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GBG
GBG
GBG - Great Basin Gold - Unaudited Interim Consolidated Financial Statements
For The Quarter Ended March 31, 2008
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, 2008
CONSOLIDATED BALANCE SHEETS
As at March 31, 2008 and December 31, 2007
(Expressed in Canadian Dollars)
March 31 December 31
2008 2007
$ $
Assets
Current assets
50,528,296 78,362,954
Cash and cash equivalents
Amounts receivable 3,852,139 3,737,903
Inventory 5,118,519 199,185
Due from related parties 467,328 408,638
Held-for-trading financial
instruments 648,943 833,000
Prepaid expenses 676,999 811,208
61,292,224 84,352,888
21,047,983 14,295,727
Property, plant and equipment
Reclamation deposits 2,176,869 1,720,456
Available-for-sale financial
instruments 2,916,244 3,326,084
Investment in associates 6,852,527 7,203,973
Mineral property interests 218,484,690 218,413,930
Total assets 312,770,537 329,313,058
Liabilities and Shareholders`
Equity
Current liabilities
Accounts payable and accrued 7,423,478 6,099,246
liabilities
Due to related parties 471,192 22,098
7,894,670 6,121,344
29,844,919 33,983,164
Future income taxes
Site reclamation obligations 1,403,554 1,416,964
31,248,473 35,400,128
Shareholders` equity
Share capital 391,960,301 389,451,022
Warrants 17,727,248 17,934,934
Contributed surplus 13,154,414 12,197,791
Deficit (149,407,602) (132,395,033)
Accumulated other comprehensive
income 193,033 602,872
273,627,394 287,791,586
Total liabilities and shareholders`
equity 312,770,537 329,313,058
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
For the three months ended March 31, 2008 and March 31, 2007
(Expressed in Canadian Dollars)
Three months ended March 31
2008 2007
$ $
Expenses (income)
Exploration and pre-development 13,208,533 5,109,551
Accretion of reclamation obligation 17,339 9,950
Conference and travel 375,991 216,201
Foreign exchange loss(gain) 2,582,003 (533,197)
Interest and other income (1,175,997) (351,940)
Legal, accounting, and audit 253,581 148,694
Office and administration 4,337,076 2,004,830
Shareholder communications 148,266 61,307
Trust and filing 230,324 92,513
Loss before the undernoted and 19,977,116 6,757,909
income taxes
Loss from associate 351,446 -
Unrealized loss on held-for-trading 184,057 -
financial instruments
Loss before income taxes 20,512,619 6,757,909
Future income tax recovery (3,500,050) (1,248,203)
Loss for the period 17,012,569 5,509,706
Other comprehensive income
409,840 (293,392)
Unrealized loss (gain) on available-
for-sale financial instruments
409,840 (293,392)
Other comprehensive loss (income)
17,422,409 5,216,314
Total comprehensive loss for the
period
Basic and diluted loss per share 0.08 0.05
Weighted average number of common 203,902,119 113,609,602
shares outstanding
CONSOLIDATED STATEMENTS OF SHAREHOLDERS`EQUITY AND DEFICIT
(Expressed in Canadian Dollars)
Three months ended Year ended
March 31, 2008 December 31, 2007
$ $
Common shares Shares Shares
Balance at 389,451,022 201,457,592
beginning of the
period 203,395,902 113,411,713
Fair value of 631,070 2,005,064
options - -
exercised
Shares issued
for cash, net of
share issue - - 57,500,000 121,427,869
costs
Share purchase 1,229,960 5,111,184
options 723,000 3,015,830
exercised
Shares issued - 19,666,931
for Hecla
Ventures Corp., - 7,930,214
April 2007
Shares issued to - 36,323,195
Tranter
Burnstone (Pty)
Ltd, October - 19,938,650
2007
Shares issued to 29,700 -
CW Properties
LLC, February
2008 10,000 -
Share purchase 618,549 3,459,187
warrants 380,029 1,599,495
exercised
Balance at end 391,960,301 389,451,022
of the period 204,508,931 203,395,902
Share purchase Warrants
warrants Warrants
Balance at 17,934,934 1,252,000
beginning of the
period 31,433,202 2,672,000
Warrants issued - 16,210,226
pursuant to
share issuance - 28,750,000
Warrants issued - 1,178,815
pursuant Tranter
transaction - 1,684,312
Exercised (380,029) (207,686) (1,599,495) (688,689)
Expired - - (73,615) (17,418)
Balance at end 17,727,248 17,934,934
of the period 31,053,173 31,433,202
Contributed
surplus
Balance at 12,197,791 7,863,472
beginning of the
period
Non-cash stock- 1,380,007 5,633,276
based
compensation
Share purchase
options
exercised,
credited to
share capital (631,070) (2,005,064)
Fair value of 207,686 688,689
share purchase
warrants
exercised
Fair value of - 17,418
share purchase
warrants expired
