Information
This release includes certain statements that may be deemed "forward-looking
statements". All statements in this release, other than statements of historical
facts, that address possible future commercial production, reserve potential,
exploration drilling results, development, feasibility or exploitation
activities and events or developments that Great Basin Gold expects to occur are
forward-looking statements. Although the Company believes the expectations
expressed in such forward-looking statements are based on reasonable
assumptions, such statements are not guarantees of future performance and actual
results or developments may differ materially from those in the forward-looking
statements. Factors that could cause actual results to differ materially from
those in forward-looking statements include market prices, exploitation and
exploration successes, and continued availability of capital and financing, and
general economic, market or business conditions. Investors are cautioned that
any such statements are not guarantees of future performance and those actual
results or developments may differ materially from those projected in the
forward-looking statements. For more information on the Company, Investors
should review the Company`s annual Form 40-F filing with the United States
Securities and Exchange Commission and its home jurisdiction filings that are
available at www.sedar.com.
Information Concerning Estimates of Measured, Indicated and Inferred Resources
This news release also uses the terms "measured resources", "indicated
resources" and "inferred resources". The Company advises investors that although
these terms are recognized and required by Canadian regulations (under National
Instrument 43-101 Standards of Disclosure for Mineral Projects), the U.S.
Securities and Exchange Commission does not recognize them. Investors are
cautioned not to assume that any part or all of the mineral deposits in these
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 ever be upgraded to a higher category. Under
Canadian rules, estimates of Inferred Mineral Resources may not form the basis
of feasibility or pre-feasibility studies, or economic studies except for
Preliminary Assessment as defined under 43-101. Investors are cautioned not to
assume that part or all of an inferred resource exists, or is economically or
legally mineable.
_______________________________
1. As announced in the Company`s February 19, 2008 news release at a 400 cmg/t
cut-off, the measured and indicated resources are 48.9 million tonnes grading
6.9 g/t gold and the inferred resources are 17.0 million tonnes grading 4.37 g/t
gold.
Date: 01/04/2008 14:35:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
