| Wed 12 Nov 2008, 15:01 | | GBG - Great Basin Reports Progress In Quarter Ending September 30 2008 |
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GBG
GBG
GBG - Great Basin Reports Progress In Quarter Ending September 30 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")
GREAT BASIN REPORTS PROGRESS IN QUARTER ENDING SEPTEMBER 30 2008
November 12, 2008, Vancouver, BC - Great Basin Gold Ltd, ("Great Basin" or
the "Company"), (TSX: GBG; AMEX: GBN; JSE: GBG) announces results for the
quarter ending September 30, 2008. Two of the highlights subsequent to the
quarter were the granting of the New Order Mining Right for its Burnstone
Project in South Africa and the positive feedback on the third milling
campaign completed at Newmont`s Midas Mine for the Company`s Hollister
Project in the United States.
The Company incurred a loss of CDN 15 cents compared to the CDN 16 cents
loss for the June 2008 quarter. No revenue was recognized during the quarter
as the batch processing of ore material at Newmont`s Midas Mill was still
underway. Pre-development expenses for both projects decreased from CDN$32.5
million to CDN$28.5 million quarter on quarter.
On October 29, 2008, the Company announced that the Department of Minerals
and Energy had granted Southgold Exploration, the Company`s wholly owned
subsidiary, a New Order Mining Right. This now allows the Company to mine
for gold, silver and aggregate in the Burnstone Project area. Burnstone
development costs will now be capitalized as from November 2008.
Good progress was also made with the development of surface and underground
infrastructure at the Burnstone Project. At November 10, 2008, 2,019 meters
of decline development had been completed, with 181 meters of further
development remaining in the cross-cut to reef. The Company remains on
target to access the bulk mining area in early 2009.
Sinking of the vertical shaft at Burnstone commenced during April 2008, and
at November 10, 2008, the shaft had reached a depth of 165 meters below
surface. Twenty meters of the 80 meters of development required for the
construction of a clear water dam level have been completed and additional
activities are now focused on constructing the permanent headgear as well as
the installation of the main sinking winder. On completion, a faster rate of
shaft sinking will be achieved. The final depth of the shaft is planned at
501 meters.
Although project funding to a total amount of CDN$122 million has been
recommended by the respective credit committees of Investec Bank Ltd and
Nedbank Capital, a division of Nedbank Ltd, final approval is outstanding
and is expected in the next few days. Of the total project funding, an
amount of CDN$17 million will be available as standby-debt for potential
cost overruns. To date, CDN$26 million of the current facility with Investec
Bank Ltd has been drawn down. The total cost of the debt is approximately
16%. In terms of the facility agreement, the Company is obliged to
contribute another CDN$35 million to the project before the next draw down.
Good progress was also reported from the Hollister Property in Nevada, USA.
Trial stoping continued on the Gweneviere and Clementine veins with a total
of 9,873 tons being extracted during the quarter. A total of 11,239 tons at
a head grade of 1.5 oz/t of gold and 12.0 oz/t of silver were milled from
which a net of 15,418 gold equivalent ounces were recovered1. Recoveries of
88% and 93% were reported for gold and silver, respectively. Approximately
US$10 million of revenue is expected to be realized from this campaign in
the December quarter. Year to date, an estimated total of 46,910 equivalent
ounces have been extracted at Hollister.
A total of 17,225 tons at an estimated head grade of 1.4 oz/t of gold and 10
oz/t of silver have been stockpiled.
Underground cash costs totaled US$360/oz during the quarter, which is a 17%
decrease from the June quarter. The operation will benefit from economies of
scale as the tonnage build-up continues. Metallurgical processing costs
incurred on the ore treated subsequent to the quarter end are based on a 20%
of actual metal recovery and equates to US$175/oz, inclusive of $10 in
transportation costs. The Company is currently reviewing alternative
facilities to treat its ore and plans to have an improved arrangement in
place by December 2008.
To allow for flexibility, underground waste development is ahead of schedule
with 10,379 feet being completed compared to the plan of 5,394 feet. This
has resulted in an acceleration of pre-development expenses.
Positive surface exploration results continued with follow up drilling in
the newly discovered vein system in the Hatter Graben area of the Hollister
Property. Although assays are pending, confirmation drilling continues to
indicate the existence of an interesting and prospective deposit. Although
the Company plans to cut back on all exploration expenditures, it is
anticipated that exploration in this exciting area will continue.
President and CEO Ferdi Dippenaar commented; "Although we have made good
progress in all areas of our business, recent events in the capital market
have focused us on preserving our cash resources and allocating expenditures
in areas that will ensure that we meet production targets. We will continue
with limited surface exploration, mainly on the Hollister Property in Nevada
while the weather allows it. In the other regions, we have cut back on
expenditures until the cash position of the Company improves. At Burnstone,
we are probably two months away from intersecting the reef in the decline,
and mining will commence soon after. We are in the fortunate position, as we
could see revenue from both operations within the next 6 months."
Johan Oelofse, Pr.Eng., FSAIMM, Chief Operating Officer of Great Basin and a
qualified person has reviewed this release on behalf of the Company.
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) 11 301 1800
Michael Curlook in North America 1 (888) 633 9113
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 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.
_______________________________
1 Gold equivalent is calculated at metal prices of US$828.96/oz for gold and
US$12.22/oz for silver.
Date: 12/11/2008 15:01:01 Produced by the JSE SENS Department.
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