Balance at end 13,154,414 12,197,791
of the period
Deficit
Balance at (132,395,033) (81,227,367)
beginning of the
period
Net loss for the (17,012,569) (51,167,666)
period
Balance at end (149,407,602) (132,395,033)
of the period
Accumulated
other
comprehensive
income
Balance at 602,872 64,811
beginning of the
period
Unrealized (409,840) 538,061
(loss) gain on
available-for-
sale financial
instruments
Balance at end 193,032 602,872
of the period
TOTAL 273,627,393 287,791,586
SHAREHOLDERS`
EQUITY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended March 31, 2008 and March 31, 2007
(Expressed in Canadian Dollars)
Three months ended March 31
2008 2007
$ $
Operating activities
Loss for the period (17,012,569) (5,509,706)
Items not involving cash
Depreciation 454,257 85,754
Future income tax recovery (3,500,050) (1,248,203)
Unrealized loss on held-for-trading 184,057 -
on financial instruments
Non-cash stock-based compensation 1,380,007 753,768
expense
Unrealized foreign exchange loss (655,534) (801,306)
Loss from associate 351,446 -
Accretion reclamation obligation 17,339 9,950
Changes in non-cash operating
working capital
Amounts receivable (114,236) 134,187
Prepaid expenses 134,209 (320,152)
Inventory (4,919,334) (50,785)
Accounts payable and accrued 1,324,232 1,965,946
liabilities
Reclamation obligation (13,410) 52,751
Cash used in operating activities (22,369,586) (4,927,796)
Investing activities
(41,060) -
Mineral property acquisition costs
Purchase of equipment (7,206,513) (35,858)
Reclamation deposits (456,413) (79,121)
Cash used in investing activities (7,703,986) (114,979)
Financing activities
1,848,509 406,500
Common shares issued for cash, net
of issue costs
Advances from (to)related parties 390,405 (160,466)
2,238,914 246,034
Cash generated from financing
activities
Decrease in cash and equivalents (27,834,658) (4,796,741)
Cash and equivalents, beginning of 78,362,954 33,964,436
the period
Cash and equivalents, end of the 50,528,296 29,167,695
period
CONSOLIDATED SCHEDULE OF EXPLORATION AND PRE-DEVELOPMENT EXPENSES
For the three months ended March 31, 2008 and March 31, 2007
(Expressed in Canadian Dollars)
Mineral Property Interests Three months Three months
ended March ended March 31
31
2008 2007
$ $
Burnstone - Pre-development
Burnstone - Bulk Sampling
Establishment work 56,442 158,058
Equipment rental and services 65,050 368,312
Surface infrastructure 76,692 292,121
Portal construction 24,365 83,229
Underground access and 538,217 355,624
infrastructure
Other cost
Operational costs 1,580,402 867,358
Property fees - 3,648
Metallurgical plant 34,288 -
Vertical shaft 1,362,987 -
Energy project 35,315 -
Permanent infrastructure - surface 716,202 -
Permanent infrastructure - 1,598,282 -
underground
Pre-development expenses before the 6,088,242 2,128,350
following
Office and administration 170,969 163,863
Pre-development expenses incurred 6,259,211 2,292,213
during the period
Cumulative pre-development 15,080,245 3,302,211
expenditures, beginning of period
Cumulative pre-development 21,339,456 5,594,424
expenditures, end of period
Hollister - Pre-development
Equipment rental and services 670,867 244,389
Surface infrastructure 414,309 440,680
Underground access and 1,095,259 1,090,231
infrastructure
Operational costs 1,527,217 -
Pre-development expenses before the 3,707,652 1,775,300
following
Office and administration 104,118 -
Pre-development expenses incurred 3,811,770 1,775,300
during the period
Cumulative pre-development 18,350,285 -
expenditures, beginning of period
Cumulative pre-development expenses, 22,162,055 1,775,300
end of period
Burnstone - Exploration
Assays and analysis 35,147 51,228
Depreciation 199,106 85,013
Drilling 316,320 692,709
Engineering 534 22,203
Environmental, socio-economic and - 4,227
land
Equipment rental 625 3,212
Geological 224,309 58,036
Graphics - 73
Property fees and exploration option 9,542 5,839
payments
Site activities 28,815 (78,241)
Exploration expenses before the 814,398 844,299
following
Office and administration 22,870 35,441
Exploration expenses incurred during 837,268 879,740
the period
Cumulative exploration expenditures, 27,733,355 24,327,572
beginning of period
Cumulative exploration expenditures, 28,570,623 25,207,312
end of period
Hollister - Exploration
Assays and analysis 194,061 14,039
Depreciation 255,151 741
Drilling 1,109,880 162,129
Engineering 2,166 4,113
