| Mon 8 Dec 2008, 15:30 | | GBG - Great Basin Gold Limited - Great Basin Gold acquires mill updates |
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GBG
GBG
GBG - Great Basin Gold Limited - Great Basin Gold acquires mill, updates
operations and finances
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 ACQUIRES MILL, UPDATES OPERATIONS AND FINANCES
December 8, 2008, Vancouver, BC - Great Basin Gold Ltd. ("Great Basin Gold"
or the "Company") (TSX: GBG; AMEX: GBN; JSE: GBG) announces that it has
signed an agreement with Metallic Ventures Gold Inc (TSX:MVG), whereby the
Company will purchase the Esmeralda processing plant ("Mill") in Nevada,
inclusive of the Esmeralda mine and infrastructure for US$2 million.
The Company`s decision to purchase the Esmeralda Mill follows an extensive
evaluation process whereby various milling options for its Hollister project
were considered. Esmeralda is approximately 290 miles from the Hollister
project with 80% of that distance over paved interstate roads. Transport
costs from Hollister are estimated at US$55 per ton.
The Esmeralda Mill was operational until 2004 when it was placed on care and
maintenance. The Mill processes ore through a carbon-in-leach (CIL) process
with tailing deposition into an adjacent impoundment. Other features of the
mine include crushing facilities, stockpile areas, waste rock facilities,
roads and other miscellaneous areas. MVG holds the required permits that allow
for the operation of the mining, milling and associated crushing activities.
The Mill can currently process up to 350 tons per day. Re-commissioning and
reconfiguring of the mill is expected to take at least 120 days. Further
upgrades to improve the recovery of gold and expand the capacity of the mill
will be evaluated and implemented during this phase at an estimated cost of
approximately US$8 million. Operating costs of the Mill are estimated to be
US$40 per ton.
One of the principal conditions to the transaction is the transfer of all
permits required to operate the Mill and associated facilities. The facility
has a reclamation liability of approximately US$2 million which requires a
bond of that amount be put in place by the Company.
Great Basin Gold has undertaken an initial assessment of previous mining
activities on the property, including the quantum and quality of available
drilling, geological and mining related data. The Esmeralda property has
mineral resources, and these resources will be the subject of a detailed
review and estimate that is NI43-101 compliant. Preliminary observations
and analysis of data from the underground workings suggest that a high grade
epithermal vein - type target, not dissimilar to the Hollister, is present.
At Hollister, good progress is being made with the underground development.
Trial stoping continues to prove valuable in allowing for a better
understanding of the vein structures and mineralization, and the future mining
conditions. At this stage, it appears that the strike length of the whole vein
system will probably be extended; giving some confidence that, with more work,
close to the existing production quantum of ounces used in the feasibility will
ultimately be mined. Initial results of the trial mining have indicated that
the current mineral reserve, which does not take into account these potential
vein extensions, will be reduced, as some of the veins cannot be mined
economically. With early trial stoping results and additional infill diamond
drilling that has been completed, the project`s resource model is being updated
for release in the first quarter of 2009.
A number of stoping methods are being tested. One of the trial stoping methods
currently being assessed is a thermal fragmentation process that allows cleaner
mining of very narrow veins with the result that some veins that are currently
deemed uneconomic may become economic.
-2-
Exploration at the Hatter Graben discovery, 1 mile to the east, has delivered
good results to date and is exhibiting similar high grade mineralization and
structure to the Hollister Block; however it is too early for resource
estimates.
The Bureau of Land Management has also informed the Company that staff has
reviewed the Company`s environmental submissions on the Hollister Block
Project Plan of Operations for full scale mining and require further analysis
by way of an Environmental Impact Statement (EIS). Meetings to facilitate the
EIS process have been initiated.
President and CEO Ferdi Dippenaar said: "After careful consideration and
independent assessment of the Esmeralda Mill and mine, we are sure that
this acquisition represents a strategic advantage for Hollister and will
provide the Company with control over our processing capacity as well as
reduced cash costs. At a total of US$95 per ton, the milling costs will be
significantly lower than the 20% revenue royalty, which is based on the gold
price, currently paid for toll milling operations. Confidence in Hollister
as a result of the trial stoping, underground exploration and area surface
exploration underscores the value of the Esmeralda acquisition. In addition,
the Esmeralda property itself has the potential for future exploration and
mining activities. The Company is in advanced negotiations towards securing
a senior secured note debt financing with warrant coverage to conclude the
Esmeralda acquisition and contribute to the equity funding requirements of
its Burnstone project in South Africa."
Johan Oelofse, PrEng, FSAIMM, Chief Operating Officer for the Company and
a qualified person, has reviewed this news release on behalf of Great Basin
Gold.
For additional details on Great Basin Gold Ltd. 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 9332
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.
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, continuity of mineralization, uncertainties
related to the ability to obtain necessary permits, licenses and title and
delays due to third party opposition, geopolitical uncertainty, changes in
government policies regarding mining and natural resource exploration and
exploitation, 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.
Date: 08/12/2008 15:30:01 Produced by the JSE SENS Department.
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