| Thu 14 May 2009, 12:01 | | GBG - Great Basin - Great Basin Reports Progress In Quarter Ending March 31 |
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GBG
GBG
GBG - Great Basin - Great Basin Reports Progress In Quarter Ending March 31,
2009
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 MARCH 31, 2009
May 14, 2009, Vancouver, BC - Great Basin Gold Ltd, ("Great Basin" or the
"Company"), (TSX: GBG; NYSE Amex: GBG; JSE: GBG) announces results for the
quarter ended March 31, 2009. Two of the highlights for the quarter were the
good progress made with trial mining activities at Hollister in Nevada, USA and
the development of two access points to the gold-bearing reef at the Burnstone
Project in South Africa.
The company incurred a loss of CDN 4 cents per share compared to the CDN 1 cent
for the December 2008 quarter. The loss per share for the December quarter was
influenced by a Future Income Tax credit of CDN 10 cents per share. In the
quarter ending March 31, 2009, revenue of CDN$11.8 million (Dec 08 - CDN$16.9
million), net of milling costs of CDN$3.6 million (Dec 08 - CDN$3.2 million),
was realized from the sale of 18,189 gold equivalent ("Au eqv") ounces (Dec 08 -
29,726 Au eqv ounces) from trial mining at Hollister. Cash costs, excluding
milling costs, were CDN$398 or US$320 per ounce. A total of 17,102 tons of ore
containing 23,441 Au eqv ounces was extracted during the quarter.
Hollister had a stockpile of 23,375 tons containing an estimated 23,525 Au eqv
ounces as at March 31, 2009. This material was shipped to Newmont`s Midas Mill
during early April and early May, following an agreement entered into in March
2009.
Subsequent to quarter end, the Company entered into a toll milling agreement
with Yukon Nevada Gold Corp., which will allow for the treatment of Hollister
ore at its recently re-opened Jerritt Canyon milling facility at a fixed charge
of US$88 per ton. Recovery factors of gold and silver have been set at 88%.
5,017 tons of low grade material, stockpiled at Jerritt Canyon since 2008, has
subsequently been milled. The agreement is a significant improvement on the
current milling arrangements.
Total pre-development expenses for the Hollister and Burnstone Projects
decreased from CDN$16 million to CDN$5.6 million quarter on quarter; these
expenses were mainly incurred at Hollister. To date, CDN$62 million has been
expensed for Hollister through the income statement and this will continue until
the Amended Plan of Operations has been approved by the Bureau of Land
Management (BLM) in Nevada. The Environmental Impact Study for Hollister was
initiated during the quarter.
A New Order Mining Right was granted on October 29, 2008 by the Department of
Minerals and Energy in South Africa for the Company`s Burnstone Project area.
This has permitted a change in accounting for pre-development costs and,
accordingly, pre-development costs of CDN$5.8 million (Dec 08 - CDN$7.0 million)
were capitalized.
Good progress continues to be made with the development of surface and
underground infrastructure at the Burnstone Project. To May 4, 2009, 2,247
meters of decline development had been completed at Burnstone. The access
decline continued beyond the reef elevation, with approximately 933 meters to
vertical shaft position. The cross-cut to Block B3 has reached the Kimberley
Reef elevation, and development to establish working places has been initiated.
A total of 66 meters of development remains to access Block C before stope
establishment for mining commences. As planned, considerable other underground
development is also underway to prepare for build-up of production.
Sinking of the vertical shaft at Burnstone has continued and, at May 4, 2009,
the shaft had reached a depth of 233 meters below surface. The final depth of
the shaft is planned at 501 meters. Construction of the waste rock deposit
facility was completed two weeks ahead of plan. The refurbishment of the mills
continues to be on schedule and the tender to commence with the civil
excavations for the Metallurgical facility was granted in early May.
At Hollister, underground waste development continued with 2,213 ft (674 m)
being completed during the quarter and a total of 24,345 ft (7,420 m) completed
to date. Underground evaluation and exploration drilling for other mineralized
structures totaled 13,503 ft (4,092 m). Surface drilling totaled 1,449 ft (439
m). The exploration programs continue to encounter high grade intersections on
the Clementine and Gwenivere vein systems, disseminated mineralization in the
overlying Tertiary volcanic rocks (Blanket Zone) as well as further encouraging
intersections from the Hatter Graben veins. A notable intercept in the Blanket
Zone from HDB 69 completed in April was 0.73 oz/t over a 32.4 ft width. More
follow up drilling is planned to understand the extent of this mineralization
which can be accessed from the current underground infrastructure.
The refurbishment of the Esmeralda Mill is on track for commissioning in July
2009. An initial assessment of previous mining activities on the property,
including the quantity and quality of available drilling, geological and mining
related data has been initiated. This desk-top due diligence is providing a
basis for prioritizing future exploration targets, as well as understanding the
potential for outlining sustainable underground mineral resources. Preliminary
observations and analysis of drill hole evaluation data from the previous open
pit mining and underground development indicates a structurally controlled
epithermal vein system, similar to the mineralization at Hollister. Plans to
dewater the Prospect Decline are underway which will allow for an underground
access and evaluation of possible future mining.
President and CEO Ferdi Dippenaar commented, "The Company had an improved
quarter with excellent progress being made in various areas of the business.
Activities at Burnstone are expected to gain momentum as mining and associated
infrastructure is established. Our production target date of June 2010 remains
intact. Our Hollister Project continues to generate excitement from ongoing
exploration. An application has been submitted to commence with an exploration
drive towards the Hatter Graben area, which will allow for more cost effective
and focused exploration. The recovery of gold ounces from trial mining at
Hollister allows for the funding of the necessary surface and underground
infrastructure. This is an ideal situation to be in. The Esmeralda Mine could
add an interesting dimension to Great Basin, but this project is still in its
early stages."
Johan Oelofse, Pr.Eng., FSAIMM, Chief Operating Officer and Phil Bentley,
Pr.Sci.Nat., Vice President Geology and Exploration for Great Basin are
qualified persons and have reviewed this release on behalf of the Company.
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) 11 301 1800
Michael Curlook in North America 1 (888) 633 9223
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.
Date: 14/05/2009 12:01:01 Produced by the JSE SENS Department.
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