Environmental, socio-economic and 199,660 80,878
land
Geological 54,598 49,614
Graphics - 14,818
Property fees and exploration option 25,114 (39,246)
payments
Site activities 965 5,969
Transportation - 10,823
Exploration expenses before the 1,841,595 303,878
following
Office and administration 51,714 12,756
Exploration expenses incurred during 1,893,309 316,634
the period
Cumulative exploration expenditures, 33,781,885 25,192,512
beginning of period
Cumulative exploration expenditures, 35,675,194 25,509,146
end of period
Other - Exploration
Assays and analysis 29,905 -
Engineering - 21,281
Environmental, socio-economic and - 1,087
land
Equipment rental 6,049 1,779
Geological 80,811 30,446
Graphics 15,171 925
Property fees and exploration option 5,080 630
payments
Property investigations 10,031 -
Site activities 247,684 302
Transportation 1,127 1,274
Exploration expenses before the 395,858 57,724
following
Office and administration 11,117 2,422
Exploration expenses incurred during 406,975 60,146
the period
Cumulative exploration expenditures, 2,528,091 1,431,474
beginning of period
Cumulative exploration expenditures, 2,935,066 1,491,620
end of period
Total pre-development and 12,847,745 5,109,551
exploration expenses before the
following
Office and administration 360,788 214,482
Total pre-development and 13,208,533 5,324,033
exploration expenses incurred during
the period
Cumulative pre-development and 97,473,861 54,253,769
exploration expenditures, beginning
of period
Cumulative pre-development and 110,682,394 59,577,802
exploration expenditures, end of
period
1. Basis of preparation and principles of consolidation
These interim consolidated financial statements have been 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, 2008 are not
necessarily indicative of the results that may be expected for the full
fiscal year ending December 31, 2008.
2. Significant accounting policies
These interim consolidated financial statements follow the same accounting
policies and methods of application as the Company`s most recent annual
financial statements, except as described in note 3.
3. Adoption of new accounting policies
Effective January 1, 2008, the Company adopted the following accounting
standards updates issued by the Canadian Institute of Chartered Accountants
("CICA"). These new standards have been adopted on a prospective basis with
no restatement to prior period financial statements.
(a) Capital disclosure (Section 1535)
This standard requires disclosure of an entity`s objectives, policies
and processes for managing capital, quantitative data about what the
entity regards as capital and whether the entity has complied with any
capital requirements and, if it has not complied, the consequences of
such non-compliance.
The Company`s objectives when managing capital are:
- To safeguard the Company`s ability to continue as a going concern, so
that it can provide returns for shareholders and benefits for other
stakeholders, and
- To provide an adequate return to shareholders by pricing products
commensurately with the level of risk.
The Company considers the items included in the consolidated statement of
shareholder`s equity as capital. The Company manages the capital structure
and makes adjustments to it in the light of changes in economic conditions
and the risk characteristics of the underlying assets. In order to maintain
or adjust the capital structure, the Company may issue new shares through
private placements, sell assets to reduce debt or return capital to
shareholders. The Company is not subject to externally imposed capital
requirements.
(b) Financial Instruments - Disclosure (Section 3862) and Presentation
(Section 3863)
These standards replace CICA 3861, Financial Instruments - Disclosure and
Presentation. They increase the disclosures currently required, which will
enable users to evaluate the significance of financial instruments for an
entity`s financial position and performance, including disclosures about
fair value. In addition, disclosure is required of qualitative and
quantitative information about exposure to risks arising from financial
instruments, including specified minimum disclosures about credit risk,
liquidity risk and market risk. The quantitative disclosures must provide
information about the extent to which the entity is exposed to risk, based
on information provided internally to the entity`s key management
personnel.
Refer to note 3 of the financial statements filed on www.sedar.com or the
Company`s website for a detailed discussion of these risks.
(c) Inventories (Section 3031)
This standard requires that inventories be measured at the lower of cost
and net realizable value, and includes guidance on the determination of
cost, including allocation of overheads and other costs. The standard also
requires that similar inventories within a consolidated group be measured
using the same method. It also requires the reversal of previous write-
downs to net realizable value when there is a subsequent increase in the
value of inventories.
The adoption of the Section had no impact on the Company`s statement of
operations. Inventories are valued consistent with prior years at the lower
of cost or net realizable value throughout the consolidated group.
(d) Going Concern - Amendments to Section 1400
CICA 1400, General Standards of Financial Statements Presentation, was
amended to include requirements to assess and disclose an entity`s ability
to continue as a going concern. The new requirements are effective for
interim and annual financial statements relating to fiscal years beginning
on or after January 1, 2008.
At March 31, 2008, the Company had working capital of approximately $53.4
million, which is sufficient to fund its exploration programs, operating
costs and working capital for the next twelve months. The Company will
need to raise additional funds to complete its Hollister and Burnstone
developments, that being through debt financing or further capital raising.
While the Company has been successful in raising its required funding from
outside sources in the past, it cannot be certain that any such funding
would be available in the future, or that funds would be available on terms
acceptable to management.
Management assessed the Company`s net asset value, forecasted cash flow
resources and future commitments and is confident that the Company will
continue as a going concern.
4. SEGMENT DISCLOSURE
The Company operates in a single reportable operating segment, the
exploration and development of mineral properties. Geographic information
is as follows:
Assets March 31 March31
2008 2007
Canada
Assets other than mineral property
interests 41,091,004 56,796,521
Mineral property interests 1 1
United States
Assets other than mineral property 16,620,841 5,890,010
interests 95,227,039 95,156,279
Mineral property interests
South Africa
Assets other than mineral property
interests 36,574,002 48,212,597
Mineral property interests 123,257,650 123,257,650
329,313,058
Total assets 312,770,537
5. SUBSEQUENT EVENTS
Subsequent to March 31, 2008,
Rusaf Gold Ltd acquisition
The Company announced on April 7, 2008 that the agreement it entered into on
February 14, 2008 to acquire the remaining 63% of the fully diluted equity
shares of Rusaf Gold Limited ("Rusaf"), for a total consideration of $14.4
million payable in approximately 4.9 million Great Basin Gold common shares, has
been successfully closed. The exchange ratio for the acquisition was one Great
Basin Gold share for every 4.5 Rusaf shares.
The acquisition terms also provide for additional Great Basin Gold shares to be
issued in the first three years from closing, contingent upon gold discoveries
above a threshold of 500,000 ounces in size on certain mineral prospects
formerly held by Rusaf. In the event of such discoveries, the Company will
issue shares valued at the higher of current or then-prevailing market price to
the former Rusaf shareholders on the basis of valuing these gold ounces at
US$15/oz for inferred resources and US$40/oz for measured and indicated
resources (subject to a minimum average cut-off grade of 1.5 grams per tonne or
0.04 oz per ton).
The Company has also agreed to spend a minimum of $7 million and up to a maximum
of $19 million to explore the newly acquired properties during this period,
depending on independent advice as to the likelihood of exploration success.
Stock options granted
The Company granted 1,603,500 and 2,145,000 options on April 10, 2008 with an
exercise price of $3.60 per common share and expiry dates of April 10, 2013 and
April 10, 2011 respectively.
The full set of financial statements and Management Discussion are available on
Great Basin`s website: www.greatbasingold.com
Approved by the Board of Directors
Ferdi Dippenaar Ronald W Thiessen
Director Director
Ground Floor, 138 West Street 1500 Royal Centre, 1055 West
Sandown, Johannesburg Georgia Street,
South Africa Vancouver, BC Canada V6E 4N7
Tel 011 301 1800 Toll Free 1 800 667?2114
Fax 011 301 1840
www.grtbasin.com
13 May 2008
Johannesburg
Sponsor
Nedbank Capital
Date: 13/05/2008 08:00:01 Produced by the JSE SENS Department.
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